Effective succession planning is necessary to prepare for every possible business outcome. However, it is a tight rope to cross. On the one hand, you need to beef up your pipeline for the sake of continuity if someone were to leave, but on the other hand, you don’t want good employees to leave because they’re not yet getting promoted into those positions.
While HR professionals and company executives strive for high retention, there’s a certain level of attrition that’s actually healthy. Sometimes top performers hit their ceiling in a certain position, other employees leave for personal reasons, and more will leave for different challenges or because they’re looking for different things. This isn’t necessarily bad. A certain level of employee rotation continues to bring top talent into the org and develops them into subject matter experts and leaders.
Many CEOs still worry about their bench strength and where they would find replacements for top talent that leaves the company. If we think about this in terms of sports of acting, even NFL teams have second or third-string quarterbacks ready to go in case the QB gets injured, or a lead actor’s understudy has memorized their lines in case they need to fill in for a string of shows due to illness.
Succession planning provides a myriad of benefits to both the company and the employee. These include:
- Motivating employees by creating growth opportunities
- Identifying skill gaps and talent development needs
- Adapting the organization to demographic and talent changes
- Transitioning highly specialized skills into key roles
- Preserving institutional knowledge
How then, do we balance this need for retention and healthy attrition while planning for the future? Efficient succession planning has a few key elements to keep in mind:
1. Take a comprehensive view of internal talent
First things first, you need to know what your talent bench looks like. Comprehensive reviews of internal talent are necessary to fully understand opportunities and gaps in your current workforce. This process also highlights which roles need a succession plan. Often, companies only have plans for top-level executives, but this is a short-sighted view that can leave gaps in other areas of the org. Of course, there might be areas where you need to recruit for external talent, but having a comprehensive view will also help you determine how to best develop a recruiting pipeline for those roles.
2. Develop plans, but focus on execution
Once you have a clear picture of what roles need succession planning, opportunities, and gaps, you can begin to align the planning process with business goals and values. When developing succession plans, it’s critical to move beyond planning and actually offer targeted development opportunities. Many times, succession planning looks great on paper, but planning is just that, planning. Candidates for growth need opportunities to put in the legwork to develop the skill sets they need once they advance.
3. Tell the successor
According to this Software Advice survey, 62% of employees surveyed say they would be “significantly more engaged” at work if their company had a succession plan. Companies that don’t communicate their succession plans risk running into a situation where the employee in question submits their notice without having any idea of what the company had planned for them. By that time, it’s usually too late to re-engage them, and the process starts from scratch, wasting time, energy, and resources. If employees are not informed about growth opportunities, they’re likely to look outside the company to find them.
4. Regularly review the succession plan
Succession plans are not one-off documents created to live in a vault until it’s time to pull them out. They should be living documents that regularly re-assess the business situation and the skillsets of the individuals in question. For example, if your SVP of Strategy suddenly takes on a new project that stretches their own skill sets, their successor should also have some exposure to it if that’s not already in their toolbox. These documents can be updated with current and future projects, feedback from peers and performance reviews, and other key points of development. A six-month review cadence doesn’t add unreasonable work to the C-suite and HR teams and allows teams to be more agile in their approach.
Lack of attention to succession planning can be costly and put undue stress on the C-suite, HR, and employees. It’s a priority for companies at any stage and size to ensure that they’re focusing on strong business results both now and long term.
– Originally written by Adi Janowitz, VP of Customer Success at Hibob