Succession planning should be an essential business practice that integrates related areas such as performance management, business continuity, talent management and organizational culture.
A Society for Human Resource Management global survey of business executives wanted to know their largest challenges regarding people through 2020. Their two greatest concerns:
Attracting the best people to the organization – strong recruitment strategies required.
Retaining and rewarding the best people – a hot issue regarding rewards, engagement, development, involvement, etc.
If identifying and retaining talent is a high priority, succession planning has a major role in retaining people who can help ensure the continuity of the enterprise.
As we all know, things happen that we can’t foresee. People unexpectedly retire, change jobs or experience illness, and these events can leave a company vulnerable unless existing plans are in place to fill these voids.
Hiring from the outside is always a possible solution and may be part of a succession plan, but searching for the right talent this way can be costly and may take months. Knowing that you already have qualified people on board can go a long way in easing these transitions.
Culturally, it sends a powerful message that the company looks inward when developing and promoting talent.
A good succession plan evaluates key leadership and other essential positions to determine if there are employees who may be able to step up and assume these roles.
Participants in the succession planning exercise usually include senior leaders, human resources and, if applicable, board members.
Typically, for each position a list of potential candidates, or successors, is identified. The people are rated as ready now or needs development.
If someone needs improvement, a plan is developed to address the shortcomings so that he or she can become ready now. The plan may include educational experience, technical education, leadership development or broadened job exposure.
For some people identified as having potential to be a successor for a key position, the path to become ready now may take years to reach that goal.
From a talent management standpoint, you are demonstrating the company finds it important to invest in its people.
From a performance management and compensation standpoint, there is a growing movement to have more compensation dollars for top performers.
It’s a given that those recognized as being part of a succession plan are going to be top performers and as such are well compensated.
One of the most important factors to consider is that succession planning is not one and done. Succession plans are reviewed at the minimum annually to assess emerging talent and to evaluate those already on the plan.
Starting and developing a succession plan can ease anxiety of what to do if a company loses key people.
It can also infuse energy by exposing leaders to people they may not have regular interaction with and seeing where pockets of talent reside.
Marianne Chester is founder and CEO of mEnterprise Solutions LLC, a strategic services consultancy based in Stroudsburg. She can be reached at 570-460-9599 or email@example.com.