SuccessFactors

Closing the experience gap:

How succession management and employee
development can prepare your workforce
for the future

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CLOSING THE EXPERIENCE GAP: HOW SUCCESSION MANAGEMENT AND EMPLOYEE DEVELOPMENT CAN PREPARE YOUR WORKFORCE FOR THE FUTURE

Closing the experience gap:

How succession management
and employee development
can prepare your workforce
for the future
Jack cant do it anymore. After 40 years of working on oil rigs around
the world from the North Sea to the Middle East to South America
Jacks retiring for good this time. Every other time hes tried to retire
permanently, he stayed on because the money the company offered
was too good to turn down. After all, 12 months on a drilling operation
in some far-off corner of the world would go a long way toward putting
his granddaughter through college. But now he cant ignore the
passage of time.
For lots of companies, stories like Jacks are all too familiar. Many industries including oil & gas,
utilities, engineering, and manufacturing face serious experience and skills gaps that could
jeopardize their ability to deliver their products and services. For years, many companies have
overpaid to keep experienced workers with critical skills and essential knowledge from retiring
permanently. However, this strategy isnt a solution; its a stopgap approach. Now, theres a race
against time for organizations to prepare the next generation of skilled workers.
As an HR or development professional in this situation, you face a significant challenge. How do you
accelerate five years of development for a new employee to offset the loss of 40 years of experience
from an outgoing employee? You cant close the experience gap through training, planning, or
recruiting alone. All of these functions need to be brought to bear in concert with a succession
strategy to solve your larger business problems and close experience gaps. This paper will explain
how the experience gaps occurred, how to put plans in place to close experience gaps, and how to
put your plans into action.

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CLOSING THE EXPERIENCE GAP: HOW SUCCESSION MANAGEMENT AND EMPLOYEE DEVELOPMENT CAN PREPARE YOUR WORKFORCE FOR THE FUTURE

How did experience gaps occur?

If you want to get the attention of executives, dont talk about the number of people retiring
each year, talk about the years of experience walking out the door. Were losing 50 people
may not sound too bad. Were losing 1,500 years of experience conveys a different and more
urgent message.
Todays shortages were years in the making. Organizations that find themselves facing significant
experience gaps today made business decisions that had unforeseen consequences. Some of
these decisions were driven by necessity or even innovation. However, the result is that the people
who would have developed the experience to fill these roles were either never hired or not retained.
Some of the drivers of todays experience gaps include:
Process efficiency. Over the past two decades, many entry-level and early career jobs were
eliminated, which removed the talent pool necessary to groom replacements for many key
roles. Although the cost savings from these moves delivered business value at the time, some
of those positions that werent filled yesterday would have been todays experienced midcareer professionals.
Demographics. In much of the world, the generation thats now in its 30s and 40s is much
smaller than the postwar generation that preceded it. Although theres a large supply of
workers currently in their 20s, it will take time and development before this group is ready to
close the experience gaps in the workforce.

It takes several
years to complete
the apprenticeship
programs or otherwise
become fully productive and obtain the
necessary certifications
required to climb highvoltage electricity
towers or repair
power lines.
Bob Myers, SVP and CHRO for Black Hills Energy.

Economic conditions. Past downturns that forced painful yet necessary layoffs or hiring
freezes have come back to haunt some industries. In the oil & gas industry, the economic
downturns in the late 1980s and early 1990s resulted in a lost generation of talent. The
workers who werent hired or developed then would have become todays experienced
technical talent. Even though the industry has worked to address this challenge for more than
a decade, getting petroleum engineers and geologists on the job is only part of the solution.
Getting them the appropriate experience is necessary to close the gaps completely.
The physical nature of work. In many industries, the work requires more than knowledge
and experience; it also requires hard physical labor. Experienced workers even if theyre
willing are sometimes unable to meet the physical demands of these jobs. Being able to
close the experience gap before physical ability becomes an issue with more experienced
workers is critical.
One company that found itself facing experience gaps in its workforce is Black Hills Energy, a utility
provider based in the American Midwest. It found that 26 percent of workers were eligible to retire
within the next seven years. These workers represented 10,768 years of work experience a
majority of them in technical roles, such as electricians and machine operators. Many of Black Hills
jobs require specialized technical skills sets, including some that would take years to develop. 1
These problems didnt occur overnight, so organizations can expect the solutions to take time as
well. To successfully close these gaps, its important to begin work immediately and make every
moment count. Its also essential to give managers and employees the proper tools to put
development plans into action quickly.

Winning HR Strategies: A SuccessFactors E-book. 2012. https://www.successfactors.com/en_us/lp/successfactors-ebook.html

Putting plans in place to close the experience gaps

As an HR or development professional, you must create the processes and infrastructure that
business leaders and line managers will use to close the experience gaps. Also, its easier to put
development plans into action with the right tools.
Succession planning is a tedious, time-consuming exercise of pulling org charts and performance
records and corroborating that all with manager and executive feedback. Technology helps the
process become quicker, easier, and more flexible.
With the right software, your managers can:
Identify experience gaps easily. Even if your organization has visibility into future gaps from
workforce planning, your managers need the ability to identify the experience gaps early so you
can take the necessary steps to close them before the company is at risk. Its not only to
monitor bench strength, but also to build it and ensure that you have adequate bench strength
for your specific needs. They can also model what if scenarios.
Find the talent you need. Many employees have language skills, technical proficiencies, or
other abilities that would be beneficial to your organization if you need to staff a foreign location
or pull an ad hoc project team together. You can make it easier for managers to find this
information with searchable talent profiles that employees maintain, including information about
experience, expertise, performance, and career aspirations. Profiles are also part of engaging
employees and giving them a voice in the process.
Promote the right talent. If an employee in a critical role suddenly decides to retire or leave
the organization, its important to fill the position quickly. With competency-based search
capabilities and side-by-side comparisons of top candidates, its easier for managers to find
and select the right talent.
Model any domino effects. Are there any unintended or unexpected consequences of
putting a succession plan into place? A succession lineage chart can show managers the
impact of initiating a plan to ensure that nothing will go awry when the plan is put into action.
Create development plans. Development plans can ensure that designated successors and
high-potential employees will be ready when theyre needed. With the right tools, its easy for
managers to identify an employees competency gaps and build actionable development plans
to close them. However, an employee must also understand why theyre being groomed for a
role if theyre going to get the most out of development. The employee must not only
understand how the business benefits, but also what they get out of the process and how it
advances their own career goals in a personally and professionally rewarding way.

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CLOSING THE EXPERIENCE GAP: HOW SUCCESSION MANAGEMENT AND EMPLOYEE DEVELOPMENT CAN PREPARE YOUR WORKFORCE FOR THE FUTURE

Taking action to prepare your workforce for the future

Accelerating career development requires your organization to work fast and smart. The answer
isnt a silver bullet found in any one solution. Instead, the answer is found in the integration of
succession with other talent processes. Many industries with an urgent need to develop roles that
require highly specialized knowledge including the utility industry, oil & gas, engineering, and
manufacturing organizations are using a mix of initiatives to close experience gaps. To do more
with less time, incorporate these ideas into your process.

Focus on critical roles

As an HR professional, you know you cant address every job and every employee at one time.
You must focus business leaders and line managers on addressing the gaps that present the
most immediate business risk. In the case of Black Hills Energy, the company was able to identify
which positions needed attention first and possibly needed more workers, as well as the jobs that
didnt need to be back-filled. Because Black Hills was able to focus on the most important
positions first, tomorrows technical talent is already on the job today. The knowledge transfer
from experienced workers to new ones is under way, and the company is prepared to navigate
the transition successfully.

Show employees whats in it for them

When you act on talent gaps with succession, you must think beyond just the organizations
needs. What do employees get out of the succession process? Even though its important to
match the needs of the company to specific job roles, keep the career aspirations of your people
in mind to maximize employee satisfaction and engagement with the program. With their
understanding of the businesss needs, HR must create programs and opportunities for
employees to cross business, functional, and geographic lines. HR must make it clear to
employees what opportunities exist, how they can gain experience, and what support is available.
If employees believe that new positions that offer opportunities for the development of new skills
exist, they are more apt to stay engaged with succession and development efforts and stick with
the organization. They will see that they can develop new skills and have opportunities that offer a
much more flexible avenue toward career growth. 2

Can you really force experience?

Closing experience gaps means transferring knowledge from experienced workers to
their replacements. At Black Hills, preparing for the impending retirement of more than
10,000 years of employee experience means compressing a lot of training into a short
period of time. If a technician goes on 10 maintenance calls a day, this development
approach ensures that five are unique or non-trivial in nature so new hires have more
opportunities to learn from their mentors.

Loew, Laci. Transparent Talent Mobility: An Advanced Strategy for Succession Management. Bersin by Deloitte. 2011. To purchase the report,
visit http://www.bersin.com/practice/Detail.aspx?id=13720

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CLOSING THE EXPERIENCE GAP: HOW SUCCESSION MANAGEMENT AND EMPLOYEE DEVELOPMENT CAN PREPARE YOUR WORKFORCE FOR THE FUTURE

Accelerate development with job rotation

Todays high-potential employee is tomorrows high-performing leader. To prepare an employee to
move up the ranks in the company, it helps to move them around the company and prevent
voluntary turnover. A successor can better understand an organization if they have the opportunity
to serve in different roles and in different locations. Destination Hotels, a 9,000-employee hotel
management company with 37 locations across the U.S., frequently moves up-and-coming
management and hospitality talent among its locations to advance their capabilities. Clear
succession management makes a potentially unnerving experience easier. Employees feel better
knowing that someone somewhere in the company knows about them and their skills, background,
experience, and career aspirations. Employees are more engaged as a result, and the program has
been so successful that voluntary turnover has decreased 8 percent.

Blend formal and informal learning

Connecting formal and informal learning and development to succession will go a long way toward
determining the success or failure of the program. After all, its difficult to prepare people to move up
if you have no way to help them address skills gaps and acquire new competencies. Identifying
skills gaps and building actionable development plans allows you to balance the needs of the
company with individual career goals.
At Vallourec, a provider of tube solutions such as pipelines, measurement of skills proficiency and
competency levels is built into the performance appraisal process. As development needs are
identified, related training can be assigned to support the employees career goals. Because
informal learning on the job is also a significant opportunity, dont forget that social collaboration
tools, such as SAP Jam, also play a part. Employees can use these tools to learn informally from
mentors or each other.

Develop both managers and employees

Obviously, learning and development supports putting development plans into action both
formally in the classroom or with e-learning, and informally through mentoring and collaboration.
You can put employees in the best position to succeed with manager feedback that instructs and
engages. However, not all managers are natural coaches. To put everyone in a position to succeed,
dont limit training and support to employees alone. Managers are the linchpin in the employee
development process and need to know how to best support their employees.

Facilitate talent mobility

In many industries, maximizing your workforce means moving them around quickly
and strategically. For Vallourec, talent mobility allowed them to move talent from
Africa, the Middle East, and the North Sea to build a pipe-manufacturing facility in the
Amazon jungle.
The team required experienced managers and engineers, and needed to come
together on a short timeline. Vallourecs highly interdependent HR processes allowed
it to quickly gather and assess data about skills proficiency, career development, and
talent mobility. Within two hours, it had a list of 50 employees in five countries across
three disciplines, and had 10 people ready to deploy in short order.

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CLOSING THE EXPERIENCE GAP: HOW SUCCESSION MANAGEMENT AND EMPLOYEE DEVELOPMENT CAN PREPARE YOUR WORKFORCE FOR THE FUTURE

Conclusion
If left alone, it may take a tree 20 years to reach full height. Often, its growth can be accelerated
through effective use of fertilizer, watering, and focused trimming. The same thing is true for
employee skills. We cant give people 20 years of tenure in five years, but through integrated use of
workforce planning, succession, staffing, learning, and development, we may give them a level of
knowledge, experience, and skills in five years that historically took 20 years to acquire.
Preparing for the future requires getting started right away, and SuccessFactors has the tools and
the expertise to help you make up for lost time and close the experience gaps in your enterprise.

SuccessFactors, an SAP Company

SuccessFactors is the leading provider of cloud-based HCM software, which delivers business
results through solutions that are complete, beautiful, and flexible enough to start anywhere and go
everywhere. SuccessFactors customers represent organizations of all sizes across a wide range of
industries. With more than 20 million subscribers globally, we strive to delight our customers by
delivering innovative solutions, content and analytics, process expertise, and best practices insights
from across our broad and diverse customer base. SuccessFactors solutions are supported by a
global partner ecosystem and the experience and commitment of SAP.

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v. 03 2014