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Succession planning issue

Cost-cutting puts squeeze on leaders of the future

Betsy Williamson

Betsy Williamson: ‘resist indiscriminate red lines’


An ongoing drive on controlling costs across financial and professional services firms is threatening to weaken their future leadership structures, according to new analysis.

Many are taking out layers of middle management, leaving them short of suitable candidates to succeed to the top roles.

Betsy Williamson, managing director of recruitment firm Core-Asset Consulting, said: “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.”

Ms Williamson said firms need to review their cost control to ensure they are not building up problems for the future. That means resisting 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,” she said.

“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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