CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Whether public or private, the organization’s survival is based on its ability to bring on board and sustain high quality workforce over a period of time. Many organisations are currently facing mounting pressures to ensure their sustainability, flexibility, and responsiveness to the increasing uncertainty and limitations in the economic world. Ultimately, increased turbulence in the employment environment, characterized by organizational restructuring, funding uncertainties and increasing program complexities have substantial effects on the ways organisations respond to workforce replacement (Odhiambo, 2014).
At a global level, succession planning in the recent past has received more attention not only as a concern for the management of human resources, but also as institutional strategic management component for ensuring performance and growth. In a survey by Rothwell (2010), top corporate companies revealed that the main reasons for having succession planning programmes are attributed to the challenge to maintain a pool of potential successors.
The rate of employee turnover in the changing and highly competitive business environment is on the increase in most organizations in the world today (Sullivancited in Stephen et al., 2013). This phenomenon has led to changes in workforce demographics, global competition, mergers, acquisition volumes, and technology that call for the act of developing a pool of talent to take up leadership responsibilities and push the businesses to the next level. Although some managers feel that the problem of high attrition rate is insignificant because of the high rate of unemployment, it is however threatening to add another impediment to the growth and survival of many firms (Pattanayak, 2005).
In Nigeria firms that undergo shrinking or close up do so because of lack of competent managers that are able to motivate employees to stay longer (Adewale, 2011). On the contrary, employee turnover can be quite expensive. Beside recruitment and selection expenses, the cost associated with creating new employee records in the human resource department, establishing payroll records in the accounting section and the provision of safety equipment are costs incurred when employees leave hence the need to manage succession planning properly (Woods, 1997).