Updated: Jun 4
What would happen to your business if a key member of your staff announced their retirement or resignation? Do you have a succession plan in place?
An important part of managing risk and running a resilient business is being prepared for critical roles becoming vacant. A study done by the Corporate Leadership Council reveals that 76% of companies are less than confident in their ability to fill vacancies in leadership roles in the next 3-5 years.
Succession planning is the process of identifying and developing new leaders who are ready and able to step into the roles of experienced leaders when necessary. There are three overarching phases to tackle when developing a succession plan for your company.
Phase 1: Identify Needs. There are several questions to ask as you look ahead. Do you have employees that may be leaving soon either through retirement, voluntary resignation, or termination? Does your organization currently have any gaps in leadership? As you look at your company’s future goals, do you have the employees in place who can execute your plans?
Phase 2: Evaluate Your Current Workforce. Put the time into developing the skills of your current employees. Given that they understand the company and its culture already, you can shorten the learning curve and yield positive results quicker than hiring externally. Also, providing growth opportunities to current employees helps retain top talent. Employers identify employees who are making strong contributions to the company and help them further develop their skills while keeping an eye on future roles they may be able to step into.
Phase 3: Design a Plan. The most effective succession plan is the one that fits your company. You may not need or want a succession plan for every member of your organization. As you create your plan remember to update job descriptions, define performance metrics, and develop career paths for your workforce. These should be reviewed periodically so you are prepared to face challenges in the future.
We’ve all heard the saying “a failure to plan is a plan to fail.” Change can happen quickly and if there isn’t a clear plan in place to address what happens when a key employee leaves it will be difficult for the company to quickly adapt. It’s important to know that succession planning is not restricted to large companies with intricate organizational development policies; small to midsize businesses also reap the benefits. Succession planning not only fills a vacant position, it helps develop the workforce you already have.