Should succession planning be a priority for your company?
Succession planning is possibly one of the most misunderstood functions of business planning. It can also be one of the most powerful tools at your disposal to attract and retain the best people.
Succession planning provides less visible benefits, such as the retention of valuable institutional memory, which can be lost when your best people leave, looking for greener pastures. The best employers understand the practical benefits of building the best management teams from within their own organizations, using Succession Planning in the process. With such clear benefits, the question needs to be asked ‘why is succession planning overlooked by so many organizations?
What is succession plan?
To answer this question, we need to first clarify what succession planning is. Succession Planning is defined as ‘the identification of job vacancies that can be expected to occur through retirement or attrition, and the strategic consideration of where and how internal candidates might fill those vacancies.’ In other words, it is the process of identifying and developing current employees for future leadership roles.
‘What impact does Succession Planning have on our HR strategy?’
An example of how Succession Planning can work is as follows: The Succession Plan begins with a review of an organizations current talent pool. Once the organization has built a comprehensive understanding of their peoples’ capabilities and aspirations, training plans are implemented to bridge gaps in skill set that are uncovered through these reviews. As employees complete these training programs and accumulate positive annual reviews, they are considered as a part of the talent pool that will be eligible for a managerial position when current managers are promoted or move on.
This example demonstrates how your HR strategy can move from focusing on external talent pools with limited transparency, to internal ‘known’ talent pools.
Exactly how vital is Succession Planning?
Here are a few stats from a recent employee survey that highlight exact how important Succession Planning is in the minds of employee.
62% of employees surveyed say they would be ‘significantly more engaged’ at work if their company had a succession plan. From the same survey, 94% of employers surveyed report that having a succession plan positively impacts their employees’ engagement levels. It was also found that over 90% of younger workers (age 18 to 34) say that working at a company with a clear succession plan would ‘improve’ their level of engagement. Seventy-nine percent of employers surveyed note they have succession plans in place for mid-level manager positions. These figures should give every manager pause for thought.
‘How qualified are we to implement our own Succession Plan?’
Succession planning is far from simple. Companies must track employee performance, training and development, ensuring that potential candidates for leadership roles have the necessary skills and competencies. Many organizations that implement succession plans primarily focus on executive positions, however this approach is short sighted. An effective Succession Plan extends beyond executive level to all roles that have high impact on an organizations success.
As it stands today, you may benefit from assistance identifying the needs of a Succession Plan for your business, which is why you would engage an organization like DST people to guide you through the process. If you would like to know more about the process used by DST people to help you develop and implement Succession Planning, click on the link below to learn more.