Document Detail

Title: RR325-11 - Best Practices for Project Manager Succession
Publication Date: 12/1/2016
Product Type: Research Report
Status: Reference
Pages: 128
Wiezel, Sullivan, Gunnoe, Arizona Statep; Perrenoud, Univ. of Oklahoma
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Abstract

The workforce demographics are changing as a large portion of the population is approaching retirement age and thus leaving vacancies in the construction industry. Succession planning is an aspect of talent management which aims to mitigate the instability faced by a company when a vacancy arises. Most commonly, succession plans are implemented for high impact positions in the company such as executives. Current research shows that in addition to a diminishing pool of available talent, the industry does not have widespread, empirically tested, and implemented succession models for early to mid-level employees. Although the industry might be prepared to replace its executives, there still exists a need to plan for the lower to mid-level employees.

No “one size fits all” model of succession planning exists. Researchers across all industries provide an array of potential solutions, but all solutions vary greatly depending on industry, company, and location. There is a concerted effort to identify the key traits of high performing and high potential employees, but the methods to determine these traits are largely qualitative and thus tend to be biased or difficult to translate in all situations.

Society as a whole is trending towards the use of data and information technology to better translate the needs, wants, and traits of individuals into measurable data. In order to clearly communicate and translate the various aspects of succession planning across the construction industry, there needs to be a push towards utilizing quantitative information to augment current practices as it is currently being see in big data.

RT325 aims to improve succession planning for all levels of employees across the construction industry by pioneering a flexible system of human analysis that seeks to quantify the traits and behaviors of high performer and high potentials.

Before developing a model, the research team sought to verify the high level challenges faced by the industry at a smaller scale amongst 10 CII member companies. Through one-on-one phone interviews and surveys with human resource specialists and company executives, the team verified the following information about the member companies:

  1. The majority of lower to mid-level employees are within 10 years of retirement (38 percent).
  2. Only 50 percent of the companies have a formal, written procedure for succession planning.
  3. None of the interviewed companies have succession plans in place for lower to mid-level employees.
  4. The succession planning procedures that are currently being implemented do not correlate with procedures that companies perceive to be the most important.
  5. Employee evaluations are largely qualitative and may lead to bias.

Using this information, RT325 has created two tools that utilize clearly measurable personality and behavioral information to augment company decision making in regards to succession planning and talent management.

The first of these tools is a guidelines of succession best practices as determined by interviewing CII member companies. The research team is confident that these best practices, although qualitative, provide a suite of options that can have been purported to improve successions. These practices are simple techniques that are easy to implement and understand.

The second tool is based on a statistically validated formula that can account for 48% of the factors that relate to potential to becoming a project manager. It consists of two specific questions that help expand the pool of potential successor to include candidates that might have been previously overlooked. The questions relate to candidates’ leadership experience and ability to make business decisions without emotional biases.

The formula behind these questions was developed based on 4 industry-tested personality and behavior assessment tools covering 52 traits (Myers Briggs, Emotional Intelligence, HEXACO, and DISC). The traits were included in a survey of over 110 project employees of contractor companies. In addition to the formula, the survey revealed the following key results:

  1. Performance in the current position is not a good indicator of success at the next level.
  2. Performance ratings are subjective and do not correlate with other traits or experience within the industry.
  3. Most personality traits and behaviors differ on average between CII member companies.
  4. There are a select few key traits that can help identify previously overlooked employees with a high potential to become project managers within CII member companies.

One of the major challenges that the industry faces in preparing for the talent cliff is clearly understanding an aligning individuals in a way that extends beyond personal bias. This challenge is one that cannot be surmounted easily, but instead addressed in smaller increments. The RT325 toolbox aims to better clarify succession planning and provide quantitative solutions that aim to improve succession by a two percent margin.