What is succession planning?
Succession planning is the process of strategically replacing critical company roles internally with other equipped employees (should those roles become vacant). It includes identifying positions crucial to business success, finding current employees with the required skills, and preparing them to meet those skills and needs in the future.
Companies use succession planning software to automate creating these plans. Succession planning tools help find and track employees for specific company roles or promotions, create professional development plans, gather business intelligence, evaluate performance, and identify employee leadership potential. Businesses can further integrate performance management systems to examine “who” has “what” to be part of their succession plan.
Business succession planning includes several examples, such as leadership development, mentorship, performance management, education, training, recruitment, job design, and more. These processes support efforts to nurture talented employees and equip them with the knowledge needed to succeed in a company.
Why is succession planning important?
Succession planning enables companies to keep a close eye on current and future goals, invest in internal career development and make backup plans. It’s a must for any company looking to optimize its talent management process.
Succession planning aims to ensure the right people are in the right place. This includes identifying the key positions, those who can fill them, and the resources needed to prepare them. At the end of the process, companies are fully equipped to take on any changes and ensure leadership is always set up for success.
Elements of a succession plan
No matter how a company approaches its succession planning model, it includes the elements below. A succession planning template can be used to organize this information.
- Goals: The end objectives that determine succession planning’s success
- Requirements: A list of tasks to reach these goals
- Timeline: A time management plan to ensure ample attention for preparing and executing a succession plan
- Budget: The resources needed to carry out the plan. This may include the cost of training, seminars, recruitment, and any other employee development investments
- Strategy: The final strategic objectives that outline how a company will approach succession and measure success
- Procedures: A step-by-step plan of action
Types of succession planning
There are four major types of succession planning systems. They pinpoint different scenarios in which succession planning could help keep a business running. Most companies use all these types to adapt to different situations.
- Proactive planning is the most common type of succession planning. It focuses on the long-term for almost every key position in a company.
- Emergency planning is a backup plan for unexpected changes in an organization. This helps prepare for unexpected departures from resignations, terminations, or illness. Emergency planning involves taking temporary measures to keep things going while a transition team begins planning new and concrete procedures.
- Ongoing leadership planning focuses more on succession planning for the top positions in a company. It requires a comprehensive understanding of the skills and abilities needed to fulfill these important roles and the future of company leadership.
- Anticipated departure planning is a unique opportunity for a departing employee to be part of their succession planning transitionary team. This requires the employee to work with the company to create a solid knowledge transfer repository and choose a suitable replacement.
Benefits of a strong succession plan
A strong succession plan offers many benefits. These advantages highlight succession planning’s ability to create an environment that promotes internal growth and keeps things running.
- Protect the company. The last thing a business needs is to be left high and dry after resignations. Succession planning restores a company’s balance with forecasts on employee attrition and timely preparation.
- Identify company weaknesses. While succession planning, companies conduct comprehensive performance and success analyses. Businesses can use the findings to identify and address issues outside of their succession plans throughout the process.
- Use knowledge transfer. Succession planning allows companies to leverage their existing resources before they’re gone. Integrating current roles in the succession plan helps consolidate the knowledge passed on.
- Develop a strong training plan. When businesses entrust their employees with their success, they ensure employees can assume the expected responsibility. This is why solid training plans are necessary from the beginning of an employee’s role.
- Promote internal professional growth. Employees need to know if they have a future in a company. Succession planning shows them exactly what that future might look like, outlining a company's concrete plans to help them grow internally.
- Maintain brand reputation. Someone who already knows a company’s values will work harder to protect them. Nurturing a current employee to take on other roles in the future preserves brand image.
- Always have experienced leaders. A company’s performance is only as good as those steering the ship. Succession planning ensures that those in critical roles are prepped for the tasks at hand and achieve business goals.
- Save money. Companies can save quite a bit with succession planning. They can cut costs usually spent on external candidate search by investing in their internal talent.
Succession planning process
A succession planning framework starts with looking inward and ends with a robust plan for future positions. When conducted successfully, companies build a strong internal talent pool ready to fill critical roles.
- Recognize business challenges and goals. This step shows major pain points within a company and where/who drives overall success.
- Determine the critical roles. After internal analysis, companies should identify the roles necessary for business success. These are the roles that need succession plans.
- Identify the skills required. To determine what’s needed to fulfill a role in the future, companies must identify what makes that role successful. These skills and abilities guide them to choose the right replacement.
- Evaluate current employees. After determining the required skills and abilities, organizations can begin assessing the employees with the potential to fill the roles. This includes evaluating employees who are ready to take on the role and those who need more professional development and training.
- Assemble a pool of talented employees. Companies need to determine certain employees equipped enough to step up into crucial roles and build a talent pool.
- Start professional development. At this stage, companies should begin prepping employees by investing in their professional growth. This includes paying for skill-building classes, hosting informational seminars, and building a career plan with an employee.
- Create a transition team. A succession team consists of employees responsible for every small aspect of a succession plan. Their goal is to ensure suitable replacements and a smooth overall transition.
Succession planning best practices
Companies need to keep a few things in mind as they work through succession planning. These best practices are tips for optimizing different succession plans.
- Prioritize the key positions. Succession planning should start with the most critical roles and work its way down as needed.
- Apply business forecasting. Predicting the future isn’t easy. With business forecasting, companies can analyze historical data to determine their long-term needs. The more concrete the forecasts, the easier it is to develop a succession plan.
- Keep communication open. Companies shouldn’t be afraid to share their plans with their employees. These plans demonstrate that the business prioritizes employee success and plans for their growth.
- Understand employee goals. When creating succession plans, companies should know what their employees want for their own future. The last thing a business wants is to invest time into growing an employee who doesn’t see themselves with the company long-term.
- Create development plans and stick to them. The worst thing a company can do is make empty promises. It should build a professional growth plan that strengthens employees’ skills and fulfill those expectations.
- Get support from decision-makers. A succession plan should take into account the opinions of all those involved and affected.
- Review talent regularly. Succession planning never truly ends. As employees are promoted, new candidates are onboarded. Companies should take the time to review their current choices for succession planning, determine if they’re on the right track, and consider new hires with the potential to grow within the organization.
