Succession Plan

What is succession plan?

A succession plan is a strategy that concentrates on spotting potential leaders and high performers and fostering their growth so they can move up the corporate ladder. (BambooHR,2023).

Businesses promote two parts of a succession plan: a plan to select the right people and a process to retain, promote, and train the appropriate people to fill a new position (Ballaro, 2017).

Leaders in companies recommend skill-development programs or mentorship as a way to foster internal talent (Hill,2005)

Succession planning is vital because, as an organization grows, it’s more cost-effective to develop current employees for key positions rather than hire new people. Giving employees a clear path forward in their careers via a succession plan can also boost engagement and retention.

Figure 01: Succession Planning (BambooHR,2023).

What Is the Purpose of a Succession Plan?

In a nutshell, a succession plan’s purpose is to promote employees from within the organization. This helps fill the void previous leaders have left behind with qualified employees who already know your organization, which helps grow both your people and your company.
A succession plan also aims to reduce your business’s turnover rate. A valuable employee is less likely to leave if their company recognizes their leadership potential and allows them to move forward with their career.
Ensuring that the right people take the helm also reduces turnover by serving as a morale boost for the rest of your workforce. It’s a reassurance that the company will still be in good hands. Employees are often adept at spotting red flags within a company—they’ll be more compelled to leave if your company shows signs of leadership trouble.
In a way, developing succession plans is like buying insurance for your business in case of an emergency—except it also involves training employees to become leaders someday(BambooHR,2023).

According to the Bamboo HR(2023),Benefits of a Succession Plan

At its core, an effective succession plan should help an organization choose and develop the right people for leadership positions. Doing this well could be a huge boon when you consider that 82 percent of the time, companies fail to choose people with the right skill sets to fill manager roles. Managers can make or break a team’s productivity, performance, engagement, and more, so choosing the right leader is vital for long-term success. Besides filling leadership positions with great people, organizations can also gain a variety of other benefits when they take the time to develop a formal, thoughtful succession plan, such as:

·       Lower hiring costs

·       Stronger internal hires

·       Shorter vacancies for key positions

·       Better career development

·       Increased employee engagement

·       Higher performance

·       Increased retention

According to the Bamboo HR(2023),Key Elements of Succession Planning

While succession planning may look a little different in each organization, most succession plans should include the following:

• Defined goal(s): Your organization should define what the end goal of the succession plan is, whether that’s to help employees increase their expertise, learn managerial skills, or something else.
• Tasks or requirements: This is essentially a list of requirements for what is needed in order to reach the end goal of the succession plan.
• Timeline: Knowing how much time employee development may take will help your organization align the succession plan with times when you need people to step into new roles.
• Budget: Define how much money or what resources you will dedicate to succession planning, as that will shape every other element of your organization’s plan.
• Strategy: Finally, define how you plan to introduce, execute, and measure the results of a succession plan.

Conclusion

Leadership changes can sometimes lead to turnover. Your succession plan should include HR strategies for retaining or recruiting employees interested in taking up new roles. It also helps to build an office culture that encourages its staff to develop their talents further and be more open to changes in the workplace.

References

Ballaro, J. and Polk,L (2017) Developing an Organization for Future Growth Using Succession Planning. Organization Development Journal. Available at: https://www.researchgate.net/profile/Laura-Polk/publication/322399720_Developing_an_organization_for_future_growth_using_succession_planning/links/5a8da542458515eb85aba7c3/Developing-an-organization-for-future-growth-using-succession-planning.pdf  [Accessed on April 2023]

BambooHR,2023.Succession Plan. Available at: https://www.bamboohr.com/resources/hr-glossary/succession-plan [Accessed on April 2023]

Hill, G. C. (2005). The effects of managerial succession on organizational performance. Journal of Public Administration Research and Theory, 15, 585–597. doi:10.1093/ jopart/mui034.