You’ve spent years working hard to build a business from the ground up. You have a great team. You’re financially successful, and now it’s time to sit back a bit and enjoy the fruits of your labor, right?
If only it were true. Before you can take your foot off the gas, you’ll need to make sure you have a solid succession plan in place.
What is succession planning?
We’re so glad you asked! Succession planning is simply identifying the most critical positions in your company and planning who will step into those positions when the time arrives.
Often, employers don’t think about who will replace their current team members until a position is about to become available. By this time, you’re forced into a reactive posture in the search for a replacement.
On the other hand, succession planning is a proactive approach to talent management, focused on pinpointing those who can take over crucial roles and responsibilities. These candidates can either be ready to step in immediately or they could become ready with some forethought and training. This strategic work equips you with an available talent pool for your company’s most important roles.
It’s an important, and often overlooked, process. It can feel hard to justify spending time and energy worrying about hypothetical staff changes, but you should look at it as a critical investment in your company’s future.
What’s so important about succession planning?
Proper succession planning prevents disruption in your daily operations. Waiting until a staffing shakeup occurs takes valuable time your company may not have to spare.
You not only need to find a replacement, but you also have to train them and, in some cases, even hire them!
If the position you’re filling requires a special knowledge or skill, that only increases the burden on the rest of your team covering those responsibilities. Added stress for your team is bad for morale and may end up costing you valued employees.
Solid succession planning, however, helps you retain employees by offering great career pathing opportunities.
Succession planning improves employee retention.
Younger generations of employees aren’t as likely to stick it out long-term in a company or position that feels stagnant. Succession planning covers your bases while also providing employees with a clear role in the future of the company.
In short, having clear conversations about future opportunities encourages employees to step up instead of jumping ship!
Plus, weaving advanced training and knowledge transfer into career development builds your in-house talent pool for future expansion. Whether you’re building new teams or expanding geographically, you’ll have people positioned to step up, ensuring a smoother transition.
And it’s not just the younger employees who reap succession planning rewards. Seasoned employees benefit as well. New parents may want more time with their families. Those approaching retirement may want to continue doing the work they love while cutting back on their hours. Giving them flexible options helps your team retain that talent and expertise.
How can I start setting up a succession plan?
The first step in creating a succession plan is to take a good look at your team to determine which crucial roles need a backup plan on deck. Once that’s complete, you can map out a system for evaluation and training.
- Outline the capabilities and competencies required for each role. In addition to a job description, include any competencies, knowledge, skills and special abilities required to perform the job.
- Assess your team’s current capabilities, potential, and commitment. This step may also require that you determine what tools you will need to use to rate these factors.
- Now it’s time to put together a development plan and training program to help qualified employees build the capabilities they need for the role. This can include experiential training and job shadowing or more formal training programs.
- Don’t forget to create a budget! Look beyond the financial costs. Budget time you’re your employees to carry out these training opportunities. Employees should not be doing this during free or unpaid time.
Who has the time to make this happen?
This brings us to the trickiest part of succession planning: who has time on your team to do it?
Taking on this process requires not only time, but also experience, and most small companies are already running short of bandwidth and funds.
Succession planning usually falls to HR because it really does take an HR or organizational development pro to manage the process. If a company is fortunate enough to have a dedicated staff member for HR, this generally falls outside of their skill set and adds work to plate that’s already full.
Outside help with creating your company’s succession plan is invaluable. As part of Xenium’s comprehensive support in the Complete HR + Payroll program, our team partners with yours to develop an effective succession strategy and execute the best plan for your team.
Schedule a call here to learn how Xenium’s Complete HR + Payroll service builds a strategic succession plan for your business’s future.