Succession planning as defined by the Economic Times is the process by which individuals are scanned to pass on leadership roles within an organisation with the aim of ensuring business continuity in the event of the incumbent’s resignation, retirement or in the unfortunate case of death.
The Harvard business review pegs statistics of CEO turnover annually to be around 10% to 15% on a global basis. The same paper showed that 54% were grooming a specific successor to lead the corporation in the event of incapacitation of the incumbent whilst 39% had no viable internal candidates who could immediately replace the CEO if the position became unexpectedly vacant.
Succession planning is not however exclusively confined to senior management positions but to also to other crucial position within an organisation. The broader definition of succession planning is an exercise for keeping talent in the pipeline with a process that is forward-looking a year to 3 years in the future.
Effective succession planning ensures that business continuity by way of being prepared for all contingencies that might befall its talent pool. There are many favourable outcomes that come of succession planning done right amongst others, a standout is low staff attrition rates of a competent member of the team.
A report released by professional networking giant LinkedIn in 2018, the Workforce Learning Report, found that over 90% of employees would be interested in increasing their tenure with an organisation if the said organisation invested in their professional development.
The training and development on offer have been listed as one of the top 3 non-financial motivators for modern-day employees at it shows than the employer has their interests over the long haul. An organisations investment in human capital can be directly linked to the level of employee engagement which in turn affects the performance of the company.
Here are some of the things organisations consider when coming up with their succession planning roadmap:
Being deliberate with succession planning
The very definition of success planning indicates to it being an intentional and systematic effort to ensure leadership continuity in key positions at all levels.
The term bench strength is used a measure to show the percentage of confirmed key and critical positions that have a successor ready now, in the future or with no successors at all to talk about. The problem in most organisations is then that succession of a position is dealt with when the vacancy arises and the bench strength is virtually zero.
The underlying problem comes down to the issue of intent. The internal candidate will not magically ready to take on added responsibilities if no investment has been made their growth in that particular aspect. In complex roles, the general estimate is that it takes a new employee 6 months to become fully proficient in their role. Already some of the advantages of hiring an internal candidate are that they will already have critical institutional and tacit knowledge that reduces the steep learning curve that comes with commencing a new role.
Some well-known companies that are well known for their well-oiled succession planning include McKinsey and Company, and General Motors.
Identification of key positions
Once intent for succession planning has been set, the next stage in implementing succession planning is to identify the critical positions in the organisation. Factors for consideration to what can be classified a key position are;
- The level of expertise required
- The seniority of the role
- The relevant experience needed
- The ready availability of candidates in the market for such a position
Other pertinent questions to ask are;
- What is the impact to the business if that particular position was to unexpectedly become vacant?
- Is the position central to the strategic goals of the organisation?
- What is the average time it takes for a new recruit in that role to become fully operational
Analysing the current talent pool for potential
Not every employee in an organisation should be earmarked for retention. The target employee for succession planning should be those who have high potential and whose investment in them will benefit the company. There are many ways to pick the right candidates for development, amongst other methods- assessing work track records in terms of performance, psychometric testing and finding out the individual career aspirations.
Using the plan to influence the hiring strategy
Once all suitable internal candidates have been identified and have signed on into the process, the talent gaps that are still evident in the feeder streams should then be kept in mind when making future hiring decisions. This streamlining of the recruitment process with the actual needs, present and future, of the organisation will go a long way into ensuring business continuity.
Managing the action plan
A succession plan is an investment in the organisations future but it requires a lot of active effort for it to be realised. It is good to keep in mind that regular feedback to all those concerned and taking corrective action when needed will better the chances of the exercises becoming a success.
Takudzwa Vanessa Machingauta is a consultant at Industrial Psychology Consultants, a Business Management and HR Consulting Firm.