Our Guide to Effective Succession Planning

Change is a constant in organisations, especially when it comes to the workforce. It’s natural for your workforce to ebb and flow over time, as employees leave, get promoted, or even retire. However, the natural rhythm of change can undermine your business if you don’t have a succession plan in place. All it takes is a sudden resignation by someone in an important role, and you might find yourself scrambling for a solution.

Succession planning can help you avoid such headaches. It helps you identify and develop talented people to enable a smooth handover of your key roles, ensuring business continuity, productivity and growth.

This guide outlines the importance of succession planning and what it involves, so you can start implementing these strategies into your recruitment and HR practices today.

Why Use Succession Planning?

Effective succession planning is a lynchpin of HR strategy in successful organisations. It enables companies to build a deeper reserve of skills and experience internally, develop leaders for tomorrow, and be more agile in response to market changes and disruptions – and that’s just the start.

Here are several more reasons why we recommend succession planning:

Improve Employee Retention & Reduce Staff Turnover

Retaining your best people is an objective and a positive side effect of good succession planning. When your team know they can achieve career growth in your business, they will likely stay. And an added bonus is that reduced staff turnover helps you keep payroll expenses under control.

Make the Best Use of Hiring Resources

Succession planning allows you to better utilise internal talent, so any external hires are fully justified and supported by your key stakeholders. This helps when recruitment budgets are tight and you need to make the business case for looking outside your business, as you can explain how bringing in specific expertise will complement the internal talent pool.

When promoting internally, another benefit is reduced time in onboarding existing employees into their new positions, so they can be productive quickly.

Attract Fresh Talent

Succession planning enables you to attract candidates who can see they’re able to progress and develop beyond their initial role. Offering employees a clear path of advancement within your business makes for an enticing employee value proposition, which is also important for recruitment.

The Stages of Succession Planning

1. Assess Current and Future Needs

Effective succession planning requires a meeting of minds – specifically, your leadership and HR teams. Together, they can identify key goals for the organisation in the short-term and long-term. This exercise enables everyone to understand what will have an impact on recruitment and HR across the business.

During this exercise, you could consider objectives such as earnings targets, expansion plans, mergers or acquisitions on the horizon and overall headcount growth.

2. Determine Critical Roles & Skills

With the company’s priority goals established, the next stage is to identify the talent you require to fulfil them.

For the sake of simplicity, we’ll split this stage of succession planning into two areas: identifying your future leaders and outlining specialised roles that fall outside of the leadership team but are critical for operations.

Leadership Roles

Any decision-making role can fall under this category. If you were to prioritise specific management positions, it would make sense to start with those held by people who are due to retire or are expected to resign. Looking ahead, you could also include leadership roles that will be created in future.

Critical Roles & Skills

It’s just as important to establish which specialised roles and skills keep your business ticking. These could include positions that are usually difficult to recruit for, or are held by just one employee.

3. Identify Successors

For leadership succession planning, the sensible starting point is identifying your existing high-potential employees who demonstrate the ability and desire to advance up the ladder.

It’s highly likely that there are a couple of people within your team who are ready to take things to the next level. When you’re scouting for potential successors, keep an eye out for those who:

• Have already shown they can lead, inspire, make sensible decisions, and tackle problems head-on
• Are great communicators who feel just as at ease bonding with their team members as they are with an important client
• Know how to work well with others, build strong relationships, and handle conflicts with a steady hand
• Are self-driven and always ready to go the extra mile to see things through
• Have established strong connections with clients and colleagues across the business

Observation plays a big part in identifying these leadership qualities, but it also helps to have some objectivity in the process. Gathering data from performance reviews and feedback from managers in your business can uncover people with this potential. This is a useful starting point for building a shortlist of employees.

4. Outline a Recruitment Strategy

Once an internal shortlist is established, you will have a clearer picture of how to proceed with a recruitment strategy. Whilst you may find your shortlist of internal talent will produce all the successors you need, this is rarely the case for most organisations. A typical hiring strategy will involve both internal and external recruitment to bring your succession plan to fruition.

External Recruitment

By considering external candidates, you can access a wider pool of skills and experiences that may not currently exist within your organisation. It gives you opportunities to target specific expertise the business will need to meet its future goals, especially for roles that haven’t been created yet. Connecting with an HR, accounting and finance recruitment agency – like us – can give you access to market mapping and headhunting expertise, along with a broader network of candidates that wouldn’t otherwise be on your radar.

Internal Recruitment

On the other hand, internal recruitment gives you the advantage of hiring people who already understand your company culture, processes and objectives, which can help ease the transition significantly. An internal employee’s alignment with the company culture and values is already established.

Ultimately, you will likely need to strike a balance between internal and external hiring. The key is to go with approaches that best suit your overall succession plan and company objectives.

5. Create Development Plans for Internal Talent

Create tailored development plans for your high-potential employees that outline specific goals, training, and experiences they need for their next role. Include a timeline with review intervals, so you can track their progress in skill development and make sure they’ll be ready to step up when the time comes.

Training and development can take on many forms – mentoring, coaching, certifications, and stretch assignments to accelerate an employee’s skills and experience.

6. Monitor and Adjust Succession Plans

Succession planning is not a one-off exercise. Regularly reviewing your plans ensures they are relevant to the organisation’s current goals and responsive to future changes. You may schedule reviews of succession plans on an annual or bi-yearly basis. The pace of these reviews should match the rate of change in your business; if you’re in a fast-moving industry, more frequent check-ins may be necessary.

Access Expertise in Succession Planning and Recruitment

We hope our guide covers all the key considerations you need to think about for effective succession planning. To successfully execute your plan, it helps to have a people-focused recruiter working in partnership with your business to offer advice, guidance on how to manage internal and external candidates, and provide an expert perspective.

At CMA, our team of HR, accounting and finance recruitment specialists have supported hundreds of companies with managing change and building resilient workforces. To start your succession planning and find great people for your business, get in touch with us today.