Succession planning helps companies prepare for situations where an employee may leave the company for any reason, such as retirement.

When a company has a plan for future leadership, it can select and train the right employees to take over leadership positions at the right time, helping to smooth the transition.

By planning early, a company can continue its work and reduce the waste of time and money when employees leave their jobs. This article will explain the steps of developing a succession plan and answer the most common questions.

Definition of Succession Planning

The goal of succession planning is to fill important positions that employees leave for various reasons related to their job or their health status and plan accordingly.

The most important professional reasons are employees moving to other positions in the company, retiring, or looking for other opportunities. Company leaders select new or existing team members suitable to fill vacant positions based on their job performance and behavior with others.

Selecting future leaders is key to an organization’s overall hiring and talent management strategy. Business leaders review and update their plans regularly in anticipation of any potential changes that accompany the company's growth.

How to Create a Succession Plan?

Here are 4 steps to follow when planning for the future of your organization:

1. Understand your organization’s vision and values

Your organisation’s leaders should understand their values ​​and have a clear idea of ​​the organization’s future vision. This helps in selecting the best candidates for specific positions. Every organization should develop its own plan because it has a different vision.

Organizations in industries such as finance are more likely to look for employees with different skills to fill leadership roles than companies in the technology industry. For example, a fast-growing tech startup might value innovation and look for creative leaders to take over the team when current leaders are promoted or leave the company.

In contrast, a financial company might look for individuals who excel in their job performance to fill vacant leadership positions.

2. Select leaders from among employees

You can select leaders from employees by assessing the current workforce and determining appropriate criteria. Company leaders may find that employees with strong leadership skills are not currently in leadership positions but are supporting the company in lower positions.

For example, a technical support specialist who consistently meets or exceeds goals and receives excellent peer feedback may be more successful in a supervisory position. The company benefits from selecting and promoting skilled employees because their leadership roles enable them to help others improve.

To select employees with leadership potential, you should objectively review each employee’s performance and determine their desire to grow within the company.

Typically, your best employees are those who plan their careers and seek opportunities for advancement. Here are signs to help you spot these employees within your company:

• Participating in additional training.
• Seeking advanced education, such as a master’s degree.
• Accepting additional job responsibilities.
• Adapting quickly to changes in projects, teams, or the work environment.
• Ability to resolve conflicts.

3. Applying the Talent Matrix

The nine-box talent matrix is ​​an effective tool for organizing employees based on their performance and skill level. The matrix consists of nine boxes representing levels of performance and potential: low, medium, and high.

Outstanding employees can be categorized in the upper middle and right boxes, while those who show promise but are underperforming can be placed in the upper left box. The matrix highlights employees with high potential based on their ability to learn quickly and take on new tasks.

Performance evaluation is based on the level of achievement of employees in their current positions and the extent to which they achieve goals.

Using the talent matrix helps companies discover high-performing employees. It enables leaders to identify employees with low performance and potential, provide them with training programs, or transfer them to positions that match their skills.

4. Discussing goals with employees

Before selecting an employee for a leadership position, it is preferable to talk to them about their career goals to find out how interested they are in career advancement or taking on a new position.

These conversations save leaders time if the employee is not interested in this and allow them to discover potential leaders by understanding employees’ ambitions and future plans.

Even employees who lack leadership skills can succeed if they are willing to develop them. Involving employees in the process makes the transition easier when it comes time for them to take on new roles because employees are better prepared to adapt to changes when they are involved in the preparations from the beginning.

FAQs about Succession Planning

1. What are the benefits of a succession plan?

There are several benefits to selecting future leaders, including:

4.1. Improved employee retention

Recognizing and promoting employees for their efforts motivates them to continue working for the company.

4.2. Boosted morale

Future planning helps ease employees’ transition to management positions and encourages them to develop their career paths, creating a positive work environment that fosters optimism.

4.3. Assisted in hiring

Succession planning is an excellent recruitment tool because it helps recruiters identify the key skills or traits to look for in candidates. Developing leaders and promoting from within can also attract the best talent in the industry if the company is known for supporting the development of its employees.

4.4. Established clear guidelines for employees

Leaders set criteria for promoting employees that show them what they need to do if they want to advance in their careers.

2. Who is involved in this process?

Members of senior management, including management personnel such as the human resources director, are involved in developing the master plan.

The process begins by identifying the most important positions for the company’s operations and how to fill them if they become vacant. They also develop a strategy to identify the best candidates to fill those positions. This strategy often includes performance reviews and evaluations.

Executives typically don’t know all employees, so they work with HR and supervisors to find high-performing or high-potential employees. Involving more team members in the planning process increases the likelihood of discovering the right people to fill positions at all company levels.

Identifying candidates for executive positions is a priority, but other management positions directly impact a company’s productivity.

For example, if a supervisor retires before the company has a replacement, his or her team may lack clear goals, leading to slower production. Planning for changes, such as retirement or leaving the company for any reason, by selecting the right people to fill middle and lower-level leadership positions ensures that operations continue running smoothly.

3. How can you engage employees who don’t want to move up from their current position?

While this process identifies key employees’ growth potential and the important positions they fit into, leaders should also consider high-performing employees who don’t want to move up. Employees may be satisfied in their current positions and able to contribute to succession planning in other ways.

Leaders should provide training to help these employees continue to improve their skills. When employees don’t plan for advancement or don’t care much about it, leaders should consider ways to retain them, such as recognizing their achievements and providing them with learning opportunities.

This approach emphasizes each employee's importance and that the company values ​​their contributions, which strengthens their connection to the team and the company.

4. How does a succession plan affect your career?

A company’s future plans directly affect your career at any stage, as positions can become vacant at any time for various reasons. If you’re interested in advancing your career, there may be an opportunity where you currently work. Here are some strategies to help you prove that you’re the right candidate for the vacant position:

4.1. Enhance your work ethic

By accepting challenges and taking on additional responsibilities, you can demonstrate your commitment to your work ethic and desire to advance your career. A positive attitude while performing your duties will also help you get leaders' attention.

4.2. Stay organized

Leaders need organizational skills to manage others, so make sure to meet deadlines, deliver projects on time, and go above and beyond whenever possible.

4.3. Advance your education

Invest in additional job training or education to achieve your career goals. Gaining experience and specialized knowledge will benefit you when leaders are looking for employees for executive positions.