Succession planning is a unique corporate strategy that implies preparing a worker or a team for the leadership positions passed down to them. This is a lengthy yet necessary procedure that might take from one to three years.
Enterprises of any scale can take great advantage of this process. It is crucial to understand the essential professional skills, unique knowledge, etiquette, and specific practices incorporated within a company. Knowing all this information and teaching it to the following generation of workers that will occupy the leading positions is a guarantee that every process in your business will continue to run properly.
Studies show that hiring a new person for an executive position in a company can cost this business more than 200% of the annual wage of this very position. Of course, the number can vary depending on the position as higher ranks can cause bigger losses. However, expenses are always rather high. Without proper preparations, financial losses are not even the worst damages that can happen to a business. Having a vacant spot for a higher executive position or hiring someone just to replace the person for the time being can be extremely damaging to the company’s growth and image.
Because of many unforeseen circumstances on the market and various human factors, the entire organization can experience dramatic changes, which are not good ones. This is why it is essential to plan ahead and secure the company and its shareholders. It is important to discuss all potential challenges and prepare for them in advance. One of the key responsibilities of HR is to manage the succession plan and get ready for it.
As you can see, proper replacement planning is incredibly important. The better you execute this process, the lower the risk of damaging your business will be. Some experts think that for a CEO of a firm to retire, it is essential to start succession planning five years earlier. This might seem a long time, but in reality, there is no such thing as over-preparation when it comes to replacing leading positions. It is also crucial to use all resources wisely when coaching the new employees that will occupy these positions in the future. There is no guessing in deciding on the new chief executives. Every single position and candidate must be evaluated carefully.
The goals of each succession plan are the essential steps needed to ensure that the plan works properly. The main goals include ensuring continuous production, pinpointing the vital positions, developing an understanding of how competent the company is, learning about the potential of an enterprise, developing a powerful pool of employees, etc. Delegating a position to another worker is not an easy task. There should not be an open contest where people compete for the position as this decision must be made after years of careful planning. Here are a few main objectives of succession planning within an enterprise.
Business continuity is crucial for any firm. Whether there is a natural disaster, one of the employees passes away unpredictably, or any other emergency happens, the company must continue operating as intended. This is why guaranteeing continuity is one of the key tasks of any succession plan. Strong guidance and collaboration between workers at all levels are needed to ensure that everyone is looking forward and knows what to do in the future. This way there is a lower possibility of making a grave mistake during difficult times.
Every top-quality succession plan defines the vital position in a company, which is necessary to ensure the efficiency and success of this business. This also includes other employees apart from senior executives. Middle managers and those working with the market, such as salespeople, are also of very high importance. Thanks to replacement planning, enterprises can come up with the specific structure of their company and describe each crucial position in great detail. At the same time, it becomes easier to discover the outdated and dropping job titles in the company.
Competency mapping is one of the most important steps of effective succession planning. This procedure implies discovering the strengths and weaknesses of each employee to have a cohesive picture. This is important for understanding your weaker spots and channeling effort to improve such skills. Knowing the competency of your workers allows planning ahead when it comes to hiring new personnel. This way, you will be able to recruit people that fill in the blanks with their strong sides.
Not every employee is a natural-born leader. Nonetheless, it is possible to improve their skills so they meet the expectations of the company or even exceed them. HR needs to discover all the strong and weak sides of each worker to see their hidden potential and possible talents. Special training can be then held to improve the necessary skills of each worker. Knowing everything about the capabilities and talents of your employees allows hiring new people with the exact skillsets you need.
When companies really invest in their workforce and put a lot of time and money into training and ensuring that each employee is at their best performance and is content with everything, the morale of all workers increases. It has been proven that when a business meets all the expectations of its employees regarding their skills, personal and professional growth, making achievements, etc., their motivation enhances. Succession planning is essential for ensuring your team consists of the right people that fit together perfectly. This is a guarantee of success in the long run.
A lot depends on the people that offer highly specialized knowledge and abilities for the firm. It is always expensive and difficult to replace them, but it is better to think about the future and always have a backup plan. If an employee leaves or something happens, it will take a lot of time and money to train a new worker for this position. With succession planning, it becomes a lot easier to handle a sudden vacant position with such crucial and unique skills.
Whether your organization is big or small, there is a set of factors that you should take into consideration when you are coming up with a replacement plan for your business. Here is what you should keep in mind when planning.
Much like any other HR program, succession planning cannot happen out of nothing. It needs a powerful base to work. Every step of the process creates a necessary base for the future succession plan. For instance, positions in the company can be created keeping in mind already existing skillsets in the workforce. This way, it will become possible to hire professionals with complementary skills. The organizational structure of your business can be open to enable multifunctional learning among staff members. It is also great to have candidates with skills that go outside their specific position as this opens more possibilities.
When working on a replacement plan, you can go two different routes. These routes imply focusing either on a position or on an employee. However, focusing on both things at the same time will guarantee that you achieve the main goal of a succession plan, which is holding skillful employees in the pipeline. In some cases, the talent you need can be found in the role of a specific worker that has a diverse skill set and will come in handy for a range of jobs. In other cases, it is a specific position beneficial for raising a multitalented employee with unique skills. In both scenarios, it is necessary to choose a certain person. When picking a worker, make sure that they:
Discovering the perfect jobs for a succession plan requires a unique vision, and this process is very specific, depending on the company. Luckily, there is a list of positions that will most likely be very useful:
By preparing thoroughly before this stage, you can achieve better results in the end.
The success of the entire succession plan depends heavily on the team working on it. To coordinate the program properly, it is important to know about job designing and performance management, implement various pieces of training and initiatives for improving skills, work on internship programs, etc. It is crucial to cultivate certain traits in your organization. If the team is receptive to change and growth, you will have higher success rates.
With career development, it is necessary to match active employees with a range of jobs. To achieve this goal, it is required to correspond the skills and talents with respective objectives. Thanks to analyzing each position to determine the necessary skillset, knowledge, and capabilities, it becomes possible to continue with the succession plan mindfully. Determining the necessary and complementary skills helps with switching positions seamlessly. This also allows for creating new jobs, defining the required performance within each position, and training the candidates with future growth in mind. Keep in mind that succession planning is not the same as professional training. When working with a succession plan, it is necessary to prepare an employee to occupy one of many potential positions by cultivating a set of diverse skills. Whereas preparing for a certain career implies working towards a specific position and only acquiring and improving the respective skills.
To create a succession plan properly, it is necessary to be familiar with the concept of job designing. If the program manager understands the specific qualities of each position, it becomes possible to evaluate the success of each employee in their position and predict the potential success with another job. It also becomes possible to evaluate each worker’s potential in relation to a job based on their preferences.
To know whether your replacement planning is working effectively and as intended, you need to have certain metrics to evaluate it. You should specify beforehand the goals and features of a successful program. It is also worth discovering certain metrics to scale employees’ satisfaction with the process and the manager’s satisfaction with workers. With proper scaling, you should be able to evaluate each task and see how close it is to completion.
It is vital to scheme everything in advance when it comes to succession planning. This way, it is more likely that everyone will transition as intended. Both employees and project managers will be able to get used to working alongside each other and create a unique working pattern. Investing in staff and their development is key to improving the company in general. Sharing experience is also a huge part of this process.
In larger businesses where many different departments work together and there are even offices in various countries, it is particularly crucial to keep track of all documentation regarding succession planning. However, it becomes rather challenging to do so. In any case, managing all the documentation is a necessity, and the following processes can be incorporated:
As soon as you gather enough data about your project, you can opt for creating software or an application that will automate the process of aligning the information about your replacement plan and the existing HR data. This way, you will even be able to generate new data for efficient succession planning. However, the quality of information generated with such software heavily depends on the quality of the information you inserted in the first place. This is why you should gather the preliminary information thoroughly as it will help you in the long run.
One of the most prominent questions when it comes to succession planning is what the advantages of this process are and why it is so important for any business. It is rather difficult to understand for many people. A replacement plan needs to be an integral part of any enterprise and its philosophy as it opens new horizons and creates an infinite potential for future growth. This is a list of the top pros of succession planning for firms.
A strong succession plan supports and values the vision of a company and guarantees that entrepreneurs and administrative positions are aware of the direction the company is going. It is crucial to maintain the enterprise values for the board of directors. There is a unique culture within each company, which must be preserved. Thanks to a thoroughly designed and implemented succession plan, every staff member and even management representative will be confident in new executive positions and the way they handle the company.
With replacement planning, the skills and strengths of certain employees with huge potential become evident. The workers with the highest potential among other employees demonstrate great skill sets for their actual positions and tend to occupy more important and demanding positions in the future. When you are aware of the chance that your employee can be ready for occupying a critical position in the company, you also become ready to face any challenges in the future. This is a huge advantage for businesses.
An important benefit of succession planning is providing employees with powerful motivation. Only when workers realize how important and valuable they are to their firm, they do receive the motivation needed to work and excel in their tasks. This increases the retention rate and the satisfaction of all employees. Another huge advantage of such planning is that more reliable and professional job candidates are attracted.
The competitive landscape is quickly evolving, and only with an efficient succession plan will you be able to deal with any disruptions smoothly. Each company needs a leader that will face the risks masterfully and support the reputation of the business in the long run. This way, they will be able to concentrate on the best opportunities for the business in the future.
All current employees, unlike newcomers, are familiar with the workflow and the culture within the firm. This way, they will be more immune to change and will be able to take the leadership into their hands smoothly.
While designing a succession plan requires investments and time that can last for years, it is still less expensive and more beneficial to have a pipeline of perfect candidates in advance. When a company faces the need to find a person for a vacant executive position quickly, there are a lot of expenses in recruiting and training the new workforce. It is less costly and much more efficient to have a few potential candidates ready to be able to start working on their new position as soon as possible.
Some companies operate under a strict succession plan, although many businesses do not have one clear strategy still. People might be reluctant to start succession planning because they fear the challenges that might come with it. However, the disadvantages of working without such a plan are drastic. Here are some main cons of not having a succession plan.
Without succession planning, both the business and its owners will face a variety of risks. In case an executive role in a business remains vacant for a long time, the damages to the company might be tragic.
Building strong relations among employees is essential. Neglecting workers with great potential and promoting people that would have been better working at other positions can result in dissatisfaction and distrust among staff members. People are loyal when all their needs are met and potential can be cultivated properly.
More than 35% of workers leave the company within a year from the beginning of their work. However, in many cases, this issue could be prevented. To retain numerous employees, it is necessary to offer the chance to grow and improve as a professional. One of the key objectives of succession planning is investing in workers to improve their skills and unleash hidden potential.
Creating a succession plan is not just a formality. This should be a core objective for any business. The culture of succession in businesses allows them to function properly and grow all the time. Only when looking into the future and preparing for what is to come, a company can expect to be successful and competitive.