Succession Planning: A Comprehensive Guide for HR

According to recent SHRM research, 46% of HR professionals in small firms, 31% in medium-sized organizations, and 27% in large organizations may claim that their company lacks a succession strategy. This highlights the need for a more proactive approach to talent management and leadership development across businesses of all sizes.

The stability and expansion of your company will be in jeopardy if you don’t have a succession plan. We’ll go over the essential tactics and best practices that your HR staff need to follow in order to create a successful succession plan and assist you in avoiding this. Dive in!

What Is Succession Planning?

The process and strategy of identifying critical positions within your company and creating action plans to assist high-achieving personnel in filling such positions is known as succession planning.

Making sure the appropriate people are in the proper jobs for today and tomorrow is the main goal of succession planning. Also, succession planning is one of those crucial practices that every organization must follow because companies earn 147% higher earnings per share when they have more talented managers and the rate of engaged employees doubles.

Additionally, an effective succession plan will help your organization with talent development and retention. It will also help you improve your employee retention, empower women in your workplace, and ensure employee happiness.

Identifying Critical Roles

Identifying essential responsibilities is one of the first phases in the succession planning process. Crucial personnel will directly affect the main activities, strategic choices and direction, and general performance of your company.

Role Assessment

Here are the key steps for identifying critical roles in succession planning:

1. Assess the current and future needs of your organization.
2. Identify the key positions in your organization which play a determining role in the success of your organization.
3. Communicate with your employees and provide them with training and development opportunities to make them a good fit for critical roles. This will also help you upskill your workforce for the challenges of tomorrow.

Criteria for Critical Roles

Here’s what you should consider when identifying critical roles within your organization:

1. The impact of a role on the success and well-being of your organization.
2. The availability of internal and external talent to meet the requirements of a role. The harder it is to find an individual that matches the talent requirements, the more critical the role is.
3. The urgency of succession planning for a particular role. For instance, the existing employee who is fulfilling the role is going to retire within five years.

Also Read: The Importance of Succession Planning

Establishing Succession Criteria

Establishing succession criteria is the second step in the succession planning process. The qualifications, experience, training, and abilities you seek in a prospective hire for a crucial position are known as succession criteria.

Skillsets and Competencies

• In your succession planning, you can either opt for skills-based succession planning or competency-based succession planning.
• In the case of skills-based succession planning, you will need to identify your organization’s strategic objectives, market trends, and the impact of technological advancements in the industry.
• On this basis, you will next search for abilities in possible applicants that will enable you to promote innovation in the company’s operations, raise customer satisfaction, and establish your brand’s competitiveness.
• Utilizing tools for succession planning, such as talent analytics and mobility from Engagedly, will also be necessary. These tools will give you a comprehensive picture of the performance, abilities, and accomplishments of each employee.
• If you believe someone has potential, you can even assist them in developing these competencies using this strategy. For example, emotional intelligence, change management, and the capacity to motivate others are essential for a leadership role.
  

Evaluation Benchmarks

• To evaluate your employees’ readiness and suitability for higher and more critical roles, you must set benchmarks against which to assess them. 
• One of the evaluation benchmarks that you must implement is related to the cultural and personality fit of the candidate.
• This means that if the candidate’s personality, working style, and values match with your organization’s, then there would be better collaboration, communication, and engagement, making them a good fit for the high role. 
• However, existing skills alone aren’t sufficient for critical roles. In order to keep developing and fulfill the ever-changing requirements of their position, candidates must exhibit learnability and adaptability.
• Additionally, the applicant must be able to handle difficult and stressful circumstances with grace.

Also Read: Strategic Workforce Planning: Aligning Human Resources With Business Goals

Talent Assessment

Once you have defined your critical roles and succession criteria, it is time to proceed to the next step of succession planning. This is known as talent assessment, which will help you assess your talent pool and identify potential successors.

Assessing Internal Talent

• You can use a variety of talent evaluations to evaluate internal talent and determine whether they are qualified for important tasks. For example, cognitive ability exams can be used to assess a candidate’s capacity for perception, thinking, and problem-solving.
• To assess someone’s morals, values, and personality in the job, you can also use personality tests.
• To obtain more insight into how they would function in various scenarios and whether or not they possess the necessary abilities, you can also provide situational judgment exams, performance reviews, and skills assessments.

Creating a Succession Matrix

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After completing all the above steps of succession planning, you must focus on creating a succession planning matrix. This tool will help you evaluate and visualize the readiness and potential of your employees for key roles in your organization. It will also help you identify talent gaps and plan for future leadership needs. 

Succession Matrix Design

• Usually, this matrix is created by plotting employees on a grid based on their current performance and potential for future roles.
• Its features include readiness levels, which categorize employees based on their readiness to take on their new roles.
• It also includes a potential assessment, which will evaluate your employee’s potential for future roles. 
• This matrix will help you identify areas where your employees need to work, hence helping you in workforce planning and talent management.

Managing Expectations

Another succession planning strategy that you must follow to manage the expectations of your potential candidates for critical roles is to discuss advancement opportunities with them and explain how their roles and circumstances may evolve and thus cannot be guaranteed.

Also, to ensure that you are using your resources effectively and keeping employee disappointment to the minimum, you must follow a targeted succession plan that will help you assess and develop their current skills, competencies, and career goals.

Also Read: What Is an Individual Development Plan (IDP)? Why Do You Need it?

Implementing the Succession Plan

While we have discussed the strategies for developing a succession plan, you must know how to implement it so that you can easily navigate through effective succession planning.

Action Steps

Here are some key action steps to effectively implement your succession plan:

1. Identify the critical positions.
2. Identify which critical positions will need to be filled.
3. Develop a job profile for an ideal candidate to fill the critical position.
4. Hand over the job in an active, fast-paced, and collaborative manner
5. Document the transition for future reference.

Communication Strategies

It is important to follow clear communication practices during succession planning. This will help ensure that your employees understand the objective and purpose of succession planning.

Employee engagement will increase and you will be able to draw in and keep top talent by giving your staff a sense of worth and involvement in the organization’s future. It will improve performance and motivation by assisting your staff in understanding their part in succession planning.

Also Read: Individual Development Plan: 7 IDP Templates & Examples to Inspire You in 2024

Monitoring and Reviewing the Plan

It is important to review and monitor your succession plan regularly. You can use well-performing succession planning templates from other companies in the same industry as a reference here.

To track and monitor your succession plan and the people involved in it, use feedback mechanisms like comparing against pre-determined performance metrics, conducting regular check-ins, and implementing succession planning tools like Engagedly to ease the entire process.

Overcoming Common Challenges

Two of the most common challenges that you will face during succession planning are:

Resource Constraints

• To develop and maintain an effective succession plan, you will need significant resources, including time.
• Thus, you will need to prioritize your resources by identifying the critical roles that need immediate attention and that you can afford some time for.
• Based on these insights, you should make a succession plan and use succession planning software to save resources and reduce costs.

Employee Concerns

• To help your employees feel valued and understood, you must address their concerns, encourage their feedback and ideas, and thus help them be a part of the succession planning process. 
• You must also share the need for succession planning and how it will be beneficial to them to make them feel engaged.
• Also, provide your employees with development and learning opportunities so that someday, they, too, can take over critical roles.

Also Read: Talent Management- What Is It And Why Is It Important?

Best Practices for Successful Succession Planning

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The top three succession planning best practices that you must incorporate to ensure success and effectiveness are:

Proactive Planning

• Make sure that you engage in proactive succession planning rather than a reactive one. This means that you should identify your potential candidates for critical roles early on and then give them the necessary support and opportunities to prepare for their future roles.

Engagement and Buy-In

• To make your succession planning process credible and trustworthy, you must involve senior leadership of your organization.
• They can do so by participating in succession planning meetings and decision-making processes and by training potential successors.
• Also, clearly communicate your organization’s commitment to developing internal talent and preparing employees for critical roles. This will boost their morale and keep them engaged.

Continuous Learning Culture

Give your employees learning and development opportunities to support leadership development and knowledge transfer and ensure a smooth succession transition. This will speed up the development of potential successors and even strengthen your organization’s culture by assuring continuity and reliability in future leadership.

Also Read: The Role of Diversity and Inclusion in Talent Management

Final Words

Making sure your organization grows and is stable requires effective succession planning. You must evaluate talent, identify crucial responsibilities, and cultivate future leaders in order to achieve this. By doing this, you can make sure that leadership changes in your company go smoothly.

Nonetheless, you need to prepare ahead, communicate properly, and carry out frequent evaluations in order to maintain a proactive and dynamic leadership pipeline.

With its extensive solutions for personnel analytics, performance tracking, and skill development, Engagedly can help you expedite the succession planning process in this way. This way, you can recognize and nurture future leaders and guarantee a seamless, well-thought-out succession planning process that will contribute to the long-term prosperity of your company.

Book a demo today!

Frequently Asked Questions

1. How frequently should a succession plan be reviewed and updated?

A succession plan should be reviewed and updated at least once a year, or more frequently if there are significant changes occurring inside your company, such as changes in the market, new business ventures, or changes in leadership.

2. How can you guarantee the impartiality and fairness of your succession plan?

You can employ objective talent assessment criteria, apply standardized evaluation techniques, and involve a diverse group of evaluators in the decision-making process if you want to make sure that your succession plan is impartial and fair.

3. How can the effectiveness of your succession plan be assessed?

Metrics including the length of time it takes to fill critical roles, the effectiveness of successors in their new roles, and general employee engagement and satisfaction are important to monitor in order to assess the success of your succession strategy.

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Author

Srikant Chellappa

CEO & Co-Founder of Engagedly

Srikant Chellappa is the Co-Founder and CEO at Engagedly and is a passionate entrepreneur and people leader. He is an author, producer/director of 6 feature films, a music album with his band Manchester Underground, and is the host of The People Strategy Leaders Podcast. He is currently working on his next book, Ikigai at the Workplace, which is slated for release in the fall of 2024.

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