Succession planning is a process where you plan for the worst-case scenario while expecting the best. This type of planning is an opportunity for a business or organization to plan ahead of critical departures while ensuring present employees are prepared for new roles.
Sometimes called anticipatory workforce planning, succession planning is something that benefits both your company and the people who work at it. This article will delve into how to create a successful succession plan that you can count on in the future.
Important Statistics To Be Aware Of
If you are questioning the need for succession planning, there are a few statistics you should be aware of. Consider the following:
- Large organizations will lose half their senior executives in the next five years.
- By 2025, Millennials will make up three-quarters of the workforce.
- Only 36% of organizations have comprehensive management continuity plans.
- The average CFO grades for succession are C+ for planning and D for execution.
- Within 18 months, 66% of external manager hires fail.
These are only a few statistics that show just how critical succession planning is. It also goes to show that most businesses aren’t doing as well as they could be with planning or executing these items.
Employee Engagement and Succession Planning
Employee engagement refers to how passionate employees feel about their jobs. It also factors in how committed they are and how much extra effort they’re willing to put into their work.
When employees are engaged, you can expect higher productivity, quality, and service. It also leads to higher shareholder returns, elevated customer satisfaction, and increased sales.
In generations past, the three key drivers for employee engagement included the following:
- 80% – A relationship with the direct manager
- 70% – A belief in the senior leadership team
- 54% – A sense of pride for working for the company
However, as Millennials take over the workplace, these drivers have changed. The three main priorities to create employee engagement for this generation include:
- 52% – Opportunities to progress in a career
- 44% – Competitive wages and financial incentives
- 35% – Good training and development programs
One of the great things about Millennials is that more than 90% of them describe themselves as leaders. Nearly the same amount feel that working with a company that has a clear succession plan would make them much more engaged. Knowing all that is key to creating the perfect succession plan for your agency.
How Does Succession Planning Work?
Replacement planning is what happens when a couple of possible replacements are named. Succession planning is far more in-depth. It’s a process that involves identifying and then developing internal employees so they have the potential to fill key business knowledge and leadership positions.
There are four important aspects to succession planning. These include institutional knowledge capture, candidate pool identification, experience-based mentoring, and leader development culture.
Succession planning is part of running a successful organization. All companies will inevitably experience turnover and having no replacement can be a block to your career and those of other people. It grows the capabilities of a team by increasing engagement and career pathing. It also keeps leadership internal instead of needing to hire outside of the organization.
Institutional Knowledge Capture
When employees are in the same role for a long period, they gain institutional knowledge. This refers to an understanding or information about the relationships, systems, and tactics that ensure the organization runs smoothly. The need for this knowledge is one of the major reasons to reduce turnover and keep employee engagement high.
The two main methods to prevent institutional knowledge loss are succession planning and maintaining updated standard operating procedures. When someone holds knowledge that most others don’t have, a plan needs to be in place to back up that knowledge.
Candidate Pool Identification
Candidate pool identification is all about knowing which employees you have and what they are good at. Some of the most common ways to do this are through behavioral interviewing, 360-degree feedback, psychometric assessments, and performance benchmarking. The goal is to create practices that develop an inclusive environment that draws strength from many types of knowledge.
From there, companies can find the gaps and work to fill them. This could mean helping someone learn new responsibilities so they have a path forward or improving on skills they have. The point is to have a balanced candidate pool for any position that needs to be filled.
Experienced-based mentoring is precisely what it sounds like. Someone in an organization who has experience shares that knowledge with someone who does not. One method to do that is by providing direct knowledge transfer channels and accessible knowledge for everyone on a team.
However, there are other ways to allow the experience of others to impact other people. Stretch projects can teach new things or you can try relationship platforming and ride-alongs as learning opportunities. Behavioral coaching and performance coaching are also essential to the process.
Leader Development Culture
Lastly, you need to promote a leadership development culture. A great way to approach that is by ensuring every employee has a clear career path. This can be a vertical path up, a lateral path to one side, or even a radiating path. The point is for everyone to have somewhere to progress.
Performance feedback is also an essential part of the process in tandem with manager training. When it comes to Millennials, more feedback is better. They prefer monthly to quarterly or yearly feedback. In addition, everyone should have the chance to learn new things, experience other roles, and have the chance to spread their wings.
Succession planning requires a variety of steps and takes everyone to get it right. All members of the organization should feel valued. Even those who may not move into upper positions should be developed to remain fresh in their positions. There are all sorts of possibilities when you get the ball rolling with your succession planning.