According to Pew Research, approximately 10,000 baby boomers will retire from the workforce by 2030. This means there will be thousands of projected vacancies to prepare for within the decade, however research finds that only 35% of organizations have formal succession plans in place.
What is succession planning?
Succession planning is the process in which organizations plan for future staffing changes due to anything from promotions, retirement, or turnover and it looks different for every company. Surveys confirm that 89% of succession planning is used to identify and prepare future leaders for critical roles , while 72% of organizations use succession planning to enable internal advancement and enhance business continuity.
Succession comes down to more than just picking a successor. It’s a thorough process that should be reviewed within organizations at least annually, if not more frequently.
Here are 5 steps to guide organizations through their succession planning process.
Step 1: Strategy
The first step of creating an effective succession plan is to establish a strategy. Your strategy should determine how talent selection, development, and implementation will be orchestrated. Before looking at potential candidates, leaders must evaluate what continuity must be seen from those currently holding important positions and those who will be taking on the same responsibilities in the future. Here is where management should decide which roles most critically require a succession plan, then they must pinpoint the qualities, skills, and experience they expect from successors. Lastly, at this stage, a strategy for how these positions will be filled should be determined. Will you use headhunters, accept nominations, or invite employees to volunteer? Once this is established, succession planning can move onto the next stage.
Step 2: Assess Talent
Chosen candidates should be qualified, passionate, and excited about their trajectory. Succession planning depends on HR teams and executives working together to evaluate employees on a regular basis to identify potential successors well in advance of placement in that role. After pinpointing potential candidates, perform a focused assessment of their competencies that will enable their success in a new position. Highlight what credentials or skills may be missing from potential successors and determine how those gaps in knowledge could be closed. This step will essentially help scouters and HR teams understand who in the talent pool is most compatible with the open positions.
Step 3: Inform Candidates
Once you’ve shortlisted a few candidates that show immense potential, privately let them know they’re being considered, so they can understand their path within the organization. Maintaining transparency of succession plans can improve performance across your organization and motivate entire teams to work harder and acquire the qualities of someone who should be promoted to a higher role in the organizational hierarchy. Studies found that 62% of employees would be ‘significantly more engaged’ if they were aware of succession plans at work, while 90% of employees, age 18-34, confirmed that a clear succession plan would improve their level of engagement.
Step 4: Development Plans
No one will be ready to take on a new position immediately upon being selected as a successor. To ensure a seamless transition, development plans tailored to the candidate, current executives, and the role at hand should be leveraged to get successors prepared for their impending position. Development plans should include cross-training with the person who is currently occupying the role, frequent progress evaluations to highlight any areas that need refreshing, as well as meetings with other leaders on the same hierarchal level to build a rapport.
Step 5: Monitor and Evaluate
The final step is not final at all. HR leaders and management should continually monitor employees as they progress through development plans and adjust as needed by seeking input from executives and directors. Flexibility in planning will help shape a well-trained and prepared leader for your business, while simultaneously evolving your succession plan to be more effective for future vacancies and successors going forward.
A good succession plan will benefit the health of an organization, the engagement and loyalty of employees, as well as the culture within the office.