Currently, the business world is experiencing a major generational gap—for the first time ever, millennial's are the largest generation in the workforce, yet senior management positions continue to be filled predominately by baby boomers. On average, around 10% to 15% of corporations appoint a new CEO each year.
The modern workforce is on the cusp of major changes, with a younger workforce taking over, it’s time organizations start to focus on new succession plans, that consider how leadership roles are changing and will change, including the new skills younger talent are bringing to the table.
Studies show that companies can use succession planning to their benefit—helping them attract and retain talent that they can help develop the skills needed for successful senior leadership, yet many businesses fail to put one in place.
Let’s explore why succession planning is so important.
What is Succession Planning
Succession planning is the practice of identifying high stake positions that will become vacant in the near future, either through retirement or attrition. It involves strategic consideration regarding whether there are internal candidates that could potentially fill the position—or whether a company will have to consider external applicants.
Identify Critical Roles
Succession planning exists to ensure critical roles in a business are always filled. These roles, generally filled by upper management and the C-Suite, ensure a department can meet its business objectives.
In order to build a succession plan to fill these roles, you must first know which roles are critical to your business’ success.
To identify these roles, consider:
- Working to identify key business challenges your company may face in future.
- Which areas/departments are likely to lose senior management to retirement?
- What is the role of each department head and how does their work affect your business?
Once you’ve identified these three elements, you can focus on building leadership profiles that indicate the skills necessary for the current role and those that might become vital in the future.
Align HR and Strategic Goals
Specifically, succession planning helps a business to focus on the future—developing and executing a plan for talent recruitment and employee growth. This can only be done however, with the help and expertise of your HR department.
Aligning strategic, future goals with HR enables your human resources department to begin the search for the right candidates for important positions, to begin building a succession funnel. This isn’t to say your HR department is specifically searching for candidates to replace current positions, but rather, identifying and recruiting talent that can be mentored and trained over time to move into higher managerial positions, and the C-Suite.
This step in succession planning enables your business to focus on the different types of leaders you’ll need in the future. We tend to fall victim to the affinity bias—looking for qualities in people that are like those we, ourselves, possess. But when succession planning, it is critical a business considers future needs, how the business will evolve and the types of new skills that may become vital to fulfilling the current role.
HR can help the C-Suite focus on finding talent that can develop into leaders of the future—capable of running your business as it will be, rather than how it currently is.
Isn’t it funny how a company will search for the best insurance to protect against natural disasters, take the time to install security of all kinds on its technology and offices, yet, fail to take the same precautions when it comes to their leadership?
Senior leadership is not infallible. Illness and early retirement are very real possibilities in business. Not to mention, top talent is often being wooed by other companies, who are willing to offer more responsibility, better titles and yes, more money.
Your company should think of succession planning as a form of insurance that provides security to your leadership team. A succession plan helps prepare you for the inevitable and the unexpected.
Provides Structure for Training
Once a business has identified top talent that’s interested in making the move to leadership roles, senior leaders and HR can work together to develop the ideal training to ensure candidates receive the right kind of professional development.
Consider working out a strategy that includes a focus on:
- Job shadowing
- Increased responsibilities
- Access to managerial training
Taking the time to provide training and education to employees you recognize as future leaders shows you’re making a clear investment in them—this positive behaviour will build trust and loyalty.
HRIS Technology Simplifies Succession Planning
Succession planning is an ongoing endeavor. Identifying critical roles, top talent and employees who possess both the potential and drive to step into senior management positions requires strategy and effective use of your HR department. Continuing assessment and strategic alignment of your business goals with your HR department can set your business on the right path.