Succession Planning – Why it is important, how organisations benefit from assessments

Succession planning should have a high priority in any strategic HR or business plan. Succession planning is “the process of identifying a longer-term plan for the orderly replacement of key employees.” (Wärnich, Carrell, Elbert & Hatfield: 2020; p.133). Succession planning forces organisations to develop high-potentials and assists in the transition process.

McLellan (2022) informs that leadership succession is critical in an organisation’s long-term success; however, for many organisations it is rather confusing and poses a difficult question. Therefore, often organisations rather opt to ignore succession planning and do not provide opportunities for employees to learn and grow new skills. In this article, we are making a case for the importance of succession planning.

The impact of effective succession planning

An effective succession plan helps organisations to identify future skills and competencies. They effectively plan successors for their future role. Such plan promotes employee growth and ensures that successors make the right impact. Most importantly, organisations are not rushing to fill open positions when their key employees leave.

Effective succession planning is important because:

• It guides Training and development
• It reduces costs to recruit and hire talent
• It assists in identifying key leaders for the future
• It helps to promote long-term planning
• It mitigate risks
• It shapes exit strategies
• It promotes progression
• It increases the morale and loyalty in the organisation

Some pains in succession planning

The reason why organisations avoid succession planning relates to its pains. Succession planning takes time. Time is short and succession planning is just another thing on the list. Some leaders perceive it as a threat and are resistant to this process. One of the key pitfalls of successful succession planning and developing a robust leadership pipeline is basing decisions on assumptions and subjective judgment. This increases resistance to the process. Often it is not clear who owns succession planning. Consequently, no one takes responsibility for it.

Dealing with the Pains

It is important to start with succession planning and ensure it is a priority in the strategic intent. One should talk to leaders about their goals and developmental and career plans. Carreer plans should be developed and assessments effectively used in the objective evaluation of competence and developmental areas.

During the on boarding process of key personnel, one should talk about succession planning and wishing them to stay long-term in the organisation.

There should be clear guidelines on who is responsible for the succession planning in the organisation. A dedicated person, team, committee or department will work towards achieving the required goal and have succession planning on their agenda. Then it will be a priority.

Resistance towards succession planning can be reduced by identifying the reasons for the resistance. Very often, the resistance is caused by unfair procedures and subjectivity in the process. Succession planning also means progression and promotion for some, but not for all. Therefore, the process must be fair and transparent.

By identifying and implementing an assessment process tied to specific competencies and skill levels, an organisation can establish standardised, objective measures by which to evaluate any strengths and opportunities for those high-potential employees who are suitable for future promotion.

A case for using assessments in the process of succession planning

Some facts have been highlighted by some assessment developers (TTS News & Blog), They found the following:

• High scoring leaders on leadership assessments are far more successful in their role
• Leaders who score low average on the assessments tend to leave the position far earlier
• High scoring leaders retain their staff at 3% higher rate than the lower performing colleagues. This has a big impact on medium-sized organisations
• Higher scoring leaders engage far more with their reporting employees. This contributes to the retention figure.
• High scoring leaders are more likely to be good change agents and help organisations to stay relevant.
• The cost to replace a non-performing executive is five time their annual salary. This cost is a substantial argument to utilise the best and most objective possible recruitment and succession methods.

In each process, leaders must evaluate whether the benefit outweighs the disadvantage. Although much thought and energy, planning and detail must go into a succession plan, the organisation benefits it times of change and crisis. Planning key employees for the long-term helps organisations to be resilient in the transition and promotes progression and growth. The benefit outweighs the disadvantage as long as the process is objective and fair.

• https://www.betterup.com/blog/succession-planning
• https://www.quantumworkplace.com/future-of-work/the-importance-of-succession-planning
• https://www.shl.com/resources/by-type/blog/2022/leadership-succession-time-for-new-blood/
• https://www.tts-talent.com/blog/succession-planning-and-the-future-of-leadership-a-global-survey/
• Wärnich. S, Carrell. M.R., Elbert. N.F. & Hatfield, R.D. (2020), Human Resources Management in South Africa, 6th edition, Cengage Learning, Hampshire, United Kingdom