Succession planning is a critical component of effective HR planning and management and one of the most important steps to ensuring an organization’s long-term health and vitality. However, it’s also an issue that very few organizations, regardless of size or resources, manage to address in a systematic way that feels both productive and relevant. Read on to learn more about the essentials of succession planning, and why it’s a vital undertaking for any company.
What is succession planning?
Much as organizations might wish otherwise, staff will not remain with the same company indefinitely. Succession planning acknowledges this by providing a clear plan and a set process for how to handle the changes that will be triggered by key staff members leaving the organization. The majority of succession plans tend to focus on the most senior manager, such as the CEO or executive director, but a good succession plan should include all key positions. Note that “key” does not necessarily mean “senior;” rather, it refers to those positions that are essential to the effective operation of the company, and that will be difficult to replace due to skill, experience, or other factors.
In general, a best practice of succession planning is to nurture and develop employees from within the organization whenever possible; this helps maintain continuity for other staff and preserves institutional knowledge. When particular employees are identified as having the necessary skills, experience, knowledge, and desire, they can be groomed for an eventual move up to fill specific positions. To accomplish this, organizations should use their strategic plan, goals, and objectives to assess their current and future needs; match these to the capabilities of existing staff, when possible; and develop a plan to address the vacancies that will arise when key individuals leave the organization or are promoted.
What are the benefits of succession planning?
Thorough and effective succession planning offers an organization many benefits, including:
- A sense of assurance about the continuity of an organization’s operations or services in the event that key people leave, particularly if those departures are unplanned or unexpected. The plan can help reduce the stress, time, and effort associated with filling these vacant positions.
- A consistent supply of—or at least an identification process for—qualified and motivated employees who will be ready to step into key staff positions.
- A proper sense of alignment between an organization’s vision, mission, and its human resources, as well as the recognition that appropriate staffing is a key component of achieving strategic plans.
- A commitment to furthering the careers of employees, which in turn will help in recruiting and retaining high-performing staff.
- A positive external reputation as a company and employer that is invested in its people, and that provides opportunities and support for their advancement.
- A demonstration to clients, suppliers, and other stakeholders that the organization is committed to stable, regular operations at all times, even during times of transition.
- A message to current staff that they are valued.
With no succession plan, a company can quickly find its effectiveness and sustainability undermined, as there may be no other means in place to ensure that crucial operations continue beyond the tenure of the person currently responsible for them.
Why should organizations be especially concerned with succession planning now?
While succession planning is something that companies should always be thinking about, it’s becoming an even more important HR concern given the quickly changing realities of today’s workplaces. A variety of different issues are currently at play which could leave organizations scrambling to keep up with a changing workforce. These include the following:
- Simultaneous key vacancies are occurring in numerous organizations and companies, with statistically fewer available people to fill them.
- Baby Boomers are retiring in greater numbers, and this is occurring just as the economy is beginning to grow again and the demand for senior management expertise is increasing.
- Past generations have seen the entry of various groups of people into the workforce—such as Baby Boomers, women, and significant waves of immigrants. These groups greatly increased the pool of available talent and labor. However, no such group is on the horizon at present.
- The significant organizational restructuring that many companies underwent during the 1980s and 1990s resulted in the elimination of many middle manager positions. Consequently, that group is no longer available as a possible source to fill new vacancies at the senior management level.
- Similarly, a lack of middle management expertise in many companies has resulted in inadequate mentoring and coaching of new or younger employees. This means that many younger managers who would be interested in moving up within their organizations are less able to do so, because they are less equipped in terms of skills, experience, and institutional knowledge.