Photo: Supplied/ Kenny Eliason
More than half of businesses lack a formal leadership succession plan, exposing them to operational and financial losses, a new report says.
The Success in Succession report by recruitment consultancy Robert Walters indicates the lack of transition planning could cost New Zealand businesses up to $3.5 trillion in wealth over the next two decades.
This is based on the estimated value of family-owned enterprises at risk due to poor succession planning.
"Succession planning isn't just about filling roles," Robert Walters executive search partner Neil Munro said, adding it was about mapping future skills, investing in leadership development and aligning succession plans with strategic business goals.
The costs included operational disruptions, employee turnover and loss of institutional knowledge.
According to the report, 97 percent of organisations struggled to find suitable candidates for senior roles, and more than a quarter (27 percent) cited insufficient training and support for internal successors.
The urgency for effective succession planning is underscored by an ageing workforce and a highly competitive talent market.
Without proactive leadership development, businesses risk not only financial losses but also diminished stakeholder confidence and strategic stagnation.
Six Steps to Effective Succession Planning
Robert Walters' Success in Succession guide outlines a six-step approach for organisations to identify, develop, and retain emerging leaders, ensuring business continuity and resilience.
- Establish key positions and objectives - Define critical roles and align them with the organisation's long-term strategy to ensure leadership continuity and business growth.
- Select high-potential employees - Identify future leaders early through performance insights and inclusive talent reviews that recognise diverse potential.
- Evaluate readiness to advance - Assess leadership capabilities objectively using structured evaluations to ensure candidates are prepared for progression.
- Plan individual development and retention - Build targeted action plans, mentorships, and training programs to nurture future leaders and strengthen loyalty.
- Address gaps in succession coverage - Identify roles without successors and plan for external recruitment or cross-functional solutions to mitigate risk.
- Review and communicate regularly - Keep the plan dynamic by revisiting it frequently and promoting transparent communication across the business.
