Succession Planning: Importance & Process Explained
Succession planning focuses on making the right talent for future leadership and business-critical positions. In response to talent gaps, succession planning has grown in popularity and is now used in organisations of different sizes.
The process of identifying and training prospective future leaders and senior managers to fill business-critical jobs is known as succession planning. The goal is to be able to successfully fill important jobs if a current position holder moves on to another role or company. Typically, succession planning programmes involve practical, specialised work experience, and training relevant to future jobs.
Importance Of Succession Planning
Succession planning is crucial for assuring a company’s long-term success by identifying and nurturing the people that will fill critical roles in times of change. Organisations of all sizes are now concentrating on succession planning in order to ensure that work doesn’t get affected in the absence of employees holding key positions.
Here are a few reasons why succession planning is important:
1. Availability of Employees for Key Roles
Effective business succession planning increases the number of skilled people who are prepared to take up key positions according to their availability. As senior executives retire or senior management positions become vacant owing to the departure of important officers, leadership positions are readily replaced.
2. Retention of Experienced Employees
The most obvious potential advantage of succession planning is that it reduces the risk of experienced employees leaving. They have been in the system for many years and have adapted to the organisation’s culture. Hence, they are valuable assets to the company. With effective succession planning, organisations can reduce the need for an external search for competent successors for specific positions.
3. Reduction in Expenditure
It also reduces the amount of time and money spent seeking new employees to fill top management roles in the firm. The advantages of succession planning become extremely evident in circumstances where employee transitions occur suddenly. Since suitable internal candidates have already been identified and trained, there will not be a need of recruiting from outside the organisation, inducting them and providing them with the needed training and development.
4. Boosts Morale
According to a study, 34% of employees said that they are loyal to their present employer because they believe they will be able to contribute to the organisational goals in a key role over a period of time. Thus, individuals feel motivated and increase their productivity if they see a career path that has some growth for them.
5. Maintains the Trust of Stakeholders
Maintaining the trust of your Board of Directors and shareholders, whether your company is publicly listed or privately owned, is vital to its success. Having a succession plan that is well established indicates to stakeholders that you are proactive in managing existing personnel and planning for the future.
Process Of Creating An Ideal Succession Plan
The process of succession planning and management is an important part of the overall human resource planning process. It entails a comprehensive, systematic strategy to recognising, developing, and keeping qualified and skilled people in accordance with present and future corporate goals.
1. Identify Future Key Positions
A key position is one that has a substantial influence on the organisation’s capacity to continue normal operations if it were vacant. These roles, which might be filled or empty, can be managerial, technical, or support in nature. The first step in succession planning is to identify those positions.
Hence, it is important to:
- Analyse all job profiles in your organisation
- Review the current employees who hold these positions to understand their status in the organisation, plans, etc.
2. Recognise Potential Employees
Potential is a fairly subjective term. Therefore, finding the perfect match for a particular job profile may be challenging.
Keep these prerequisites in mind while looking for employees with great potential:
- Over-achieve in their current position
- Interested in pursuing leadership positions
- Resonate with the company’s culture
- Empathetic towards their colleagues
- Perform well in a team
- Have pre-existing skills that can be honed further
3. Bridge Talent Gaps
Once you recognise the employees who show calibre, it is necessary to identify their skill gaps to help them improve. The easiest way to identify skills with scope for improvement is by assigning them tasks and challenges and reviewing their performance. If their performance isn’t in alignment with the organisation’s goals, it should be considered as a talent gap.
4. Develop Programs & Training Workshops
Career development for employees is the process of enhancing existing competencies and abilities while also creating new ones to meet the organisation’s goals.
The next few steps will help you ensure this process is carried out smoothly:
- Keep in mind the organisation’s goals
- Conduct a skills gap analysis
- Provide formal training
- Follow up and conduct assessments
- Identify if further training is needed
5. Career Mapping
Career mapping is a strategy that managers and HR professionals may use with employees during career planning meetings. Employees may use career maps to think strategically about their career pathways and how to achieve their goals within the business. HR must create the required resources to assist managers and employees in successfully practising career mapping.
As good and beneficial succession planning might sound, it is a double-edged sword. Succession planning in organisations is a long and tedious process for Human Resource Executives. It is more than just human resources management. It involves data management of all the employees who are included in the succession plan in order to identify, shortlist and develop potential employees.
SAP SuccessFactors Succession & Development assists you in developing the talent you need to meet your company objectives and also offers insights and planning tools to support future expansion.
Here are a few reasons why SAP SuccessFactors Succession & Development Module is the right choice for your organisation:
- It serves as a planning solution that helps you assign the right employees for appropriate positions
- With continual employee development and leadership development, SAP SuccessFactors helps workers improve their abilities and grow in their careers
- It increases the efficiency of succession planning and other talent management procedures
To find out why SAP SuccessFactors Succession & Development is the perfect choice for your human resource management needs, book a demo today.