Succession planning can be defined as the process of identifying key positions within a company and developing action plans for individuals to assume those positions at some time in the future. It is an active process associated with developing a “talent pipeline” that enables businesses to continue functioning smoothly should a critical position become vacant. Succession planning entails a deliberate strategic management decision, operating within a broader, long-term framework, and necessitates ongoing implementation for effectiveness.
What is Business Succession Planning?
A business succession plan is related to leadership development. It seeks to develop an in-house pool of talent that a company can draw from should a position become vacant. It is a three-pronged approach that involves identifying talented personnel within the company and/or recruiting qualified talent, creating, and upskilling a company talent pool and instilling loyalty. Within this process, employees are cross-trained in knowledge and skills to create a holistic rather than silo understanding of the business. Succession planning therefore is an integrated, systematic strategic approach. One which recognises develops and retains employees in line with a business’s core values and its current and projected business objectives.
Is Succession Planning the same as Replacement Planning?
Replacement planning has a shorter-term focus than succession planning. It is focused on identifying people who have the capacity to immediately fill a vacancy. This may be as a stop-gap or permanent solution. In contrast, succession planning seeks to develop in-house company talent and retain it thereby ensuring that the company moves forward seamlessly when positions are vacated. Thus, instead of just one person who could take over a role multiple people might be trained.
Why Succession Planning is Important
Succession planning is helpful to future-proof a company. Essentially, it’s a strategic decision to better safeguard the long-term success and sustainability of a company. This is because, aside from ensuring continuity in leadership as well as job functionality, it enables a company to proactively address skills gaps and minimise vacancy disruptions across the company.
Who Benefits from Succession Planning?
When done correctly, a formalised succession plan can benefit owners, employees, and the company. It can also increase the external investment appeal of a company and thereby enable business owners to sell their stakes more easily. This is because succession planning cultivates new leaders and decreases the company’s risk profile.
6 Benefits of Succession Planning
- Creates merit career advancement opportunities.
- Increases employee job satisfaction.
- Decreases staff turnover.
- Continual transfer of pertinent company knowledge and expertise.
- Improves turn-around on filling vacancies.
- Promotes better company-relevant employee career development.
Why does Succession Planning Fail?
The number one reason for it to fail is poor planning. Succession planning requires a long-term vision to take the company successfully from where it is to where it will be. To do this management and HR need to coordinate with each other and have the same vision of developing in-house talent. Furthermore, communication is key and starts with conveying a company’s step-by-step succession plan’s vision. Without good communication between the company and its employees, opportunities to develop and grow staff into roles will be lost. This will decrease the available in-house company talent. Something that can further be diminished by a lack of insight into the existing staff skills levels. Both these factors can lead to a talent pool scarcity which increases the likelihood of a succession plan failure.
Who should do Succession Planning?
In bigger companies, the initial plan (strategy) is usually undertaken as a joint effort between management and human resources (HR). Thereafter it is rolled out and progress is monitored by HR. Ideally, there should be regular meetings scheduled between management and HR. These meetings should focus on assessing the progress and success of the succession strategy.
In smaller companies, the director or CEO primarily undertakes putting together a succession strategy. Thereafter, if applicable, they will include any managers the company might have. The continuation of strategy monitoring and oversight thereof is usually done by the director / CEO.
Thus, executives, management, and HR all have a role when it comes to succession strategizing and implementation. Once the plan is implemented employees also have a role to play. Specifically, they are responsible for actively developing their careers. This starts by identifying and relaying to management what roles they would like to be developed towards. And thereafter pursuing opportunities to upskill themselves accordingly.
How to do Succession Planning
A succession planning strategy falls within the broader human resource company planning process. 5 basic steps should happen during this process.
5 Steps of Succession Planning
- Identify key areas and key positions.
- Categorise what competencies are necessary to fulfil the requirements of the key positions and ensure key areas can function optimally.
- Seek out interested employees and assess them against the required competencies of each key position.
- Develop upskilling programmes for staff that also includes succession and knowledge transference.
- Monitor and evaluate the effectiveness of the programme, and adjust accordingly to ensure its success.
Who can Assist Your Company?
As succession planning involves identifying, recruiting, and retaining talent it is advantageous to work alongside a reputable recruitment agency. Companies, like the Key Recruitment Group, are experts in finding talent and assisting companies to better retain key staff once employed. They are also able to assist in the designing of job descriptions and career development plans. Contact a Key Recruitment Expert to discuss how their expertise can help you future-proof your company.