Succession planning refers to the process in which employees are recruited and developed with the aim of filling a key role within an organization.
This increases the availability of experienced and competent employees who are prepared to replace old leaders as they leave, retire, or die.
Candidates identified to fill future vacancies undergo assessments to measure their ability to manage complex management operations.
Although there is no standard formula to conduct the assessment, senior leaders use various tools to analyze the individual capability of the candidates.
Such tools may include simulation, cognitive testing, team-based interviewing, and personality testing.
Organizations are now more and more moving away from the once-confidential process of hand-picking successors to a more transparent process of identifying high-performance leaders and preparing them for top leadership positions.
Importance of Succession Planning
1. Helps identify future leaders
Succession planning can help identify employees with unique abilities and skills that can help them move up to higher executive roles. The process of succession planning can also help identify an employee’s weak areas and where talent training could help to improve performance outcomes.
Replacements who come from within the organization understand its operations inside out and are better placed to undertake specific executive roles, especially in firms where knowledge is specific.
The need for available replacements when making changes to the organizational structure allows senior management to make changes without being affected by a lack of qualified personnel.
2. Minimizes recruitment costs
Since succession planning takes replacements from within the organization, the organization can save on costs that would otherwise go to external recruitment. Companies spend millions of dollars annually on hiring reputable HR firms to find suitable external candidates.
The cost of hiring a senior officer can be significantly higher than when sourcing potential candidates from within the organization. Moreover, it is more advantageous and cheaper for the organization to get an employee to work alongside a retiring senior executive before the knowledge escapes the organization.
3. Helps identify and address competency gaps
An organization can identify competency gaps among its employees through strategic succession planning. The competency gap is the distinction between the current competency level of the employees and the required competency level.
The gaps may be due to a lack of employees with the requisite skills, current needs for key executive positions, or key competencies that may be needed in the future.
The gaps will guide the organization in structuring the training or talent management programs to make sure that the employees are equipped with the required skills to perform more demanding functions.
The succession planning process continues to gain popularity among companies in recent years, in major companies such as Nike and IBM, succession planning is identified as part of an ongoing talent management program to groom future executives.
So what are you waiting for, help your business prepare to handle any eventuality, register for our strategic leadership and succession planning workshop, let’s help you and your employees develop the necessary leadership skills to position you and your business on the fast track to success.