Why HRDs Still Struggle to Hire Their Own Successors – And How to Fix It

For a function that spends so much time talking about succession, HR is surprisingly exposed when it comes to its own leadership bench. Many financial services organisations can point to detailed plans for front‑office and revenue‑generating roles, yet ask who could credibly step into the HRD or CPO seat in the next 12–24 months and the answers become vague, political, or worryingly thin.

It is an uncomfortable truth: the function that should be modelling best practice in succession often feels the least deliberate about its own.

Most HRDs recognise the pattern. You sit on the succession steering group, you partner with the CEO on critical roles, you challenge the business on depth, diversity and readiness. But your own role is rarely discussed with the same objectivity.

Boards assume “there will always be good HR talent out there” until a retirement, a move to a bigger group role, or an unexpected resignation turns HR leadership into a live risk. At that point, what should have been a multi‑year strategy becomes a reactive search in a market that is more constrained, more competitive and more complex than people realise.

Three reasons HRDs struggle to hire their successors

1.Narrow internal pipelines

In financial services, succession planning is typically strongest where regulators and investors look hardest: Front‑Office, Risk, Finance, and sometimes Technology. HR, Reward, and People functions do not always receive the same systematic treatment.

Career paths into the HRD or future CPO role are often informal. High‑potential HRBPs, Reward Directors, or Talent leaders may be recognised as “ones to watch”, but the path from promise to readiness is rarely designed with the same rigour as a future CFO or COO. Rotational moves, international exposure, and structured stretch assignments are patchy. Critical experiences – navigating unions, leading large‑scale transformation, owning regulatory people risk, overseeing complex global reward – don’t always sit together in one role, so emerging leaders collect them by chance rather than design.

The result is a shallow bench: good operators, but fewer leaders who have been deliberately prepared to step into the enterprise‑level expectations that now sit with the HRD or CPO in a regulated environment.

2.“Mini‑me” bias and comfort hires

Sponsors back people who feel familiar. HR is not immune to that dynamic.

When thinking about successors, HRDs often start by looking for someone who has walked a similar path – the same generalist background, the same sector exposure, a similar leadership style. That instinct is understandable; the role is high‑stakes, the context is political, and familiarity can feel like a proxy for safety.

The unintended consequence is “mini‑me” succession. You get strong continuity, but you also hard‑wire the same blind spots into the next generation: similar backgrounds, similar networks, similar comfort zones in the HR portfolio. You reduce the chance of bringing in someone who might challenge the status quo on reward, experiment with different operating models, or stretch the function into new areas such as people analytics or skills‑based workforce planning.

In a market that is asking HR to look and behave differently, a carbon copy of the previous generation is not always what the organisation needs and that’s without reviewing ED&I or social mobility issues.

3.Emotional complexity and timing

Designing yourself out of a job is emotionally complex. It asks leaders to confront questions of legacy, timing, and identity:

Am I ready to hand over?
How will this be perceived by the CEO and the board?
What does my successor say about me?

Those questions can cause understandable hesitation. Succession conversations become personal rather than strategic. In some cases, they are quietly deferred: “We’ll look at that next year.” In others, the plan exists on paper but isn’t tested against reality.

Layer on the specific dynamics of financial services: regulatory scrutiny, cost pressure, public expectations around culture and reward – and the stakes feel even higher. Boards become cautious about “experimenting” with different profiles. HRDs worry that naming a strong successor too early will trigger their own exit before they’re ready. Everyone agrees succession matters, but no one quite wants to own the hard decisions.

By the time a change is unavoidable, the organisation is left choosing between a rushed internal elevation, a long external search, or a compromise candidate.

The risks of getting it wrong in financial services

When the HRD or CPO succession is mishandled in FS, the impact is rarely confined to the HR team.

Enterprise risk: HR leadership is now central to conduct, culture, and people risk. A prolonged gap or mis‑hire can destabilise reward governance, jeopardise regulatory relationships and slow transformation at precisely the wrong time.
Regulatory and stakeholder confidence: Regulators, investors and rating agencies are increasingly attuned to how firms manage people risk. Visible instability at the top of HR can raise questions about the organisation’s ability to sustain its commitments on culture, SMCR, ED&I and pay.
Talent market reality: Senior HR leaders with deep FS experience, credibility with regulators and a track record of transformation are a finite population. They are highly mobile, highly networked and, in a hybrid world, more discerning about the roles they take. Assuming the market will deliver a perfect successor at short notice is optimistic at best.

In this context, HRD and CPO succession is not simply a “people project”; it is a component of the organisation’s risk and resilience strategy.

Towards a more courageous, data‑led approach

So what does “better” look like? The answer is not a glossy succession deck that is quietly parked until the next board cycle. It is a more courageous, data‑led approach that treats HRD and future CPO succession with the same seriousness as any other critical role.

This is the space Middlemore operates in: supporting financial services organisations to build a credible, diverse bench, and helping high‑potential HR leaders bridge the gap between where they are now and the realities of the number one role.

1.Start with the role the business needs next

The first step is to detach the process from the current individual and focus on the role the organisation will need in three to five years’ time.

What will the business be asking of HR in that horizon?
Which strategic shifts are underway – digital transformation, operating model redesign, M&A, global expansion, new regulation, ESG and DEI expectations?
Given that, what must the next HRD or CPO be exceptional at, and what can they reasonably grow into?

This produces a forward‑looking success profile, not a retrospective description of the incumbent. It may emphasise capabilities such as data‑driven workforce planning, complex reward design, global matrix leadership or experience in heavily scrutinised regulatory environments.

That profile should then be translated into clear success measures and leadership behaviours that can be observed and tested, not simply a list of “nice‑to‑have” experiences.

2.Use evidence, not proxies, to assess readiness

Once there is clarity on what the future HRD or CPO must deliver, the conversation can shift from “Who feels ready?” to “Who has demonstrated what we need?”

This is where data becomes an ally:

Hard evidence from performance, 360 feedback, engagement results, and risk/audit outcomes.
Track record on critical projects: integrations, restructures, remediation programmes, large‑scale technology or reward changes.
Behaviour under pressure: how individuals have handled regulators, unions, whistle‑blowing cases, or complex stakeholder groups.

A skills‑ and evidence‑based view helps surface candidates who might be overlooked if the focus stays on job titles or tenure. A Reward Director who has quietly led multiple cross‑border transformations may be closer to ready than a more visible HRBP who has remained in one geography. A People Analytics leader with strong board presence may be more credible than assumed.

By making the criteria explicit and the assessment data‑rich, you create a more objective platform for discussion with the CEO and Chair.

3.Engineer diversity into the process

If “mini‑me” bias is left unchallenged, it will dominate succession by default. Counteracting it requires conscious design.

Practical moves include:

Insisting on genuinely diverse slates for planned and unplanned succession – across gender, ethnicity, socio‑economic background, neurodiversity, career path and functional specialism.
Ensuring evaluation is conducted by a diverse panel, rather than leaving decisions to a small circle who share similar backgrounds.
Looking beyond the “usual suspects” to people who bring different perspectives – for example, leaders from talent, ED&I, people analytics or employee relations who have already operated with enterprise‑wide impact.

This is not about appointing for diversity at the expense of competence. It is about widening the aperture so that competence is recognised in a broader range of profiles, and about building a leadership bench that is better equipped to understand and represent the workforce it serves.

4.Separate the person from the process

Finally, the governance around HRD and CPO succession needs to make it feel less personal and more normal.

That might mean:

Agreeing a regular cadence – for example, an annual or bi‑annual review of critical people leadership roles and their successors at Board or NomCo level.
Making it explicit that strong succession is a sign of leadership maturity, not a signal that someone is being pushed out.
Encouraging HRDs to take pride in building a bench that could credibly replace them – as an extension of their responsibility to the organisation, not a threat to their security.

When the process is owned collectively, it becomes easier for the incumbent to participate honestly. It also means that, when change does come, there is a shared understanding of the options rather than a scramble to fill a gap.

Where the CPO Accelerator fits

The other half of the succession challenge is preparedness: even where organisations know who their potential successors are, those individuals are not always given structured, FS‑specific development that reflects the realities of today’s CPO role.

That is why Middlemore, through Nexus in conjunction with CityHR, leads the CPO Accelerator Programme – a year‑long, experiential, module‑based development journey designed specifically for senior HR leaders in financial services who are on a realistic path to the top job.

The programme brings together a dedicated cohort of around 30 participants, each identified as having both the aspiration and potential to assume a CPO role in the next three to five years.
Monthly, in‑person workshops across the City of London are designed and delivered by incumbent CPOs and senior HR specialist thought leaders, offering a genuine “look behind the curtain” at what it means to sit on the ExCo and own the people and culture agenda.
A dynamic curriculum, refreshed quarterly, blends commercial and financial literacy, complex stakeholder management, ESG and ED&I, reward, operating model design and navigating RemCo – all under Chatham House Rules to encourage frank discussion.

An Oversight Board of influential CPOs and people leaders from across the sector ensures the content stays aligned to emerging issues and market expectations, while a participant‑led Steering Committee feeds real‑time insight back into the programme design. The result is a development environment that feels honest, stretching and directly relevant to the pressures of FS HR leadership today.

For HRDs and CPOs who are serious about succession, programmes like this turn “potential successors” into credible, board‑ready options – and give future CPOs a peer network they can lean on long after the programme ends.

What HRDs can do in the next 12 months

For HRDs in financial services who recognise themselves in some of these patterns, the next 12 months offer an opportunity to reset. A few practical steps:

Map your critical roles within HR and central people functions – HRD plus direct reports – and articulate what each role will need to deliver against your strategy over the next three to five years.
Identify at least two credible successors for each role, internal or external, and test them against evidence rather than intuition. Where there are gaps, design targeted development and exposure rather than hoping time alone will create readiness.
Review your talent data through a succession lens: who consistently shows up in conversations, who doesn’t, and what that says about opportunity, sponsorship and bias in your organisation.
Establish or strengthen governance: put HRD and CPO succession explicitly on the agenda with your CEO and Chair, alongside other critical roles. Treat it as an enterprise risk conversation, not a private HR matter.
Where you have clear, high‑potential successors in your HR population, consider whether structured, FS‑specific development – such as the CPO Accelerator Programme led by Nexus, CityHR and Middlemore – could accelerate their readiness and give them the commercial confidence, external perspective and peer network the modern CPO role demands.

Ultimately, succession planning for HR is not about planning for departure; it is about protecting continuity of culture, capability and trust.

If HR is serious about modelling the future of work for the rest of the organisation, then designing credible, diverse successors for its own top roles – and investing in their development before the vacancy arises – is one of the most powerful places to start.

To discuss your succession plans, or our CPO Accelerator Programme contact adam.oliver@middlemore.co.uk for more information.