Risk governance & control: financial markets & institutions / Volume 7, Issue 3, Summer 2017

SUCCESSION PLANNING AND STAFF RETENTION

CHALLENGES:
AN INDUSTRIAL OUTLOOK AND MAJOR RISKS
Sindisiwe Bonisile Maphisa*, Bonginkosi Keith Zwane**, Celani John Nyide***
* UCL Company (Pty) Ltd, South Africa
** Department of Accounting, Mangosuthu University of Technology, South Africa
*** Department of Finance and Information Management, Durban University of Technology, South Africa

Abstract
How to cite this paper:
Maphisa, S. M., Zwane, B. K., & Nyide,
C. J. (2017). Succession planning and
The sugar manufacturing industry in the emerging economy is
staff retention challenges: An industrial potentially at high risk of not achieving its goals of increasing
outlook and major risks. Risk governance production output. This is due to higher than average age of
& control: financial markets & institutions,
growers, nonexistence of effective succession planning to expedite
7(3), 17-26. doi:10.22495/rgcv7i3p2
the transition to a new generation of growers, related increasing
How to access this paper online: departure of farmers from the industry and difficulty in attracting
http://dx.doi.org/10.22495/rgcv7i3p2 new talent to the industry due to the high cost of entry. This
Copyright © 2017 The Authors research sought to explore managements’ perceptions of
succession planning and the impact it has on retention at a Sugar
This work is licensed under the Creative Manufacturing Company. In order to achieve the research aim and
Commons Attribution-NonCommercial
objectives, a qualitative approach was utilised in the form of an
4.0 International License (CC BY-NC 4.0).
http://creativecommons.org/licenses/b exploratory case study. A single case study was also chosen
y-nc/4.0/ because this is a critical, unique and revelatory case and the
researchers had access to the case previously inaccessible to
ISSN Online: 2077-4303
ISSN Print: 2077-429X empirical research. Purposive sampling was used and total of 15
managers participated in this study. The study found that the
Received: 20.02.2017 company is not doing enough to implement succession planning
Accepted: 28.05.2017
programmes even though there are potential candidates who can
JEL Classification: G32, O21 be trained and developed into management positions.
DOI: 10.22495/rgcv7i3p2
Keywords: Emerging Economy, Staff Retention, Succession
Planning, Sugar Manufacturing Industry

1. INTRODUCTION highly capable staff members who would be able to

occupy management positions in the future (Eshiteti
In today’s world, most organisations’ staff turnover et al., 2013).
is on the increase due to the unstable and highly Even though most companies have succession
competitive business environment (Sullivan, 2008, as planning programmes in place as per their policies,
cited in Eshiteti, Okaka, Maragia, Odera and Akerele, it is not clear how effective these programmes are
2013). Mehrabani and Mohamad (2011) state that (Gulzar & Durrani, 2014). The company other study
some factors that cause the instability in an is no exception to this phenomenon. All that is
organisation’s workforce include illnesses, revealed by the organisation through records and
retirements, attritions or finding better jobs. Garg practices is that the organisation has various
and Van Weele (2012) assert that the lack of proper development programmes that include Internships,
succession planning in an organisation can have a Learner-ships and Engineers-In-Training (EIT)
direct effect of causing business to collapse upon platforms. However, these interventions do not form
departure of key players. A lot of companies in the part of a long term strategic plan which will benefit
manufacturing sector are experiencing a shortage of the company in the future as these trainees are
skilled employees owing to retirements; deaths, normally released after the programme has been
talent poaching and changing of jobs (Human completed. Succession planning is thus, vital to instil
Resource Development Council, HRDC, 2012). The stability in an organisation since a need for
Sugar Manufacturing Company, the organisation succession can confront any business at any time
under study, has not been immune to such irrespective of their magnitude or size (Durst and
unfortunate events. Research shows that many Wilhelm, 2012: 639). Hall-Ellis (2015) affirms that
organisations are not ready or well equipped to departures of retiring employees and co-workers
confront the talent crisis when it occurs as they leaving the company can have significant
usually lack official succession planning consequences. A reflection on previous studies
programmes aimed at creating “a feeder pool” of relating to succession planning indicates that, as

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organisational circumstances changes through encouragement of individual advancement”.

business growth, promotions and resignations of According to King (2005), as cited in Garg and
key staff, proactive succession planning will provide Weele (2012), succession planning is actually a
a guarantee that the company will have a backup practice that warrants uninterrupted effective
pool of talent ready to fulfil new roles (Mathur, functioning of an organisation by instituting a
2011). process that assists in developing and replacing key
The Sugar Manufacturing Company being staff members over time. Mathur (2011) is in
investigated has recently lost a number of key agreement with these writers stating that succession
employees in managerial and other critical positions planning system is intended to ensure that skilled
due to deaths, retirements, dismissals and and talented employees are prepared to take over
resignations. This in turn has forced the company each key role in the event of sudden loss of
to, at times, reinstate retired employees or hire efficiency created by retirements, death, serious
externally due to lack of suitable replacements from illnesses or promotions. The aforementioned author
internal workforce. This is a persistent problem further explains succession planning as some form
within the sugar manufacturing industry. According of internal recruitment where highly capable
to Blazevic (2013), the sugar industry is potentially employees have their abilities, skills and knowledge
at high risk of not achieving its goals of increasing developed to prepare them to fill-in more
production output since there is a related increasing challenging and exciting roles.
departure of farmers from the industry and
difficulty in attracting new talent. The Staff Retention
unprecedented early retirement by managers at all
levels and failure by the organisation to fill the “Turnover is very costly to the organisation in terms
vacant positions created by early retirement is a of financial bearings, its implications on employee
cause for concern at this company under study. morale and customer satisfaction” (Eshiteti et al.,
Research has been conducted on succession 2013). Tunje (2014), thus, refer to staff retention as
planning in the past, however, minimum research the capability of a company to keep its employees
has been done in the sugar manufacturing industry from leaving the company while reducing staff
(Mathur & Agarwal, 2013). turnover. Schroeder, Goldstein, and Rungtusanatham
The aim of this study is to explore (2013) state that employee retention and low
management’s perceptions regarding succession employee turnover assist in driving production
planning at a Sugar Manufacturing Company and the efficiency and customer value. Chitsaz-Isfahani and
impact succession planning has on staff retention. Boustani (2014) on the other hand state that
Objectives of the study: “employee retention is commonly considered to
 To determine the perceptions of employees at mean the ability to maintain a stable human
management level on the current succession resource”. The above mentioned authors further
planning practices using a case of a Sugar refer to employee retention as all that energy
Manufacturing Company. exerted by the organisation to alleviate the chances
 To determine the factors hindering successful of an individual to remain longer within the
implementation of succession planning using a case company.
of a Sugar Manufacturing Company.
Succession Planning Practices
2. LITERATURE REVIEW
Mathur (2011) concedes that finding suitable
Definition of Terms replacements is a process that requires complex
design and strategy. The author further suggests a
In order to get a better insight to this study, it is three phase model of succession planning which
important to define the two key terms that are companies use to characterise their succession and
applicable: succession planning and staff retention. development practises as follows:
- Phase I - Identify key roles for succession or
Succession Planning replacement planning and define the competencies
and motivational profile required to undertake those
Mehrabani and Mohamad (2011) suggests that the roles.
key to the future success of an organisation is - Phase II - Assess people against these criteria -
determined by how it assesses and understands the with a future orientation.
value of the people it has and what resources it will - Phase III - Identify pools of talent that could
need in the future. The aforementioned authors potentially fill and perform highly in key roles and
further state that the one human resource tool develop employees to be ready for advancement into
which can assist to determine the current and future key.
needs of the organisation is succession planning. Rothwell (2002) as cited in Mehrabani and
Collins (2009) as referred by Adewale, Abolaji and Mohamad (2013), affirm that there are other
Kolade (2011) views succession planning as a common practices that can assist in successfully
practice that can offer seamless leadership achieving effective succession planning efforts.
transition throughout the company. Rothwell (2011) These include:
as cited in Garg and Weele (2012) supports the above  Clarifying the aim and the desired results of
authors stating that “succession planning is a the effort.
deliberate and systematic effort by an organisation  Determining the requirements of the current
to ensure leadership continuity in key positions, performance.
retention and development of intellectual and  Measuring the performance and determining
knowledge capital for the future, and the performance that might be needed in the future.

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 Assessing the potential, establishing a way to predecessor decides to step down

narrow the gaps, following up and documenting  The second component involves changing
competence. management style – The succession process requires
 Making and maintaining rewards for an incumbent to be taught how to lead and manage,
developing people, evaluating results and leading the predecessor must at times forgo their personal
from the front (Mehrabani & Mohamad, 2013). leadership and management style and become the
teacher and mentor for the candidate.
Main Components of Succession Planning  The third component is successor training and
development - The success of the potential
Stadler (2011) acclaims that succession planning and descendent lies in getting the appropriate leadership
management should be in line with the development training.
organisation’s strategic vision and objectives.  The fourth and final component is selecting
Mutunga and Gachunga (2013) suggest four main the successor – There are many factors to consider
components to Leadership Succession Planning: when qualifying an individual to lead and manage,
 The first component is identifying the these include knowledge, skills, abilities, motivation,
potential successor - this is the process of selecting ambition, temperament, formal education and
a suitable candidate to take over in the event that a experience.
key leadership position becomes vacant. This The above can be further simplified as in Fig 1
involves identifying at least one or preferable more – Main components to leadership succession
than one candidate who should begin the succession planning.
process as soon as possible and long before the

Figure 1. Main components to leadership succession planning

Identifying potential Successor

Changing management style

Successor training and development

Selecting successor

Source: Adopted from Mutunga and Gachunga (2013)

The influence of succession planning on staff Stadler (2011) affirms that employees with high
retention job satisfaction are normally committed to the
company as they believe the company has great
Imna and Hassan (2015) affirm that one of the main future for them and in the end will care about their
critical issues companies face today, particularly in contribution to the organisation. Committed
the sugar manufacturing industry, is to retain their employees are more likely to excel in their jobs,
workforce. Das and Baruah (2013) points out that remain in employment longer and resist job offers,
the weathering life-long success of an organisation subsequently increasing retention rates and
rest upon retaining of the key role players. Gulzar productivity (Stadler, 2011). Oladapo (2014) asserts
and Durrani (2014) assert that organisations need to that successful retention practices begin with good
invest in human capital, however, this call for proper hiring practices since competent and motivated
planning. Gulzar and Durrani (2014) further people will stay longer. Branham (2005) as quoted in
stipulate that appropriate talent management Oladopo (2014) ascertain that poor hiring practices
policies and practices that exhibit commitment to escalates turnover in two ways: new recruits that are
employee development produce more committed incompatible and disorientated tend to leave
staff members within the organisation and reduce quickly; experienced staff, on the other hand, can
staff turnover. Tunje (2014: 61) asserts that for become highly frustrated at the revolving door of
succession planning to be implemented in an effort newcomers that places a continual burden on their
to retain employees, focus needs to be laid on career time and performance.
management and talent management. The
aforementioned author emphasised that the existing Factors affecting succession planning
succession planning practices should always lead to
employee retention and therefore, conscious Mutunga and Gachunga (2013) views succession
decisions need to be made when promoting talented planning as a unique process where one-size-fits-all
employees. The outcomes of the research done by approach is simply not appropriate. Mathur (2011:
Eshiteti et al. (2013) indicate that succession 55) adds that there are several factors which affect
planning programmes enable employee development the process of succession planning. These factors do
opportunities and job satisfaction which in turn has not only affect the productivity, reputation, brand
a great influence on staff retention. image and morale of employees but affect the

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overall organisation. These factors include method has been adopted in this study. This type of
succession plan, size of company and leadership case study is used to explore those situations in
development. These are discussed as follows: which the intervention being evaluated has no clear,
 Succession plan: It offers a blueprint for the single set of outcomes (Yin, 2012). The use of case
growth of the organisation and is vital to the study as a research methodology to collect data is
prolonged existence of any business. Executing a appropriate for this study because it is a means to
succession strategy can be daunting as it is not a provide rich drawings, descriptions, considerations
one-size-fits-all but needs to be customized for each and clarifications of the events being investigated.
particular organisation. It should be considered that The primary data collection for this study came in
what works well for one company might not work the form of in-depth interviews using semi-
for the other (Mathur, 2011). The important factors structured questions. Furthermore, additional
that assist to guide organisation in undertaking documents were analysed. These included the
succession planning include having a strong human company’s succession planning policy, employment
resources (HR) that will take succession planning equity policy, corporate governance guidelines, and
practices very seriously (Mehrabani & Mohamad, company commitments guidelines. Tracy (2013)
2011). Succession planning as part of Recruitment writes that an underlying principle in the collection
Plan, Training Plan and Career Growth Management of data in case research is that of triangulation, i.e.,
Plan with Performance Appraisal and HRMS tools the use and combination of different methods to
assists to ensure that the right kind of people in study the same phenomenon and it is considered
right numbers at the right time is available to help in worthwhile because a key concern for good research
sustaining continuity of strength and vitality of an is its reliability and formal generalisability.
organisation (Mateso, 2010). Purposive sampling was used in this study
 Size of company: According to Mathur (2011:55), because, with purposive sampling, one needs to use
a large size company must ensure that it has a larger one’s judgement to select cases that will best enable
pool of potential successors to choose from. The the researcher to answer research questions and to
organisation may in the beginning identify several meet objectives (Saunders, Lewis, and Thornhill,
candidates followed by monitoring their 2012). The participants in this study were managers,
performance and later make a decision when it is supervisors, assistant supervisors and foremen
closer to time for them to take over. With smaller because of their vast knowledge and experience that
organisations, however, designating a replacement was considered valuable for this study, hence
may be more challenging. The organisation might judgemental. This consisted of Human Resources
have a shortage of employees prepared to take over, Manager, Research and Development Manager,
and there may be a need to employ someone Production Manager, Training Manager, Sales
precisely for the position, or hire employees based Manager, Plant Engineer, Project Engineer, Safety,
not only on how qualified they are for the job, but Health and Environmental (SHE) Officer, Stores
on how qualified they are to move up to higher-level Controller, Extract Factory Foreman, SPP supervisor,
positions (Mateso, 2010). Assistant Production Manager - Extract, Assistant
 Leadership development: Successful succession Production Manager - Sugar, Technical Assistant:
planning does not only depend on identifying Quality Control (QC), and Management Accountant.
suitable candidates to take over, but mentoring A total of 15 individuals participated in this study.
potential successors to ensure they are well According to Saunders et al. (2012), this sample size
equipped (Koranteng, 2014). The biggest mistake is sufficient and appropriate. The interviews were
that most companies do, is simply replacing key conducted between May and June 2016 based on the
executives instead of assessing all employees and availability of the informants using an audio
identifying and training any person with potential to recorder.
move up (Mathur, 2011). Organisations with
leadership development programmes in place 4. RESEARCH FINDINGS
normally will have a much larger feeder of
successors from which to choose from, and who will To ensure triangulation, field notes from direct
be better trained to take on a greater variety of roles. observation and company policies were incorporated
into the analysis of data to complement in-depth
3. RESEARCH METHODOLOGY interviews. This exercise was performed to ensure
reliability and validity of the findings and thus
The research consisted of literature review and address bias. The results were analysed in
empirical study. The historical review laid a accordance to the themes, objectives, and questions
foundation that guided empirical study and set out for this research, using a tabular approach.
provided an insight and understanding into the The study themes, objectives and interview
research problem. questions are as shown in Table 1 below:
Qualitative exploratory case study research

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Table 1. Themes, objectives and interview questions

Themes Objectives Interview questions

1. Perceptions on To determine the perceptions of  Does the organisation have internal candidates who can
the available employees at management level on succeed the current managers or be placed in key positions
succession the current succession planning over the short and long term?
planning practices using a case of a Sugar  What action has been taken to assess and develop
programmes Manufacturing Company. internal candidates?
To explore whether succession  How does the top management ensure that they put in
planning practices influence staff place the process/programmes necessary to create room for
retention using a case of a Sugar future leadership talent?
2. Factors that Manufacturing Company.  What are the internal factors affecting the successful
influence the implementation of succession planning within the
successful company?
implementation  Do you think there is sufficient awareness among
of succession employees within the company regarding the succession
planning. planning issues?
 Are there any retention challenges pertinent to the
current managers?
 Are there challenges outside the company affecting the
company’s ability to recruit needed talent?

The results are discussed as follows: Theme 1. Perceptions on the available succession
planning programmes

Table 2. Availability of internal candidates to succeed current managers

Does the organisation have internal candidates who can succeed the current
Question
managers or be placed in key positions over the short or long-term?
Participant Response
Technical Assistant: QC No. There are no skilled people available in this department.
No. In this department, people are restricted to what they are hired for. “We are
APM Sugar historically not good at giving the guys a nice overview of the entire section so that
they experience other position”.
APM Extract Yes. However, training and guidance needs to be provided.
SPP Supervisor Yes, “provided they are given a chance”
Extract Factory Foreman Yes. There are however, limited at this stage.
Stores controller Yes. It depends on departments
Yes, in this department. There are no people available in other departments such
SHE Officer
as production and engineering.
Plant Engineer “In some departments there are people available but not in my department”.
“it depends on the positions. Higher management positions in my department
Project Engineer
require skills that the company doesn’t have at the moment”.
Sales Manager Yes.
Training Manager Yes (in this department).
No. “Currently we don’t have the general manager, engineering manager, and
Production Manager
electrical manager. These skills will have to be acquired externally”.
R and D Manager In other departments yes, but not in this department
HR Manager Yes. “Below management positions there are assistants and foremen”
Management Accountant Yes (in this department). Not in other departments

It is evident from Table 2 that there is no Development Manager asserts “There is no one
consensus agreement in terms of managers’ currently, who can take over my current position”.
responses regarding the availability of candidates The informants’ responses were based on their
internally to succeed the current managers. The experiences within their respective departments. The
company’s management accountant concedes that majority that agreed that they have internal
within her department there are good potential candidates who can succeed the current managers in
candidates to succeed the current manager, their departments, also pointed out that in other
however, in the production department there is no departments such as production, engineering and
one groomed to take over from the current manager. electrical, there are no candidates available. It can
The Production Manager adds that “In my therefore be concluded that certain departments
department, if I were loose an APM (Assistant with the company, have candidates internally, who
Production Manager), I don’t have someone who can succeed the current managers or who could be
would fill that position”. Likewise, the Research and placed in key positions.

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Table 3. Actions taken to develop internal candidates

Question What action has been taken to assess and develop internal candidates?
Participant Response
Technical Assistant: QC Nothing formal
APM Sugar Encouraging stuff members to further their studies.
“It’s generally quite shallow. We simply make our guys aware of how they can move
APM Extract
up.”
SPP Supervisor Offering training courses such as management development.
Extract Factory Foreman Training and development of employees.
Stores controller “We have not been exposed to that in my department”.
“There has been training done to develop employees within this department but at
SHE Officer an informal level. There are no formal plans in place to assess and develop internal
candidates”.
“Nothing has been done presently except the identification of training needs for the
Plant Engineer
development of individuals”.
“We use the Engineers In Training (EIT) programme, UCL bursaries in the
Project Engineer engineering department and artisan programmes. Other than that we don’t have
anything that prepares one for a management position”.
Sales Manager “I have not seen anything at all”.
“Skills gap analysis was performed and then created a multi-skill programme for
Training Manager
the employees, which is not implemented”.
Supervisory courses and management courses are offered to supervisors and
Production Manager
foremen.
“I can’t think of anything within this division. However, in the sugar production,
R and D Manager
they have a 10 week course.”
“The employment committee looks at those issues and the training and development
HR Manager
department helps us in this regard”.
Management Accountant “There has not been much action happening”.

Table 3 shows that the majority of respondents agreement that there are no formal programmes in
does not see much action being taken at the Sugar place to assess and develop internal candidates
Manufacturing Company, to assess and develop within the company. Despite the company’s
internal candidates. However, some informants commitment to developing its staff through various
mentioned that there are programmes available for programmes as is indicated in the Corporate
employees such as opportunities for stuff members Governance Policies and Guidance Manual (2010),
to further their studies, management courses for there seem to be a lack of implementation of these
supervisor and foremen and artisan programmes. programmes.
The general view is that the majority of these
programmes are done informally. For example, the Theme 2. Factors that influence the successful
SHE officer and the Training Manager are in implementation of succession planning.

Table 4. Programmes put in place for future leadership

How does the top management ensure that they put in place the
Question
process/programmes necessary to create room for future leadership talent?
Participant Response
Technical Assistant: QC Commitment from top management in terms of providing funding for training and
development and releasing employees from their current roles to further their studies.
APM Sugar Study incentives.
APM Extract “We provide an opportunity to our guys to interact with each other”.
SPP Supervisor Selecting and sending candidates to management development courses
Extract Factory Foreman ”We put employees through training”
Stores controller Training programmes
SHE Officer “We don’t have formal and structured programmes”.
Plant Engineer “Currently, we give artisans an opportunity to act as managers whenever one of the
managers is off duty.”
Project Engineer “We have the EIT programme, but nothing is formal and structured. The
implementation of these programmes depends on managers in their respective
departments and they also depend on the availability of time.”
Sales Manager “I have not seen anything yet”.
Training Manager By using management development courses.
Production Manager Training and development of foremen and supervisors.
R and D Manager “I am not aware of what they do at UCL.”
HR Manager Study incentive schemes and training and development programmes.
Management Accountant Through training and development.

In Table 4, it appears that the majority of process/programmes necessary to create room for
respondents share the same view that the top future leadership talent mainly by offering training
management ensures that they put in place the and development programmes or offering study

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incentive schemes. According to the company’s succession planning and training and development
Annual Report (2014), there were 516 employees as a winning combination. Stahl et al. (2012) argue
who benefited from training and development that “although investment in training and
interventions in 2014. Stahl, Björkman, Farndale, development is important, training programs, tools,
Morris, Paauwe, Stiles, Trevor and Wright (2012 and practices alone are insufficient; companies that
maintain that most companies invest heavily on excel in talent management make leadership
training and development to show their commitment development an integral part of their culture and
to succession planning. Hall-Ellis (2015) refers to actively involve their senior leaders in the process”.

Table 5. Internal factors affecting successful implementation of succession planning

What are internal factors affecting the successful implementation of

Question
succession planning within the company?
Participant Response
Lack of time and energy.
Technical Assistant: QC
The process is not done correctly to identify candidates.
Overlooking capable candidates.
APM Sugar
Preferential treatment based on race.
APM Extract Willingness of employees to improve themselves.
SPP Supervisor Succession planning not communicated and implemented.
Extract Factory Foreman Employees lack motivation.
Stores controller Poor management and lack of motivation by management.
Lack of knowledge by top management.
Preferential treatment and favouritism
SHE Officer
Implementation costs
The organisational culture.
Plant Engineer No policy documents or guidelines regarding succession planning.
Lack of emphasis from top management.
Project Engineer
Formalisation of it is lacking.
Sales Manager Company’s refusal to accept new ideas and refusal to share information.
Training Manager The retention strategy is not effective.
Limited skills to choose from.
Willingness of people to participate.
Production Manager
Financial constraints.
Lack of strategy from top management
R and D Manager The workload is too much for the managers to train their successors.
HR Manager Lack of plans in place for each management positions
Management Accountant Unwillingness to share knowledge.

Table 5 shows that all respondents are in implementation of succession planning. According
agreement that there are internal factors affecting to Mateso (2010) these factors are:
the successful implementation of succession - Lack of suitable culture to support succession
planning within the company. These include lack of planning.
knowledge and motivation by top management, lack - Lack of support of succession planning from top
of time and willingness of employees to participate management.
in training and development programmes, lack of - Unethical hiring and promotion practices such as
succession planning strategy from top management favouritism, nepotism, corruption, and internal
and costs of implementing succession planning politics.
programmes. The aforementioned factors are - Budget and financial limitations.
consistent with those found by Mateso (2010) to be
prevalent factors hindering the successful

Table 6. Succession planning awareness

Do you think there is sufficient awareness among employees within the

Question
company regarding the succession planning issues?
Participant Response
Technical Assistant: QC No
APM Sugar Definitely not
APM Extract No
SPP Supervisor No
Extract Factory Foreman No
Stores controller No
SHE Officer No
Plant Engineer “I don’t think so.”
Project Engineer “There is no clarity about the existence of succession planning.”
Sales Manager “It is none existent”.
Training Manager No
Production Manager No
R and D Manager No
HR Manager No
Management Accountant “This is lacking within this company.”

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In Table 6 it is clear that all the respondents plant engineer added that “Maybe the top
think that there is no sufficient awareness among management has the awareness”. The company’s
employees within the investigated company Human Resources Report (2014) asserts that
regarding the succession planning issues. The employees are engaged on internal matters using
Technical Assistant: QC responded to the question management and shop stewards’ meetings,
by saying that “Even myself I am not really familiar communications on notices and bill boards and
with it”. The Extract Factory Foremen stated that “I internal newsletters. However, it appears that this is
don’t think it is filtered down to the employees”. The not the case except on paper.

Table 7. Retention challenges pertaining current managers

Question Are there any retention challenges pertinent to the current managers?
Participant Response
Technical Assistant: QC Yes. Job satisfaction and financial circumstances.
APM Sugar Yes.
APM Extract Yes. Uncertainty because of restructuring within the company.
SPP Supervisor Yes.
Extract Factory Foreman Yes. Salary issues
Stores controller Yes. Remuneration issues.
SHE Officer Yes. Work environment, organisational culture and salary issues.
Plant Engineer Yes. Market related packages, organisational culture.
Project Engineer Yes. Remuneration and size of the company limiting promotion prospects.
Sales Manager Yes.
Training Manager Yes. Geographical location and remuneration issues.
Production Manager Yes. Lack of growth within the company, lack of strong family support base,
and financial rewards.
R and D Manager “Yes. Recently, two managers left within one month”.
HR Manager Yes. Location and financial rewards.
Management Accountant Yes. Accommodation issues.

Table 7 shows uniformity in informants’ the decision to leave or remain in an organisation”

responses to the question. It is evident that there are Terera and Ngilande, 2014). Over and above financial
challenges with regards to retaining current related issues, respondents cited job satisfaction,
managers within the company. The mostly cited lack of growth within the company, location and
challenge is remuneration. Terera and Ngirande accommodation issues as some of the factors that
(2014) point out that, financial rewards play a affect staff retention within the company. The APM
significant role in employee retention. This view is Extract added that some managers leave because of
supported by Selesho and Naile (2014) who state uncertainties within the company due to
that unattractive remuneration packages contribute restructuring. Other managers cited organisational
to staff migration in most industries. “Compensation culture is a challenge within the company and as
is a major factor employees consider when making such some managers leave the company.

Table 8. Challenges outside the company affecting recruitment

Are there challenges outside the company affecting the company’s ability to
Question
recruit needed talent? Explain
Participant Response
Yes. Shortage of skilled people in the country. “Financial rewards are also a
Technical Assistant: QC
challenge; people take up jobs where they are paid well”.
APM Sugar Yes. Geographical location
APM Extract Yes. Salaries are not competitive and work environment
SPP Supervisor Yes. No competitive remuneration packages.
Extract Factory Foreman Yes. Salary structure.
Stores controller Yes. Shortage of skilled, qualified and experienced people in the country.
SHE Officer Yes. Scarcity of skills in the country, remuneration, and geographic location.
Plant Engineer Yes. Accommodation (Geographic location).
Project Engineer Yes. The way of life due to geographic location.
Sales Manager Yes. Remuneration is not competitive and no benefits and incentives.
Training Manager Yes. Geographical location
Yes. Quality of life because the company is located in the rural area. No good
Production Manager
schools.
R and D Manager Yes. Geographical location.
HR Manager Yes. Competition with other employers.
Management Accountant Location.

All respondents in Table 8 agreed that there are that the company is located in a rural area.
challenges outside the company affecting its ability According to the participants, the location affects
to recruit needed talent. Ten out fifteen participants the quality of life and there is no variety of good
pointed out that the company’s geographical schools for their children in the village at which the
location is the main challenge. This is due to the fact company is situated. The Training Manager revealed

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 Risk governance & control: financial markets & institutions / Volume 7, Issue 3, Summer 2017

that “managers from the city find it difficult to adopt efforts were undertaken to ensure consistency while
in such an area”. She added that “the geographical conducting interviews, and the analytical procedures
location is not friendly to young potential managers”. of this study.
Apart from geographically related challenges, it also This study was also limited to one sugar
emerges that, other challenges relate to the scarcity manufacturing company within the province of
of skills in the country and as such there is KwaZulu-Natal in South Africa and only 15
competition amongst employers for these skills. individuals participated in this study. Generalisation
Adding to these challenges, are remuneration related should be exercised with care in terms of the
challenges. According to van Dyk, Coetzee and findings being applicable to all sugar manufacturing
Takawira (2013), retention challenges such as companies in South Africa or any emerging market.
remuneration and work-life balance have affected It may add value to use multiple case studies with a
employees’ decisions of whether to continue larger sample size in order to increase rigour of the
working for the company or leave. analysis and to compliment this study.
It can be maintained that, in order to
CONCLUSION successfully implement an effective succession
planning programme, this sector needs to have a
The study has contributed results and a research clear understanding of the relevant succession
approach that could stimulate further research on planning theories and practices that can be utilised
the important issues that affect succession planning to assist the sector in improving its succession
practices within the sugar manufacturing sector. The planning practices. This study contributes to the
literature review and the empirical study revealed identification of staff retention challenges peculiar
the management’s perceptions on the to sugar manufacturing companies such as quality
implementation of succession planning practices at of life due to the geographic location of such
the Sugar Manufacturing Company. The findings companies. The contribution of this research is to
from the study helped in meeting all the objectives add to the existing theories and concepts in
set for this study. Therefore, it can be concluded succession planning practices in the sugar
that despite the existence of succession planning manufacturing sector
policies and training and development programmes It is recommended that top management be
at the investigated company, there is still lack of seen as drivers of succession planning by actively
effective implementation of such practices within providing platforms that encourage these practices.
the company. Contributing to the lack of successful The study, in line with literature, found that top
implementation of these programmes are several management are the custodians of succession
factors which the study found to be limiting factors. planning programmes and they are influential. Top
The key findings of this study are presented as managements’ participation will facilitate in
follows: providing leadership and direction regarding the
 There is a general understanding of what implementation of succession planning.
succession planning is. The company is encouraged to improve its
 Managers perceive that the company is not communication of information across all divisions
doing enough to effectively implement succession and all its employees. This can be achieved by an
planning programmes. effective use of staff-portal, emails, notice boards,
 There are potential internal candidates who newsletters and meetings. These channelled are
can be trained to succeed current managers in the envisaged to improve the dissemination of critical
future. information in as far as succession planning is
 The current management training and concerned.
development programmes are not implemented in a It is recommended that the company develop
transparent and effective manner. an internal talent search system. This will help
 Several factors affect the successful channel the succession planning resources
implementation of succession planning and these efficiently. This can be achieved by an effective use
include but not limited to lack of top management performance appraisal systems and assessments
commitment to succession planning, poor that would be designed for the identification of
communication, and lack of employee motivation, suitable candidates that can be developed for future
time and budgetary constraints. management positions.
 Retention of managers is a challenge at the A longitudinal case study approach can be used
Sugar Manufacturing Company under study due to to identify and evaluate the implementation of
the geographical location of the company, succession planning within the company. This type
remuneration issues, size of the company (which of study would provide a much richer and more
affects employee-growth prospects), and job detailed evaluation of the implementation of
satisfaction succession planning practices by the sugar
This qualitative type of research is subject to manufacturing sector. This approach can assist in
criticism because of limitations such as researcher- determining the extent at which these practices are
related problems and fundamental design used and how effective are they.
limitations. The study used in-depth interviews as It may be critical that multiple case studies be
the primary method of data collection and this is conducted to evaluate the implementation of
also subject to the same criticisms. During the succession planning practices in the sugar
coding process, interpretations and judgements by manufacturing sector and the impact such practices
the researcher were required to categorise the have on staff retention in order to complement this
interview data. Subjectivity was, therefore, study and to increase rigour of the analysis. This
unavoidable, which could lead to possible bias in the may mean that other provinces be taken into
results. To reduce the level of this subjectivity, consideration as well.

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 Risk governance & control: financial markets & institutions / Volume 7, Issue 3, Summer 2017

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