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The Guide to Effective Succession Planning

The steps and processes of the succession planning process in business

07 Jul 2021

hands on a laptop

Something that most people have forcibly learned over the past year is that things can dramatically change in the blink of an eye. That is the same for most businesses. Businesses should always have a contingency plan to protect and future-proof operations.

Human resource departments will emphasize the fact that employees are a business’s biggest asset. With this in mind, business owners should prepare for unexpected changes.

Whenever a key employee in your organization leaves the company, things will begin to change. Not only do you lose an employee who has the institutional knowledge needed to be a success in the role, but there are also the added consequences of going through costly and time-consuming recruitment & onboarding processes.

That’s why, as a company, you should have processes in place to make sure that any loss of key employees doesn’t catch you off guard and leave you in the dark. If one of your top talents were to call it quits tomorrow, how would your business cope?

That’s why having an effective succession plan in place helps. It means that instead of going through the task of scrambling to find new roles from elsewhere, your succession plan makes sure that your internal talent is already equipped with the skills and drive needed to make a success of their next role within the company.

What is a Succession Plan?

Before you can learn about how to create a successful succession plan, you first need to understand what is and how it's best used within the structure of an organization.

By definition, succession planning is going through the process of identifying and training the next generation of leaders who could assume a leadership role should an employee in that role leave the company or get promoted within the company.

Succession plans outline the process of filling that vacant role as quickly as possible with little time needed for recruitment and training.

What is the Purpose of a Succession Plan?

In some cases, such as in retirement or during maternity leave, staff departures are expected and even planned for. However, there are some cases when a senior leader leaves the company unexpectedly. Here, a contingency plan must be in place so that their critical position is filled quickly. Not having this plan in place could damage the company’s journey towards achieving its goals.

Succession planning is slightly different from career pathing. Career pathing is when all high-potential roles that an employee could hold within a company are mapped out as they go through a career development -whether vertically or laterally. Succession planning doesn’t have to just be for the high up senior executive roles- they should be used for any role that is considered crucial to the success of the business and that requires a level of skill sets or expertise that are not easily replaceable.

Why is Succession Planning Important?

Succession planning is an important and integral part of the process when it comes to the talent management process. The reason for this is that it helps to create a pathway of identifying key roles within an organization, the people who have the right skillset and attributes for those roles, and the positions that will need filling quickly should they become vacant.

Having a successful succession planning strategy in place will help to cut the costs and time of staffing as organizations will be able to manage their recruitment in-house.

Most organizations run with the expectation of having a requirement to prepare for these situations. Succession plans will typically include the outline of a handover process of employing a senior leader in the interim that will handle a number of duties and tasks that will get them used to the role that they may take over in the future.

Who is Responsible for Succession Planning?

Succession Planning commitment begins with management, followed by the CEO. Without the commitment in place, the process is unlikely to work effectively. Additionally, the Board of Directors is responsible for some elements of the development plan. Their job is to hold the CEO accountable for making sure that any succession plans in place are working effectively, too.

But what is HR’s role in succession planning?

HR departments would usually be responsible for developing processes and all of the related materials in addition to the implementation. The CEO, Senior Leaders, The Board, and HR must all work together to engage with succession plans.

What Metrics Determine Succession Planning Success?

One of the main fundamentals of Human Resources within an organization is to implement a company culture where every single employee matters to an organization. That is why when it comes to recruiting and retaining staff, they make sure that they have the best talent on board.

The effectiveness of your organization’s succession plans can be determined in several different ways;

Bench Strength: Identifying Potential and Readiness of Existing Staff

This is the measurement of talent that is ‘sat on the bench’- not quite playing the game but could be ready to be subbed at any time the need arises.

To assess the bench strength of your organization, speak with leaders regularly about the members of staff on their team. Are any of them showing potential in leadership skills? Is anybody interested in a leadership position? That will help to identify those who are the high-potential employees capable of moving up a rank when a position becomes available.

The reason for bench strength being a strong metric when it comes to succession planning is that it depends highly on having a strong team of players who would be willing to step up to the plate and take up more challenging responsibilities and positions when needed. Without having these people in place it means having to go through the expensive and time-consuming process of going through an external hire.

Risk of Loss

Another metric should not only take the employee’s skills into account but also their engagement. Employee engagement metrics are based on asking management to assess how excited and engaged an employee is in their existing position or whether they seem ready for a career move.

Managers are more likely to be able to identify whether an employee is likely to leave the company in the next six to twelve months bases on their engagement level. Their marketable skills should also be taken into consideration as these will make the employee a potential target for outside recruiters. Employees that are engaged within an organization are more likely to be in it for the long run and worth investing in for potential succession later down the line.

Successful succession plans prepare for gaps in teams left from promotions and departures. The metrics help managers to consider the balance of their teams when an employee leaves.

Equality and Diversity

Employers should make sure that their bench doesn’t lack the diversity needed to continually build a diverse team from the ground up. There are many benefits of diversity and inclusion within a team; including the ability to make better decisions.

Diversity in the workplace can be measured by several factors such as; pay gaps, regional diversity benchmarks, gender, age, and race ratios.

General Succession Planning Framework

Every succession plan needs to follow a general framework to be deemed successful.

  • Identify key areas and positions
    These key areas and positions are crucial within an organization’s operational activities and strategy. Businesses should identify the positions that are necessary to help the organization to achieve their business goals now and in the future. They should say which of those positions would make it difficult to achieve these goals if left vacant.
  • Identify Capabilities for Key Areas and Positions
    Focus on employee development efforts and set performance expectations. Here businesses can determine the capabilities needed for the key areas and positions previously identified. They should look at the relevant knowledge, abilities, skills, and competencies that are needed to help to achieve business goals. Then inform employees about the key areas and positions and the expected capabilities needed to achieve them.
  • Identify Interested Employees and Assess against the outlined Capabilities
    Interested employees will make themselves known. It is the job of the succession plan to be able to identify which of these interested employees has the potential to gull these key areas and positions. Career plans and interests should, therefore, be a continuous conversation between employers and employees. These conversations will help employers to be able to assess the positions that could experience vulnerability if left vacant and the potential candidates who may be ready to advance with the necessary training and development.
  • Develop and Implement Succession and Knowledge Transfer Plans
    Companies need to use strategies that implement learning, training, development, and the transference of corporate knowledge into their succession planning and management. This could look like mentoring and training new hires as part of their professional development.
    Here, companies can link their employees’ learning plans alongside the necessary knowledge, skills, and abilities needed to fulfill current and future roles.
  • Evaluate The Effectiveness of Current Plans
    Monitoring and evaluating a business’s current succession plan ensures that all key areas and positions are developed. It also makes sure that key positions are filled quickly and that all new hires in these key positions are performing their roles efficiently. The evaluation also ensures that members of demographics within an organization are represented adequately in leadership positions and feeder groups.

Steps to Building Succession Planning Strategy

Identifying Succession Candidates

Organizations should choose team members who can easily step into a leadership role when it becomes vacant. However, they shouldn’t go with the assumption that employees know how people within the team view their career goals. While they may have a good idea of who could fill a vacancy as it arises, if that employee’s goals don’t align with the position, then they will need to reassess. This is why it is important to discuss career goals with employees regularly to help them make succession choices.

Work on professional development

Businesses should already have been investing in the professional development of the pre-selected employees set for potential succession roles. These candidates should have as much exposure to the operations of the business as possible to help them to gain knowledge and experience of the role. By connecting with mentors, their soft skills can be boosted, deeming them acceptable for a leadership role. Skills that require focus are; communication, and interpersonal skills such as diplomacy and empathy.

Complete a Trial Run of your Succession Plan

Potential successors should have the opportunity to assume some of the responsibilities of a role before it becomes fully available, such as when a manager takes leave time. This employee will gain some of the experience and confidence needed to fulfill the role when it is their ‘turn’ to take it on. This also helps to identify gaps in knowledge that may need filling.

Common Mistakes Made in Succession Planning

Businesses that take a rushed approach to their succession planning can often have a detrimental effect on their talent management processes.

One of the most common mistakes that are made during the process is that assumptions are often made about employees' plans for their next steps in their careers.

Another mistake is overlooking the importance of continuous performance management for employees. Taking the time to check on employees' progress regularly is much more effective than an annual review. Not doing so can disengage employees and harm their commitment to business growth.


Succession planning is a key strategy used by businesses to ensure that they are prepared for future changes in the present. Businesses that display their competencies in effective succession planning can match employees with the organization’s long-term goals and stay committed to their leadership development.

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