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Expert Opinion
A traditional key purpose of succession planning has been to ensure business continuity after a leaders retirement, death or other unplanned event. However, it is increasingly being seen as an effective, systematic, formalised, and long-term approach to meeting the present and future staffing needs that an organisation currently has, or will require in the future, if it is to continue towards its vision and business objectives. Such a strategy can help an organisation to meet its continuing need for people at all levels and in all occupational groups, demonstrate its commitment to developing its people, and systematically identify, assess and develop its talent to fill company vacancies. At its simplest level, succession planning is ensuring that individuals have identified and developed a designated back up for their role and functions, or that of a potential successor.
William Byham (2001), author of "Grow your own leaders" suggests that organisations currently use one of two strategies to fill leadership vacancies:
- Natural selection - that is, filling positions from those internal employees that are 'fittest' or 'best' (as it is assumed that the 'fittest' successfully move upward), or hiring from outside the organisation if not enough people 'bubble up' from within. The perceived disadvantages of this option include the unfairness of such an approach because chance plays a significant role, as talented employees are often unknown by others in the organisation and are trapped in organisational silos because managers do not want to lose them, or these employees have jobs with a narrow scope that prevent them developing other skills and knowledge.
- An 'Acceleration Pool' or other succession planning method organisations that use such a strategy invest in, and nurture the skills and other attributes of, targeted staff of high potential through such activities as coaching, training, varied leadership positions, and organisation important work assignments.
Writing about succession planning from an overall organisational staffing perspective, William Rothwell (2002), Professor of Human Resource Development at Pennsylvania State University in the US, and author of two books on succession planning and human resource planning, notes that worker statistics are altering -"between 1998 and 2008, workers aged 45 or older will grow from 33% to 40% of the US workforce, while those between the ages of 25 and 44 will plummet from 51% in 1998 to 44% in 2008". This reduces the talent pool from which new leaders and successors can be developed.
In many organisations the need for action to be taken on succession planning has resulted from the identification that:
- Key staff will need to be replaced in the future;
- Work outputs and corporate objectives must continue to be met despite resignations, illness, vacations, and restructuring;
- Many staff are wanting jobs that offer challenges, empowerment, the opportunity to move to higher levels within the organisation, and/or the ability to gain new skills and expertise;
- Workers are becoming more educated, mobile, and willing to change jobs if their needs are not being met;
- There are skill and knowledge shortages in many industries that are becoming increasingly difficult to replace;
- The costs of replacing staff are significant (and increasing) - e.g. the costs of recruitment, training, lower performance while a new recruit is being brought up to speed, temporary cover etc.;
- The gap between the number of workers needed and the number available is widening;
- Employee demographics are changing, the labour force is aging, and a continuation of present trends will result in a serious shortage of higher level educated talent;
- Traditional methods of solving staffing shortages may not work in the future;
- More aggressive steps are being taken to attract and retain staff and 'bidding wars' are likely to develop.
Rothwell suggests that monitoring your organisation for the appearance of some common key symptoms will help indicate if your organisation would benefit from a succession plan. These symptoms include:
- Managers complaining they have no-one ready when vacancies arise;
- Increasing expenses for external searches for new employees;
- Those regarded as 'unofficial' possible successors are leaving by surprise citing they see no advancement opportunities for them within the organisation;
- High potential employees are leaving in greater percentages;
- There is a lack of numbers of women, minorities, or other groupings of staff that reflect the demographics of the organisation and its customers;
- Staff complain that promotion decisions seem to be based on favouritism, nepotism, capriciousness, or expediency.
Unfortunately, it does appear that many small to medium-sized businesses do not have succession plans or strategies in place (not even for their Chief Executive Officer's (CEO's), relying more on a crisis or short-term fix solution basis.
The identifiable benefits of having a succession plan include:
- Having back-up staff with the knowledge and skills that will enable people in key positions to take leave, attend training etc without the organisation or role failing to meet its objectives or having key decisions go un-made or made from a position of relative unpreparedness;
- Enabling a seamless transition when people resign, are ill or on vacation, or during restructuring;
- Having the skills and knowledge available for emergency situations;
- Strengthening the organisation's capabilities by developing the skills and knowledge the organisation needs (now and in the future);
- Enhancing the motivation of staff which can lead to higher retention and productivity rates;
- Reduced costs involved with hiring external applicants and bringing them up to speed with processes, systems and the organisational culture;
- Reduced training time and costs for replacement staff or those taking over new/existing positions. In comparison, the disadvantages of succession planning can include the:
- Difficulties in selecting the right people to develop and making an accurate assessment of their development needs;
- Costs of training, mentoring etc. that are inherent in succession planning programmes;
- Lack of follow through and follow up of development initiatives;
- Potential for grooming people for positions that may not exist in the future;
- Possibility of staff being headhunted by other organisations for their new skills and knowledge;
- Potential for people to lose motivation or resign if they do not get the job they wanted or feel 'passed over' by the organisation;
- Difficulty in keeping staff members motivated and employed by the organisation when they have reached the potential for a role but one does not yet exist or has not become vacant;
- Reduction in fresh perspectives, ideas, knowledge and skills that externally recruited staff can bring.
Despite the disadvantages cited above, the benefits to an organisation of succession planning are significant.
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