SINGAPORE companies should be more forward-looking and transparent about succession planning, as this will help them retain and attract talent amid the labour crunch, human resource (HR) experts said.
As a result, high-flying executives may end up departing their companies in search of leadership roles in other firms, leaving their former companies scrambling to find suitable replacement leaders.
Dr Gary Schmidt, practice leader for talent management at workforce consultancy Right Management, told The Straits Times that companies in Asia, including Singapore, are growing and facing a scarcity of leadership talent.
As many companies prefer to groom leaders internally, they should "engage staff with high potential so that they stay", he said.
So far, companies have not had much success doing so. In a recent Right Management report, only 11 per cent of human capital professionals in Asia surveyed said their companies "have been very successful in identifying and accelerating leadership talent", and 15 per cent have been unsuccessful at doing so. The rest are only "somewhat successful".
Organisations such as the Science Centre Singapore face similar challenges. Its chief executive, Mr Lim Tit Meng, who is also an assistant professor at the National University of Singapore, noted that succession planning is particularly difficult for top roles such as chief executive and chief financial officer.
This is "especially when the company wants to see bold changes that come with these leadership roles", he said.
Mr Paul Endacott, South-east Asia managing director for recruitment firm Ambition, said that companies must make succession planning a clear focus.
Organisations are often too focused on short- and medium-term goals, leaving little time to look at the long-term talent pipeline, Mr Endacott noted.
A recent Standard Chartered Private Bank report found that wealthy business owners are more concerned about expanding their companies than undertaking succession planning.
While this is common to companies in all sectors, HR experts such as Achieve Group chief executive Joshua Yim noted that bigger companies usually have more structured HR policies in place, including succession plans.
"Small and medium enterprises tend to be in 'survival mode'," he said, referring to their everyday concerns about growing their revenue and managing costs.
But this comes at the expense of attracting talent. "If the next generation sees that the company is not so structured, they may not want to join it," Mr Yim added.
Providing existing employees with a clear and carefully considered long-term career path is also one of the best ways to retain them, said Mr Endacott.
Echoing this sentiment, Dr Schmidt said: "Even though they may not ultimately get the job or promotion, the fact that they see there's an opportunity to compete... motivates them."
He also urges more transparency and discussion in identifying the next generation of leaders.
While guarantees cannot be made, companies should tell high-potential employees they have a bright future. If not, they may decide to leave and it will be too late to persuade them to stay.