Everything you need to know about Succession Planning

Businesses will be under more pressure in the coming years due to an aging workforce, a skills shortage, and heightened competition. Although Succession planning has never been more advantageous, few businesses even for senior leadership roles have one.

When crucial positions within your business become empty, not knowing who will fill them is like playing Russian roulette every time, with an additional bullet in the chamber. Relying solely on hiring to fill in the gaps will, at the very least, lead to a skills gap and reduce your competitiveness.

Defining Succession Planning

Succession planning is a process for identifying and developing future leaders in an organization, ensuring smooth transitions of responsibilities in the event of departures or retirements.

It helps ensure the future success and stability of the organization by establishing a pipeline of qualified leaders and a contingency plan for leadership transitions.

Breaking down Succession Planning

Succession planning is not a one-time event, rather it is a backup plan that has to be revisited and updated annually or as the company sees fit.

As such, it assesses the capabilities of each leader, identifies potential replacements both inside and outside the organization, and trains internal replacements so they are ready to take over in the event of departure, retirement, or death.

The HR department of the University of Washington has broken down the succession planning process into three phases.

1. Assessment Phase

Step 1: Identify important business challenges for the coming 5 years.

Step 2: Determine the crucial positions that will be required to sustain business continuity.

Step 3: Identify competencies, skills, and institutional knowledge that are critical success factors.

2. Evaluation Phase

Step 4: Consider high-potential employees.

Step 5: Select skills people will require to succeed in roles and tackle identified business concerns.

3. Development Phase

Step 6: Organize a Knowledge transfer(KT) session with the departing colleague.

Step 7: Create a talent pool that can fill important positions by implementing targeted career development strategies.

The Objective of Succession Planning

Through vulnerability analysis and internal candidate identification, succession planning aims to maintain the stability of your workforce and talent pipeline. It starts by determining which positions would significantly affect the company if they went unfilled for an extended period of time. The ultimate goal is to guarantee that every essential position is filled constantly and effectively.

But the structure of many-to-many linkages between employees and roles gives birth to complexity. One employee may end up serving as a succession candidate for multiple positions or multiple employees may serve as candidates for the same position. Simply said, succession planning can keep you one step ahead in your business game.

How can you Benefit from Succession Planning?

1. Safeguards your Business

To safeguard the business against hurricanes, floods, and fires, you get insurance. In order to protect the business from theft, you deploy security systems. To protect the confidential information belonging to your company, you also back up your data to a location off-site.

Many business owners become so preoccupied with running their firm on a daily basis that they neglect to prioritize succession planning. These decision-makers might believe they are too young to suffer from a major illness. Or they fail to realize that a key player—or several—could be persuaded by a different organization that needs their expertise and is prepared to pay top dollar for it. Any of these events could make a company extremely vulnerable.

The senior leadership's approach to safeguarding the company, whether or not you are physically present for its long-term success includes succession planning. It may be intimidating to start the topic, but the sooner you start working on your succession planning, the sooner your company is anchored for the long term.

Consider succession planning as employee grooming insurance for business continuity.

2. Identifies your Most Capable Future Leaders

Formal succession planning starts with the identification of the most critical positions in the company, followed by the identification of employees with the skills and values to fulfill the critical position, and finally understanding the career plans and interests of those employees.

These critical succession planning steps provide a number of advantages. First, a thorough look at your organizational structure will assist your leadership in better understanding any possible weaknesses and also highlight the need for key employees to be cross-trained in specific positions.

On the other hand, if there aren't any internal candidates who seem qualified for leadership positions, you'll know to start looking outside as soon as possible.

Most importantly, succession planning has the advantage of letting ambitious, less experienced internal candidates know that their efforts and abilities have been acknowledged and valued sufficiently to be taken into consideration for promotion. For junior managers and subject matter experts who wish to develop their careers in management, this can be a fantastic retention tool and motivation.

3. Creates Room for Training and Development

Once your company has identified that X, Y, and Z employees are keen on advancing to senior roles, you may spot any skills gap and start preparing them for the eventual succession.

The employee's professional development may involve work shadowing, coaching, mentoring, or a slow but steady increase in more challenging duties. Even returning to school to complete more coursework or obtain a professional certification may be necessary for some employment.

By identifying possible successors early on, you give employees time to acquire the knowledge and expertise they'll need to succeed in their senior positions. Employees are also apprised of your willingness to support both their personal and professional development.

4. Maintains Brand Identity

News of CEOs who enter a company from the outside with great potential only to fail in a short period of time is commonly reported. Sadly, these poor hiring decisions frequently harm the company's reputation and long-term success as well.

This frequently occurs because the outside CEO hasn't, in a sense, "grown up" in the underlying principles and mission of their new organization. They steer the company away from its core brand out of a desire to add their own flair to the enterprise or a failure to comprehend customer needs.

One of succession planning's advantages is that it helps your business prevent this. Your business will be managed by someone who shares its values and has a thorough understanding of the company's brand promise, its customers, and its employees because they have lived it themselves if you identify and promote an internal successor.

5. Gets your future-ready

Changes happen. Your team may make future plans when your business is clear on its direction.

By including succession planning in your company's overall growth strategy, you give retiring employees a way to transfer their years of hard-won expertise and maintain crucial working ties before they depart.

A succession plan's goal is to support the intentional growth of your organization while you detect and prepare for potential weaknesses in other business areas. Additionally, succession planning can assist in identifying the areas that need innovation, defining attainable growth objectives, and preparing for potential future talent requirements.

How can you Implement Succession Planning? - 7 Easy Steps

A succession planning framework can be built in seven easy-to-follow steps.

1. Make a Plan

When a difficult-to-replace team member is leaving the organization, you may be aware of it well in advance — a planned retirement is an excellent example. But other times, an abrupt and possibly confusing staff leaving will take you by surprise. You, therefore, require a plan right now.

First, think about all the important jobs on your team and answer these two queries:

• What effect does X position have on your business or department on a daily basis?
• What would happen to your operations if the individual in X role left?

2. Target high-potential Candidates

Pick team members who might be able to fill such positions once you have a handle on the potential effects of the departure of certain personnel.

Think about this.

• Which employees would be the best candidates to fill X position if you were to make an internal hire?
• Do those applicants require training? If so, what kind, exactly?
  
  Even though the person directly next in the organizational hierarchy may be the apparent choice to fill a position, don't overlook other qualified workers. Look for individuals who, regardless of their current title, exhibit the abilities essential to succeed in higher positions.

3. Talk to those Candidates

Inform each protege that they are being selected for roles with increased responsibility in private meetings. Establish the fact that there are no assurances and that things can alter as a result of difficulties the firm or the succession candidates themselves may face.

4. Focus on Professional Development Efforts

Ideally, you have already made investments in the professional advancement of the people you have chosen to be your successors. Now that preparedness must be intensified, rotating jobs is an excellent method to provide your prospects the chance to learn and grow.

Additionally, linking them with mentors helps strengthen their competencies in the crucial field of soft skills: The most effective leaders have excellent interpersonal skills, including diplomatic and empathetic behavior.

5. Give your succession plan a test run

Never wait until a crisis to determine whether an employee is qualified to fill a more senior position. Have a manager who is on vacation delegate some of their duties to a potential replacement.

The worker will benefit from the opportunity to excel and earn priceless experience. Additionally, you can determine what areas of that person's development and training need to be addressed.

6. Integrate your Succession Plan into your Hiring Strategy

Once you've chosen employees to take over important positions in your company, note any talent gaps that would remain if those employees were to be hired. You can use that to decide where to concentrate your upcoming recruiting efforts.

7. Look for your own Successor

Remember that you will eventually need to fill your own role when creating a succession plan for your company. An exciting opportunity can present itself, or you might opt to put in your time and leave the workforce. Therefore, it's crucial to consider which person might one day fill your position. What can you do right away to assist that person in getting ready for the changeover?

Closing Thoughts

Your team's lineup will inevitably vary because your employees aren't fixed assets. It's possible that you can't always foresee a valuable person leaving the company. Examine your prospects with HireQuotient's skill and video exams to build a qualified pipeline. Using EasySource, a reputable candidate sourcing company that can meet all of your sourcing requirements, you may also include prospects from throughout the nation. But you can create the continuity that is so important for the future of your company through efficient succession planning.

Start succession planning today!