You have built significant tribal knowledge, skills and assets in your business. How do you ensure you pass them onto the next generation of talent? Succession planning is a critical strategy in any business or industry to secure the continuation of the culture, brand, and skillsets.
The scope of HR roles and responsibilities includes creating and implementing a succession plan. Succession planning in hr is a focused process for retaining talent and has tremendous benefits for retention, workplace culture and employee engagement. The most successful businesses have in place an effective succession plan to identify and develop future leaders.
What is Succession Planning?
Succession planning is a strategy in which organisations identify critical positions and prepare employees to move into these roles. Through this strategy, hr professionals and managers identify and develop future leaders at the executive level and significant roles in all other departments. This process ensures that individuals are prepared and ready to take over critical positions as employees leave or retire from the organisation. Succession planning guarantees the successful continuity of businesses.
Why Succession Planning is Important
Succession planning is important for several reasons, including mitigating the risk of sudden leadership changes and ensuring business continuity. When key positions remain unfilled for any length of time, businesses may be unable to reach important decisions and critical activities delayed. Business leaders need to guarantee the necessary talent is in place to fill gaps through involuntary and voluntary turnover. The succession planning process is vital to ensure that the identified talent has the required knowledge, experience, and leadership skills to take over the business role seamlessly. Succession planning means businesses can continue to implement strategies with little to no delay and ensure the survivability of the culture and organisational memory.
How Does Succession Planning Benefit the Organisation?
An effective succession plan has several benefits for an organisation. The primary advantage is that the right people are selected and developed into leadership positions. Managers can make or break team and workplace performance, so it's vital to have the right people in place at the right time for overall business success. It's much easier to hire internally than go through an entire recruitment process for a pivotal business position.
In addition to filling leadership positions, other benefits of succession planning are:
- Business direction and continuity
- Increased retention of top talent
- Retention of organisation (tribal) knowledge
- Lower hiring costs as it is more cost-effective to develop current employees than hire for new ones
- Stronger internal hires
- Improve career development
- Increased employee engagement
- Workforce stability
Tools for Succession Planning
A succession planning tool is human resource (HR) software that allows companies to identify future leaders. The use of a succession tool ensures business continuity and workforce stability. Some of the best tools for succession planning include:
- DISC Leadership Assessment
- Cognitive Ability Test
- 360 Feedback
- Succession Planning Software and Dashboards
DISC Leadership Assessment: A DISC leadership assessment tool will add significant value to an effective succession plan by identifying future talent and informing leadership development strategies. A DISC leadership profile will help determine the natural leadership style of your potential future leaders. Using a DISC leadership assessment, you can analyse which leadership competencies will come naturally to the future leader, requiring little energy or effort. You can also explore which competencies require more energy and concentration and require additional training and development support.
Cognitive Ability Test: A cognitive ability test evaluates a person's current capability level and ability to learn, solve problems and process information on the job. A cognitive reasoning test is a powerful predictor of job performance across every job level from entry to c-suite. A cognitive ability test is an essential tool for succession planning as any employee you are developing into a leadership role needs to learn new skills and be adaptable.
360 Feedback: Stakeholder perspectives are vital to capture when succession planning. Stakeholders, such as managers, peers and direct reports, will regularly interact with the potential leader. Therefore, seeking feedback from multiple stakeholders will help inform decisions regarding potential leaders and their readiness to take on a leadership role. One of the most effective tools to gather this information is a 360 feedback tool. A 360 assessment tool allows for multi-rater feedback and puts it into an easy-to-interpret report. Leveraging the feedback from a 360-degree assessment will help determine whether the individual demonstrates leadership qualities or needs further support or development.
Succession Planning Software: Succession planning software will help your HR team determine critical roles, identify top performers and track the progress of development plans. Using succession planning software, you can align employee aspirations to current and future business needs and visualise pathways to help you put the right people in the right roles.
How to Implement Succession Planning?
To implement succession planning in your organisation, you will need to consider several factors including, preparation, planning and development. Succession plans can take months to years, and as a critical business strategy, organisations need to implement them effectively. A succession planning model typically follows five steps:
- Identify Key Positions and Needs
- Develop Job Profiles
- Review Talent Pipeline
- Establish a Development Plan
- Transition the Role
Step One: Identify Key Positions and Needs
The first step in the succession plan is to identify the positions essential to the business's success. These could be positions already established and include new roles critical to future growth. If left vacant, these roles would affect the stability and continuity of your company. Look at your business's organisational charts to help inform these critical positions. In this first step, you also need to identify the needs of these roles, such as experience, skills, and characteristics.
Step Two: Develop Job Profiles
Once you have fleshed out the key positions and needs, use this information to inform your job profiles. The job profile should include the primary tasks, required qualifications, responsibilities, knowledge, skills, and abilities. A great way to establish a job profile is to assess current leaders and create a performance benchmark.
Step Three: Review Talent Pipeline
In step three, you need to review your talent pipeline and identify potential future leaders. This step is where you can bring in succession planning tools. These tools are helpful to assess leadership potential. If you do not have the necessary talent in your organisation, think about implementing an employee referral program or other recruitment initiatives to recruit top talent.
Step Four: Establish a Development Plan
Once you have identified top talent and appointed a successor, you need to design and implement a development plan. This development plan ensures your candidate has the necessary knowledge and skills for success in the role.
Step Five: Transition the Role
An effective succession planning model will include the person leaving the role. They will have the most involvement during the handover process, where the successor learns the new tasks and job scope from the future co-workers and outgoing employees.
Why Succession Planning Fails
Succession planning can seem overwhelming, and unfortunately, many organisations don't prioritise succession planning. Instead, they focus on how to grow their business rather than their people. Below are some of the top reasons why succession planning fails:
- Concentrating only on executive-level positions
- Roles are not well defined
- Keeping the succession plan a secret
- Relying on only one successor per role
- Lack of talent in the talent pool
- The succession plan is not connected to a development plan