Succession Planning Among Commercial Banks in Kenya

Abstract

Succession planning is a crucial activity for any organization that aspires to withstand the test of time. Employees are the most important asset for any organizations thus the need to retain them. However it is inevitable to stop an employee from exiting the organization hence the need to find a suitable successor that will fill the vacancy when it opens up. Succession planning ensures that an organization has the right people at the right time for the right jobs. The aim of this study is to determine the nature of succession planning in commercial banks in Kenya. The banking industry is a volatile industry with cut throat competition for best talents and brains so as to gain competitive advantages. This study plans to determine whether succession in commercial banks are planned in advance and prepared for or whether succession is emergent and only happens when a vacancy occurs. Furthermore, the study aimed at establishing the factors that influence succession planning in these banks. Through a descriptive survey, a questionnaire was developed and sent to all the 43 commercial banks in Kenya for their respective employees to respond. The study showed that succession planning in majority of the commercial banks in Kenya is a one off event that takes place when a CEO is about to exit the organization. Once a successor has been identified, the succession planning processes come to a stop. Lack of continuous succession planning by commercial banks in Kenya has made it impossible for majority of the banks to name a suitable successor within a year. It is therefore imperative for commercial banks in Kenya to take succession planning seriously and make it a continuous process that will ensure a pool of talent is available at any particular time for selection whenever a vacancy opens up. In terms of factors that influence succession planning, it was found that Board of directors are the most influential in CEO succession process. Government regulations were also rated highly with respondents stating age and health of the CEO as other factors that influence succession planning in their banks.