Succession planning: What is it and why is it important?
Table of Contents
- What is succession planning?
- The benefits of succession planning
- Creating an effective succession planning process
- Best practices for a succession planning strategy
Guide to Effective Succession Planning
Staff turnover is inevitable, but succession planning can help you identify, develop, and nurture your team to be ready to fill key positions within your business as soon as vacancies arise.
Download the completeFutureproof your talent pipeline: Your guide to effective succession planning report for more insights and tools to help you attract and retain talent by understanding how to create a succession plan.
Even with a superb employee retention strategy, change is inevitable. Members of your team will progress within your organisation, move departments, or leave for a new opportunity elsewhere. This can be sudden, and has the potential to disrupt projects, strain client relationships, and dampen team morale.
It’s important to be prepared, and this is where succession planning comes in. It’s not ticking a box, or simply anticipating the departure of certain people. It’s about nurturing a talent pipeline within your organisation and taking the time to spot, develop and promote the talent you already have when a new opportunity arises.
With research from Totaljobs revealing that 29% of businesses struggle to recruit as a result of skills shortages, it’s important to remember that the perfect fit is often already within your organisation — they just may need a little support.
In this article, we’ll explore the importance of succession planning and provide practical steps for you to future-proof your people strategy. After all, your next team leader might be sitting right under your nose.
What is succession planning?
Succession planning is the process of identifying and defining key roles for the success of your business, and in turn, finding potential employees who, with support, could potentially fill these roles in future. By proactively developing internal talent, succession planning aims to prepare them for the role and prevent disruptions caused by typical staff turnover and unforeseen departures.
The importance of succession planning
Departures from an organisation are inevitable, but business continues. A well-defined succession plan is therefore essential for minimising disruption when someone leaves your company. Put simply, a trained up, ready and waiting replacement helps to speed up the recruitment process, eases staff concerns, and ensures projects and processes continue to run smoothly. Research from Azets found that nearly a third of UK employers see succession planning as a fundamental part of their business strategy. This comes as almost half (46%) of businesses in the UK are prioritising staff retention and employee engagement, with 37% investing in training to address skills gaps within their organisation. In addition to addressing immediate challenges, effective succession planning also plays a role in fostering a diverse and equitable workplace, by providing the business with greater clarity on the opportunities being made available to individuals from different backgrounds.
The benefits of succession planning
A clear succession plan for the indispensable roles within an organisation can lead to a number of desirable outcomes. Let’s take a look at some of the most significant.
Ensure continuity of leadership
Long-term succession planning for certain roles can protect the organisation, individual teams, and high-value projects during periods of change. It also helps to align training initiatives with the company’s long-term goals and objectives, ensuring that future leaders are equipped with the skills required to drive the business forward.
Promote knowledge sharing
Succession planning can instil a continuous learning culture by encouraging current leaders to pass on their knowledge and skills to the next generation of talent, helping to unlock the potential of employees at all levels.
Improve employee retention
Research from Totaljobs shows that 7 in 10 people have left a job due to a lack of learning and development opportunities, with 9 in 10 people wanting more training from their employer. Offering employees clear pathways for career development can work wonders for improving employee engagement, helping you to retain top talent within the organisation.
Save on recruitment costs
According to the CIPD, almost 6 in 10 businesses (58%) find recruiting for senior or highly skilled positions the most challenging. A planned, consistent investment in internal talent minimises the need for making external hires, saving resources and time associated with the recruitment process.
Improve organisational resilience
Strong talent management with a talent pipeline can equip any organisation to navigate change, and unforeseen challenges, by fostering a culture of resilience and adaptability.
Promote diversity, equity and inclusion
Succession planning can help employers ensure they are identifying and nurturing talent from all walks of life, promoting and safeguarding diversity at all levels.
Create a winning employer brand
A clear commitment to career progression benefits your reputation as an employer, meaning you’re able to attract top talent to all levels of the organisation.
Creating an effective succession planning process
What’s actually involved in succession planning? Follow these steps to create a winning succession planning strategy:
Identify business critical roles
Identify the roles that are essential to your long-term success, and, if unfilled or if poorly recruited, would create a significant challenge to your business. This will be unique to your organisation, but will likely include senior leadership roles such as CEO, CFO, CTO, Head of Sales, Operations Director, General Manager, and so on. There’s no one-size-fits-all approach, and you should consider any emerging skills critical to your industry and any key functions in the business if time and budget allow.
Consider future needs
According to a report from Gartner, a third of HR leaders find it challenging to develop talent for senior management roles, with 45% struggling to train people for mid-management positions. As a result, only half of employees feel prepared to lead their organisation in the future. Being proactive is essential. By anticipating potential skills gaps on the horizon, such as those due to retirement or parental leave, and focusing on areas with higher staff turnover, you can mitigate their impact and ensure continuity in your workforce.
Pinpoint required skills and experience
Identify the specific skills that someone in each role needs to have. It requires a thorough assessment of the technology/systems used, as well as the qualifications, experience, and expertise needed to ensure success in these key positions.
Assess current talent pool
Succession planning hinges on finding the future leaders within your organisation. Take the time to evaluate your workforce, uncovering both technical expertise and leadership skills. Collaborate with line managers to conduct a GAP analysis which pinpoints an individual’s strengths and development areas against the critical skills needed. Incorporate this into ongoing review practices to spot rising stars and potential successors within your own talent pool.
Develop succession candidates
Once you’ve identified your top talent, work closely with them to craft a personalised development plan aligned with their needs and the requirements of potential roles they may fill. This can include:
- 1-2-1 mentoring programmes which pair them with senior leaders who can provide guidance and advice on their leadership development.
- Providing on-site group training sessions or investing in external training opportunities focused on the skills needed for their future success.
- Cross-functional projects which offer exposure to different departments or areas of the business, enabling them to gain new skills and leadership experience.
- Leadership workshops or seminars focused on topics such as communication, decision-making, conflict resolution, and strategic thinking.
Best practices for a succession planning strategy
In addition to the steps outlined above, there are several strategies you can implement to ensure the long-term success of your succession planning.
Plan in advance
Succession planning is vital for any forward-thinking business. So, take time to define the business-critical roles you need succession plans for, perform risk assessments on key employees, and map out various scenarios for your company’s future. For a contingency plan, be thorough when identifying potential internal candidates and make sure you tailor their development plans to the roles you wish them to grow into.
Involve stakeholders
It’s crucial to involve stakeholders throughout the business, including senior leadership, HR, training teams, and line management. This ensures that your succession plans are aligned with the day-to-day experiences of your employees, whether it’s their interactions with their manager or the project teams they’re invited to join.
Communicate transparently
Communication is vital within any organisation, especially when seeking long-term buy-in and engagement. Here are some tips to help you spread the message:
- For candidates earmarked for succession plans: Actively listen to each person’s ambitions and goals to build trust and ensure their commitment to the programme and make their development a regular conversation point with their manager and within performance management. However, be sure to avoid over-promising regarding their progression, making it clear that future promotions are not guaranteed, but that potential opportunities exist. You can also highlight that the skills and experience they gain will benefit them in the future regardless.
- For employees in the wider business: Be sure to communicate the succession planning process openly to the entire organisation –?it’s not an exclusive club. Consider extending the programme, or a simplified version of it, to less business-critical roles if time and budget allow. You can also use this opportunity to promote the learning and development initiatives available to every employee. Position being a ‘future leader’ or ‘high potential employee’ as something for everyone in the company to aspire to, and where able, what they need to achieve to get onto the programme.
Continually review and update
With keen eyes on the future, your strategy for succession planning should be constantly evolving. It’s crucial to stay updated on changes within your organisation, such as growing skills gaps, potential departures, and emerging talent. Conduct quarterly reviews to assess these factors and gather feedback from senior leadership, HR, succession candidates, and the wider business. This ensures that your succession plans remain flexible and aligned with the evolving needs of the business.
Recruiter’s FAQs
What is succession planning and why does my business need it?
Succession planning is the process of identifying key roles within your organisation and developing internal talent to step into them when vacancies arise. It helps you minimise disruption, maintain business continuity, and retain valuable knowledge, especially during periods of change or staff turnover.
How can succession planning improve employee retention?
By offering clear pathways for career progression and investing in employees’ development, succession planning can boost engagement and motivation. When staff see growth opportunities within your company, they’re more likely to stay, reducing turnover and recruitment costs.
Which roles should I include in a succession plan?
Focus on business-critical roles, typically those that, if left unfilled, would have a significant impact. These often include leadership positions such as CEO, CFO, Head of Sales, or Operations Director, but can also include technical or specialist roles unique to your business.
How often should I review my succession plan?
Succession planning should be a continuous process. It’s best to review your plan at least quarterly to reflect any changes in your organisation, such as emerging skills gaps, upcoming departures, or newly identified talent.
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