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Cost cutting to exacerbate succession planning issues in 2019, according to Core-Asset Consulting

The continuing drive for greater cost control across financial and professional services in Scotland this year will have a retrograde impact on succession planning, according to analysis published today by Core-Asset Consulting. 

In its Salary Guide 2019, Core-Asset’s annual benchmarking tool for employers and professionals in Scotland, the recruiter argues that cost control will continue to exert a strong influence in 2019, negatively impacting on companies’ ability to succession plan effectively.

Betsy Williamson, managing director of Core-Asset Consulting, said, “Last year we predicted that cost-cutting rather than Brexit would be the dominant theme in 2018. This proved to be true.

“This trend is set to continue in 2019 and its protracted nature will have a somewhat retrograde impact on succession planning across Scotland’s financial and professional services.

“Broad programmes of cost cutting have tended to focus on layers of middle management, particularly within large organisations. However this is where organisations often find tomorrow’s leaders. 

“Employers therefore need to resist the temptation to put an indiscriminate red line through middle management.

“There is anecdotal evidence of firms thinning organisational structures based on crude methodology – for example, any managers responsible for teams of five or less. This approach can unwittingly weaken the leadership prospects of any company. 

“The issue of succession planning is perhaps best illustrated by Scotland’s boutique-based asset management industry.

“The leadership of this sector is dominated by an industry standard demographic with little diversity. It is populated with mature individuals who are founding partners and leaders in their early to mid-50s, and where succession planning issues are already prevalent. 

“The recruitment freeze which followed the financial crisis has already helped create the current talent shortages across Scotland’s financial and professional services – a reduction in 2008-2012 graduate programmes being just one example.

“Scottish companies would do well to avoid storing up future staffing problems by overzealous middle management redundancy programmes.”

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