Companies need to develop their talent to compete in a global market. Top management is mainly responsible for the growth and survival of the organization.
To discharge such responsibilities, each organization needs to plan management succession.
Meaning of Succession Planning
Succession planning is done in different time frames to ensure the availability of the right managerial personnel at the right time in the right position for continuing organizational strength.
Most organizations plan for immediate requirements matching their budgets and business plans.
This shortsightedness leads them to an alarming situation when they find a shortage of managerial workforce to staff different positions in the organization, resulting in organizational collapse.
To avoid this, good organizations try to make succession planning in three different time frames, i.e., immediate, intermediate, and long-range.
Succession planning enables organizations to identify talented employees and provides education to develop them for future higher and broader responsibilities.
Unfortunately, many companies still struggle to create a formal process to identify, develop, and retain high-potential people within the organization.
Definition of Succession Planning
Succession planning is when an organization ensures that employees are recruited and developed to fill each key position within the company.
Through succession planning, organizations recruit superior employees, develop their knowledge, skills, and abilities, and prepare them for advancement or promotion into ever more challenging roles.
Succession planning is a process for identifying and developing potential future leaders or senior managers and individuals to fill other business-critical positions in the short or the long term.
In addition to training and development activities, succession planning programs typically include practical, tailored work experience that will be relevant for future senior or key roles.
Objectives of Succession Planning
Clear objectives are critical to establishing effective succession planning. These objectives tend to be core to many or most companies that have well-established practices:
- Identify those with the potential to assume greater responsibility in the organization.
- Provide critical development experiences to those that can move into key roles.
- Engage the leadership in supporting the development of high-potential leaders.
- Build a database that can be used to make better staffing decisions for key jobs.
- Improve employee commitment and retention.
- Meet the career development expectations of existing employees.
- Counter the increasing difficulty and costs of recruiting employees externally.
Elements of Succession Planning
Succession planning is not about replacing an existing employee. The purpose is to prepare the organization and develop its “bench strength” for future organizational requirements.
There are a few elements to managing a succession plan, such as;
- identifying key positions for which a succession plan is necessary,
- identifying the successor or successors,
- identifying job requirements,
- building competencies and
- assessing progress.
Process / Steps of Succession Planning
- The first step is to prepare and develop a management staffing plan for all anticipated needs in different time frames.
- The second step is staffing and development. Staffing is concerned with recruitment, selection, and placement. The development of managerial personnel is done through training, job rotation, projects and board assignments, performance appraisal, counseling, and guidance.
- The third step is to ensure a friendly organizational environment to retain the desired managerial personnel.
- The fourth step is developing a good performance appraisal system to get feedback on managerial performance and review their progress and shortfalls.
- Preparation of the management resource inventory is the final step in succession planning. The such inventory contains details of personal data, performance records, skills, potential career goals, and career paths of managerial personnel.
Fundamentals of Succession Planning
The fundamentals of succession planning include:
- Support from the CEO;
- Build a development mindset in the organization;
- Align the succession plan with the overall strategy of the company;
- Ensure data-driven decision-making;
- Assess performance culture regularly.
Ensure that succession planning is integrated with other processes of talent management, including performance management, training and development, compensation, and assessment;
- Link succession planning for competency management.
- Integrate with career development tools;
- Automate the succession planning process for greater efficiency and less operational risk.
Succession Planning Challenges
It is not an easy task to make effective succession planning. John B indicated that succession planning faces some challenges. These challenges fall under two categories: challenges with the process and challenges with the technology.
Integrating succession planning with other processes is the main challenge that companies are facing. Challenges to making the process work include the inability to locate or create a pool of active and passive candidates and a lack of interest from senior executives.
A study indicates that it is difficult to make effective succession planning due to a lack of assessment tools, succession planning tools, and career development tools.
These concerns in succession planning represent a broader challenge in human capital management, i.e., getting the talent needed and addressing the talent requirements for the future.
Another challenge with succession planning includes a lack of support from top management. Succession planning needs to be aligned with the business objectives of the company.
CEO and other senior management involvement are critical steps.
Succession planning will not become a companywide initiative if the management is not involved and actively ensures a more cohesive succession.