In 2025, the finance industry is facing a crisis – it’s not just a skill shortage that businesses are dealing with anymore; it’s a significant lack of leadership potential. Faced with limited resources and budgets, countless finance teams have put leadership training and succession strategies on hold in recent years, and now they are feeling the impact as the market shifts.
A wave of retirements, accelerated by shifting workforce expectations and post-pandemic transformations, has left many organisations scrambling to fill key roles. Traditional succession planning methods – relying on static, years-old talent maps – are not driving the results in today’s world, as modern financial institutions grapple with unique hurdles.
It is time to rethink succession planning, focusing on creating diverse, future-ready talent pipelines with a strategy that embraces agility, inclusivity, and alignment with broader organisational goals. Here is how you can strengthen your talent pipeline this year.
The Evolving Finance Leadership LandscapeÂ
Leadership shortages are becoming increasingly common in every industry, as new candidate preferences lead to more complex talent acquisition strategies, and generational shifts create significant gaps in teams. The finance landscape is feeling the pinch more than most.
Technological advancements, regulatory changes, and the increasing complexity of global markets are placing additional demands on finance staff. Leaders in this industry are not just number crunchers anymore; they are strategic decision-makers navigating digital transformation, Environmental, Social, and Governance (ESG) imperatives, and increasingly stringent regulatory requirements.
Integrating AI and automation into finance operations and refining traditional roles requires leaders to demonstrate more sustainable soft skills and digital literacy. Without the right succession planning, companies risk leaving their businesses without the needed leaders.
Succession planning is not just about ensuring business continuity and mitigating talent shortages. It fosters employee engagement and retention, drives companies towards continued growth, and facilitates ongoing knowledge transfer to ensure that institutional knowledge is not lost.
It is also how companies ensure they can stay agile when exposed to ever-evolving challenges in various financial sectors. Succession planning helps investment banks identify and nurture leaders who can maintain growth during economic uncertainty. It helps Fintech disrupters scale operations rapidly and asset management teams navigate new demands for sustainability and diversity in investment options. Succession planning is the key to future-proofing businesses.
Building Future-Ready Talent Pools: Strategy DevelopmentÂ
Effective succession planning relies on a comprehensive approach to building agile, future-ready talent pools. Developing talent pools is how institutions go beyond “reactive” hiring strategies to foster a culture of continuous development. To prepare for consistent growth in a complex market, business leaders need to concentrate on:
Identifying High-Potential Roles and EmployeesÂ
Begin by pinpointing critical roles that directly influence organisational success. Use competency matrices and skills mapping tools to assess which positions are most valuable for your team. This will ensure you are focusing on filling roles that drive long-term performance.
Next, think about your “high potential” employees. Don’t just focus on people who have spent the most time in your business or have the best “title.” Look for professionals with the hard and soft skills to help you reach your business goals.
Employee assessments and performance reviews can give you an insight into staff with the digital literacy skills, resilience, or leadership potential that will push your business forward.
Creating Assessment FrameworksÂ
Assessment frameworks are vital for objectively evaluating employees’ leadership potential and readiness for future roles. This includes structured talent reviews, 360-degree feedback, and psychometric testing. Do not rely exclusively on past performance indicators.
According to a Gallup survey, only 2% of companies think performance management systems offer genuine insights into an employee’s future potential. Focus on analysing professionals based on their value to provide your business. Build competency matrices to help you match employees to potential roles you will need to fill going forward.
Building Development Programs Â
Next, consider how you will facilitate knowledge transfer between existing leaders and future employees, build on the skills of your existing workers, and help prepare them for new roles. Cross-training is an excellent option for assisting employees in gaining broader skills and perspectives by interacting with different departments.
Leadership development programs can prepare staff for executive roles by honing their decision-making and strategic thinking skills. Mentorship schemes enable ongoing knowledge transfer, while everyday training initiatives and courses can help fill the gaps in your current talent pool.
Committing to developing your employees supports your succession plan and can also help boost talent retention rates.
Enhancing Success: Creating Inclusive Succession PipelinesÂ
One of the biggest mistakes finance companies can make regarding succession planning is taking a “narrow” approach. Many organisations follow the same strategy when developing leaders, focusing all their attention on long-tenured employees or people with specific characteristics.
However, as industries evolve, so do the skills required for effective leadership, making a diverse approach to succession planning increasingly important. Do not limit your talent pool by placing unnecessary restrictions on who you will nurture. Focus on:
Broadening Diversity in LeadershipÂ
Prioritise diversity and inclusion. Actively identify high-potential talent from underrepresented groups, including women, ethnic minorities, and those from non-traditional career paths. For example, remote and hybrid work environments offer opportunities to engage talented individuals outside core office locations, creating a global talent pool.
Embrace non-traditional candidates with unconventional backgrounds or career trajectories, such as those with experience outside traditional finance roles or those from technology-focused sectors. These individuals bring fresh perspectives that can drive innovation.
Generational Planning and Cultural CompetencyÂ
With multiple generations coexisting in the workforce, inclusive succession pipelines must account for different career priorities and leadership styles. Emerging leaders from Gen Z and Millennial groups often value flexibility, purpose-driven roles, and rapid growth opportunities. Incorporating alternative career paths, such as project-based leadership roles or non-linear progressions, ensures the pipeline reflects evolving career aspirations.
Additionally, if you want your business to be diverse, you must commit to helping leaders become “culturally intelligent,” empathetic, and flexible. To support new leaders, develop programs focused on cultural awareness, global leadership, and conflict management.
Reducing Bias with TechnologyÂ
Technology can be a valuable tool for minimising unconscious bias in succession planning strategies. AI-driven analytical tools can help you quickly identify high-potential employees, focusing on their actual results rather than their characteristics.
Advanced performance tracking tools can offer real-time insights into employee growth and readiness for leadership roles. They can also make it easier to predict the potential success of future leaders by simulating succession scenarios for in-depth analytical insights.
Effectively Implementing Your Succession Planning StrategyÂ
A strong implementation framework is integral to developing a successful succession planning strategy. To make sure you are approaching your initiative correctly and getting the best return on your investment, make sure you:
1. Develop a Clear TimelineÂ
Set realistic timelines for each stage of the succession planning process, from talent identification to training and eventual role transitions. Breaking the process into phases with key milestones will help you stay ahead of changing talent needs and minimise the risk of sudden talent gaps.
2. Allocate Resources StrategicallyÂ
Ensure adequate allocation of time, budget, and staff. Dedicated HR teams, robust technology platforms, and even expert recruitment companies are all extremely valuable in ensuring the success of your plan. Do not underestimate the importance of resource allocation.
3. Invest in Technology
Technology and data can impact succession planning, helping financial companies make smarter and faster decisions. Use AI-driven talent analytics to pinpoint high-potential talent. Use predictive modelling tools to evaluate succession analysis and intelligent systems to match high-potential staff members to new roles.
4. Commit to Communication
Involve senior leadership, department heads, and employees early in the process, and commit to constant communication. Transparent communication builds trust and reduces resistance to change. Share the succession plan’s purpose, process, and expected benefits with your team.
5. Define Metrics and Monitor ProgressÂ
Identify metrics to help you track the success of your plan. For instance, you might monitor retention rates, internal promotion success, engagement levels, and overall performance. Use performance tracking tools and an AI-powered system to measure progress and identify opportunities for improvement.
6. Remember Risk Mitigation and Change ManagementÂ
Change is not easy, and some employees will show resistance. The key to success is keeping everyone informed and engaged. Show staff members how your succession plan benefits the organisation – and their career. Ask for their feedback regularly on improving and share genuine metrics and success insights with your team.
For finance companies, a succession plan is not a luxury but a critical tool for staying competitive in an increasingly complicated and skills-short environment. As finance continues to evolve, companies must take a forward-thinking approach to developing and nurturing their teams.
If you want to side-step skill gaps and future-proof your business, the time to start developing a strong approach to succession planning is now. Contact Rebus Recruitment to learn how we can help you find, recruit, and nurture the leaders of tomorrow.
Regards,
Rachel
About Rebus Financial Recruitment
Rebus Financial Recruitment provides a specialist and focused recruitment service to its customers, ranging from various organisations, including SMEs, to large PLCs. We strive to offer both the client and candidate a seamless recruitment experience. Using our expertise, we understand employer and employee needs and match them perfectly.
To learn more, contact one of our team members today or call us at 01282 930930.
