Succession planning is a process for identifying and developing internal people with the potential to fill key business leadership positions in the company.
Is a process for identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions, either in the short- or the long-term.
It can also be defined as a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company.
Effective, proactive succession planning leaves your organization well prepared for expansion, the loss of a key employee, filling a new, needed job, employee promotions, and organizational redesign for opportunities.
Successful succession planning builds bench strength.
To develop the employees you need for your succession plan, you use such practices as lateral moves, assignment to special projects, team leadership roles, and both internal and external training and development opportunities.
Companies that hire “superstar” CEOs from outside the company consistently underperform companies that develop their talent and promote leaders from within.
Levels of Succession Planning
There are three levels of succession planning which include the following:
1. Designated Replacement.
2. Situational Replacement.
3. Target Date Replacement.
1. Designated Replacement.
Designated replacement succession planning can be part of a small-business owner’s exit strategy or a form of continuity insurance for a larger business. Sometimes called “name in the envelope” succession planning, this type focuses on designating a replacement for the owner, CEO or other senior manager. A designated replacement is someone already qualified and trained, able to step in and immediately fill the role if, for example, the business owner passes away or is temporarily or permanently incapacitated.
2. Target Date Replacement.
The second type of succession planning is similar to designated replacement planning except that plans most often designate more than one employee and don’t require the employees to already be trained. Target date succession planning is used when the business knows far in advance when a key staff member will be leaving the company, usually due to retirement. This allows the business to follow a more orderly process in identifying potential replacements and following them through the training process. As the target date draws closer, the candidate field continually narrows until a single candidate becomes a designated replacement.
3. Situational Replacement.
Situational succession plans center on uncertainty, an expected or sudden departure or a deteriorating situation. In contrast to designated and target types that create succession plans to fill a specific role, situational replacement planning isn’t role-specific. Instead, it involves conducting a needs assessment and creating a pool of candidates with varying qualifications, each of whom have the potential to move into one or more roles. Skill surveys, performance reviews and tracking the results of internal and external training programs are commonly used to identify potential pool candidates. Situation succession planning saves both time and money, as hiring from within often shortens the hiring timeline and is less costly than recruiting candidates externally.
Succession planning process.
Through your succession planning process, you recruit superior employees, develop their knowledge, skills, and abilities, and prepare them for advancement or promotion into ever more challenging roles.
Actively pursuing succession planning ensures that employees are constantly developed to fill each needed role. As your organization expands, loses key employees, provides promotional opportunities, and increases sales, your succession planning guarantees that you have employees on hand ready and waiting to fill new roles. Through your succession planning process, you also retain superior employees because they appreciate the time, attention, and development that you are investing in them. Employees are motivated and engaged when they can see a career path for their continued growth and development. To effectively do succession planning in your organization, you must identify the organization’s long term goals. You must hire superior staff. You need to identify and understand the developmental needs of your employees.
You must ensure that all key employees understand their career paths and the roles they are being developed to fill. You need to focus resources on key employee retention. You need to be aware of employment trends in your area to know the roles you will have a difficult time filling externally It is important to acknowledge that succession planning will vary slightly between organizations. Different resources, different organizational designs and different attitudes all mean that succession planning should be flexible and adaptable in order to accommodate varying needs and achieve business continuity. However, there is a general frame work that departments can us as the basis and guide for their succession planning activities. This framework involves:
Step 1: Identify critical positions
Critical positions are the focus of succession planning efforts. Without these roles, the department or agency would be unable to effectively meet its business objectives. Workforce projection data or demographic analysis is essential in identifying risk areas. A risk assessment may also be conducted and compared to current and future vacancies to identify critical positions within your organization.
Step 2: Identify competencies
A clear understanding of capabilities needed for successful performance in key areas and critical positions is essential for guiding learning and development plans, setting clear performance expectations, and for assessing performance. By completing the process of competency or position profiling within your organization, current and future employees gain an understanding of the key responsibilities of the position including the qualifications and behavioral and technical competencies required to perform them successfully.
Step 3: Identify succession management strategies
Now that critical positions have been identified and have been profiled for competencies, the next step is to choose from a menu of several human resource strategies, including developing internal talent pools, on boarding and recruitment to address succession planning.
Step 4: Document and implement succession plans
Once strategies have been identified; the next step is to document the strategies in an action plan. The Succession Planning: Action Plan provides a mechanism for clearly defining timelines and roles and responsibilities.
Step 5: Evaluate Effectiveness.
To ensure that the department or agency’s succession planning efforts are successful, it is important to systematically monitor workforce data, evaluate activities and make necessary adjustments.
Importance of succession planning to organizations.
The benefits of good succession planning include:
1. Succession planning is a means of ensuring the organization is prepared with a plan to support service continuity when the executive director, senior managers or key people leave. 2. Ensures continuing supply of qualified, motivated people, who are prepared to take over when current senior staff and other key employees leave the organization. 3. Promotes alignment between organization’s vision and human resources that demonstrates an understanding of the need to have appropriate staffing to achieve strategic plans. 4. A commitment to developing career paths for employees which will facilitate organization’s ability to recruit and retain top-performing employees and volunteers. 5. The organization gains external reputation for investing its people and provides opportunities and support for advancement. 6. It sends a message to employees that they are valuable.
Challenges to effective succession planning
The absence of a succession plan can undermine an organization’s effectiveness and its sustainability. Without a succession planning process, an organization may not have a means of ensuring that the programs and services that are crucial to its operation are sustained beyond the tenure of the individual currently responsible for them. The challenges to effective succession planning include
1. Size of the organization: some nonprofits have so few positions that they may not have the ability to offer opportunities for advancement; employees with the potential and the desire to advance their careers may move to larger organizations as a result 2. Lack of financial resources: employees may leave for better salaries and benefits offered in other workplaces 3. The nature of funding: as more and more organizations depend on project funding as opposed to core funding, there are fewer core staff members available to take up positions in the organizations 4. Project staffs come and go and may not be seen to be part of the talent pool available to organizations.
5. In some cases, senior leaders are staying on in their positions, despite the fact that the skills needed for the job may have changed or they are no longer making a meaningful and productive contribution to the organization. 6. Indiscriminate inclusion of employees in the succession plan including those who are disinterested, unmotivated or lack capacity to advance. 7. Inadequate training and development resulting in an employee who is not prepared for a promotion. 8. A plan that does not promote people in a timely fashion, leading potential successors to leave the organization to seek new opportunities. 9. Poor communication results to confusion and turmoil within the organization as staff speculate about what the succession plan really is. 10. Potential candidates for promotion cannot be guaranteed that they will be promoted; a lot depends on timing and need of the organization.
1. www.cipd.co.uk/succession planning.
2. www.gnb.ca/succession planning and management guide.
3. www.eonetwork.org/top-five-succession planning.