Succession planning involves identifying the potential leaders of future key roles within an organization. It also covers proactively developing these individuals through job moves and secondments.
While succession plans typically refer to CEOs, board members and other senior management positions, they can also be applied to other key roles. These may include technical, operational or other roles in the business.
Identifying the Need
A succession planning system helps ensure that if you lose key leadership or management positions, you have employees ready to step in. It can also help avoid a costly recruitment process to find a replacement.
Many companies are facing an aging workforce and talent shortages. As a result, it’s becoming increasingly important to have an effective succession plan in place.
Succession planning focuses on matching skills desired by employees with roles in the organization. It can involve training for higher and more varied positions, on-the-job shadowing and even promotion to new jobs or departments.
This system is often a long-term commitment that requires consistent monitoring and maintenance. But the results are well worth it. The payoff is an incredibly capable staff, better business continuity and smoother operations.
Identifying the Right Person
Having the right person for the job is critical to succession planning. Unlike traditional recruiting, where it’s more about a technical fit, it often comes down to how well someone fits into a company’s culture.
Succession planning systems need to assess candidates objectively and uncover hidden potential. Moreover, they should develop talent pools of future leaders and offer tools to keep them engaged and developing.
Regardless of your size or industry, every company needs succession planning to ensure business continuity when key leaders leave the organization. Losing a crucial employee is disruptive, and even the most successful companies can run off the rails without the right people in place.
Identifying the Right Time
Identifying the right time to implement a succession planning system is an essential step to ensure that your company’s success and the continuity of business operations are secure. It’s also an important step for avoiding talent loss, which is rising in today’s workforce as more employees take advantage of opportunities outside the organization to advance their careers.
Employees are looking for a clear career path and visibility in their workplace. 80 percent of 2023 Pulse of Talent respondents said they are more loyal to their employers when they see a strong future for themselves in their current position.
Developing a succession plan is a process that requires constant communication and careful strategy. It also requires updating and changing plans as needs change. This is why it’s important to start planning early so that your internal talent has a solid base of skills and competencies ready to move into the next role.
Developing the Right Plan
Developing the right plan is key to building a strong talent pipeline. The best succession plans match the skills desired by employees, ensuring you’re not overlooking essential positions for innovation or business growth.
To develop the right plan, start by identifying your most critical positions. These are the roles that would have an impact on your business if they were unoccupied for any length of time.
Your succession plan should cover every aspect of these roles, including the specific leadership and technical skills they require. Succession planning can also be a great tool for attracting and retaining new talent and a strategy for minimizing turnover and attrition.
A well-thought-out succession plan can help you avoid the market value losses experienced by public companies when a senior leader’s departure occurs without a clear replacement plan in place. It can also help your shareholders retain confidence in your company’s future when they see a clear path for successors to take over leadership positions.