What Is Succession Planning and Why Is It Important?

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According to a Global SHRM Survey, executives worldwide believe their two biggest challenges through 2020 will be attracting the best people to their organizations and retaining and rewarding the best people in their organizations through creative reward, engagement, development, and involvement practices.

Succession Planning happens to be a very important part of that Talent Management process for organizations of all sizes.

What is Succession Planning?

Succession Planning is essentially planning for and executing smooth transitions of leadership positions. This includes recruiting new talent, executive search, selection assessments, onboarding the new leader, and successfully transitioning the new leader in and the old leader out.

HR leaders play a key role in this process. HR finds the right people who will fit into the organization’s culture, ensure the right processes are in place to develop and train into leadership roles, ensure all employees are assessed, and drive the long-range view.

This Succession Planning approach and way of thinking enables HR to focus on what their organization’s top talent and leadership could become in the future, establish ways in which top talent can get exposure as well as have a strong career and individual development plan.

Why is Succession Planning Important?

Succession Planning is important because at the heart of the Talent Management process is identifying key roles and mapping out ways to ensure the organization has the right people with the right skills, capabilities, and experiences, in the right place at the right time.

The number of people in leadership roles who plan to retire in the next few years is higher than the number of people entering the workforce.

Organizations need to prepare for this phenomenon to happen and prepare the next generation of leaders to move up. The loss of organizational memory (tribal knowledge) is not to be underestimated.

The labor market is tight, and it’s an employee’s market. There is a shortage of top talent available therefore finding talent for leadership roles at your organization will be no easy feat.

Succession Planning is also important because executive search is expensive. Having the foresight to develop the top talent you currently have, actively recruiting top talent, and making sure they have the proper experiences to prepare them for the future is an important strategy. The complexity involved at the most senior leadership levels is significant. Preparing top talent to take on these roles and challenges is essential to organizational success.

ERC’s Director of Consulting, Lisa Codispoti, provided her insight on these keys to success:

  • Active engagement by the executive team and the board
  • Ensure the process is planned and structured
  • Ensure the process is considered an essential tool used on an ongoing basis as opposed to a once a year exercise
  • Design the process to be simple and straightforward rather than complex

ERC provides Strategic & Business Planning to help you develop & implement a plan.

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