Succession planning is a process for identifying and developing new leaders who can replace current leaders when they leave an organization. Effective succession planning requires a disciplined approach to identifying the most critical leadership roles across the organization, finding the people who could fill those roles and preparing them to step up.
While recruiting from outside the organization should be a strategic component of any plan, developing internal employees with the potential to move into leadership positions has many added benefits, including boosting employee morale, loyalty and retention. This approach also increases the availability of experienced and capable employees who are prepared to assume new roles as they become available.
There are many reasons why organizations need to be thinking about succession planning. The impending retirement of many baby boomers is expected to have a major impact on workforce capacity. As vacancies in key positions are on the upswing in many organizations, demographics indicate there are fewer experienced people available to fill them. Many organizations eliminated middle manager positions in the downturn and are scrambling to meet the demand for senior management expertise as the economic recovery accelerates. Many younger managers and employees interested in moving up lack the requisite skills and experience and haven't been adequately trained to step up.
Succession planning directly addresses the fact that employees will not be with an organization indefinitely and provides a process for dealing with the changes that will occur when they leave. With careful planning and preparation, organizations can manage the changes that result from a generational transfer of leadership as well as the ongoing fluctuations due to turnover of key employees and other potential workplace disruptions.
Many organizations tend to focus succession planning on the executive and senior management levels. Depending on the company size, however, it is often advisable to include middle managers, supervisors and all key positions in the plan. A useful way to think about which positions are key is to look at what is crucial for the operations of your organization and which combination of skills and experience would be hard to replace.
An effective succession plan will focus first on developing potential employees from within an organization. Employees who are assessed to have the skills, knowledge, qualities, motivation and potential can be developed through training, mentoring and other strategies to move into key positions. Important steps involved in planning include:
- Assessing current and future needs based on strategic plans, goals and objectives.
- Matching those needs to the capabilities of the existing workforce.
- Developing a plan to manage the gaps that will arise when individuals in key positions leave or are promoted.
The resulting plan will generally include a combination of training and developing existing employees and outside recruiting as needed.
While succession planning is not necessarily the top priority in many organizations, addressing current and future needs to fill leadership and other key roles will become increasingly important for future organizational success.