Succession planning is not a complex process, but it does involve some careful planning.

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The first step is to identify the critical positions that can be difficult to fill. Many positions are important, but not all are critical. For a position to be critical it requires a high level of skill or expertise, and a vacancy would have a significant negative effect on the organization. There is a natural tendency to identify too many positions as critical, which will stretch the succession program thin, so an objective process should be applied utilizing an experienced cross functional team. Critical roles should also be considered. These may or may not be linked to a position. These are individuals with a particular gift mix that brings value to an organization such as a peace maker, a unifier, or an innovator. Roles can be the most difficult to identify, easy to ignore, but also cause the highest level of disruption when that person is gone.

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The next step in succession planning is to identify the high potential employees (HIPO’s). These are individuals that have the ability to advance one or two roles above their current position. They will be high performers, but they must also have future potential. Like the selection of key positions and roles, selection of HIPO’s should also be tied to an objective set of criteria and involve more than one individual in the selection process.

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In most cases, organizations will want to share the potential career path with the HIPO. After the positions and employees have been identified, a training and development plan can be put in place. This should always be part of an individual performance plan so the employee and their boss agree on the development steps and there can be some accountability to accomplishing goals. Activities related to development may include further education or certifications, on the job training, special projects, and step-up assignments.

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Benefits of a Succession Planning Program

There are many benefits to a succession planning program. Some are direct and very obvious; others are indirect and only uncovered as one drills down into the particular nuances of the program. 

Direct Benefits

• Agility and performance. A succession planning program will allow an organization to fill critical positions quickly. There is an obvious benefit as key employees retire, but it also provides for the ability of an organization to grow by supplying talent for key roles in expansion efforts. 

• Lower recruitment cost. There are many direct costs associated with external recruitment. According to The Society for Human Resources (SHRM) it may be as high as $4700 per employee across all roles. Critical roles are much higher, some as much as half of yearly compensation. Recruiting a high performing, high potential candidate is costly and time consuming.
   

Indirect Benefits

• Employee development. A well-executed succession planning program will include internal training and development. By nature, this training and development, since it is geared toward key positions and HIPO’s, will target the most important skill sets and highest performers. Training and development initiatives have been demonstrated to be significant factors in business success, engagement, and retention. Succession planning involves the most critical positions, most important individual contributors, and aligns them with a key success and retention factor. 

• Retention of institutional memory. Often referred to as tribal knowledge, intuitional memory can be very important to an organization. 

• Retention of intellectual capital. Knowledge, skill, and expertise is contained within the people, and a loss of key person often results in the loss skill and expertise. 

• Continuity of internal and external relationships.
   

There will always be the occasional need to bring in outside talent and expertise, but creating a culture where employees can see opportunities to grow and advance within an organization will create a sense of belonging for the future. The psychological benefit of this creates content and engaged employees who feel good about their organization.

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Solutions 

S. Miller Consulting can help with the creation and execution of a successful succession planning program through the creation of objective evaluation for HIPO’s, the identification of key positions and role, and the development of talent for the future.