Succession planning best practices to keep your company on track

How long have your company leaders and senior staff members held their positions within your organization? However long it may be, you can bet they won’t be there forever (unless they’ve discovered a fountain of youth we don’t know about). That’s why following succession planning best practices is essential, so you’ll be prepared when the time comes to replace someone in a leadership role.

Source:forbes.com/sites/forbesbusinesscouncil/2020/05/26/why-succession-planning-is-vital-and-how-you-can-start-today

A succession plan shouldn’t just be in the back of your mind as an HR professional; it should be something you’re constantly improving and enhancing so that when the moment comes to hand over to a new member of staff, your organization is fully prepared. If your mind draws a blank when thinking about the succession plans best practices, don’t worry. You’re in the right place.

We’ve covered all you need to know on succession planning right here. Take a look.

What is meant by succession planning?

Let’s start by looking at what succession planning means. Succession planning includes all of the steps taken to identify which roles are important in a company and which potential candidates could become successors for those roles. It goes beyond simple selection, though, as part of succession planning involves ensuring your successors are prepared for the handover and making sure they have the required training, skills, and experience to fill the role.

It helps to be aware that succession planning isn’t normally achieved in a matter of hours. It should be continually tweaked and adjusted as it’s a constant process – the end goal of which is to guarantee your new leadership successor retains the former’s leader’s quality and familiarity with all aspects of the business.

Why is succession planning important?

Less than 50% of business owners develop a succession plan, and only one-third of family businesses survive the critical transition. This is one reason why succession planning is important.

Another reason is that it will prevent any potential disruption during the handover. How will it achieve this? According to a case study that explored leadership handover at McKinsey & Company, it’s important to have a group of candidates you can select from every three years. Planning for succession can help with this by helping you identify which candidates are ideal. But there are many other reasons why you shouldn’t forget to prepare and plan for future handovers.

Not only can you avoid wasting time, but you’ll also avoid unnecessary costs that can be incurred when recruiting for the successor – costs that are typically caused by a long time to hire.

When you add to this that training is simpler to organize if you have a great succession plan, it’s difficult to see why you wouldn’t want to plan for succession. It can even help you keep track of the exact skills required for the successor to be successful in their new role.

What are the advantages of having a succession plan in place?

So, succession planning is important, but it also gives your organization various advantages. The first advantage of succession planning is that it helps you visualize and understand how your successor will fill their predecessor’s shoes.

To put it another way, it gives you a strategy to enhance your leadership and plan ahead in terms of recruitment.

Other advantages of continually developing your succession plan include that:

• With a succession plan, your business is covered in the event one of your senior staff members suddenly leaves to join another organization.

• You will already be aware of which team members are ideal or suitable to take the lead with a well-considered succession plan, and

• It ensures your brand identity is maintained, as you’ll be able to nurture internal candidates before the handover, aim to continue with what works in your organization, and avoid any surprises.

9 key steps to help you prepare a succession planning approach

Here’s a quick guide that will help you prepare your succession planning approach. We’ve included nine key steps to ensure that you won’t miss anything out.

1. Decide on a timeline for your succession plan. Although you might think you have plenty of time ahead of you, you might find that one of your team members decides to leave their position on short notice. It’s important to be prepared, so be sure to plan ahead.

2. Distinguish the key roles in your organization and determine whether these roles will need to be filled in the future.

3. Complete job analyses for each role that might potentially need filling. This includes keeping a log of the responsibilities of the role that might need to be filled. You’ll also need to keep track of the skills required to be successful in the vacancy to prepare your potential candidates for the role.

4. Prepare job profiles for the roles you might need to recruit for, based on your job analyses. As with the job analyses, your job profiles should include the skills used and detail the specific tasks typically carried out in the position.

5. Carry out internal talent sourcing to identify which candidates will likely be a good fit if senior roles will need filling.

6. Begin recruiting both internal and external candidates by building your talent pool. Using a referral program for your employees will enable you to attract the best talent for your vacancy within your organization for internal candidates. For external candidates, social media can help to attract top talent.

7. Use skills testing platforms such as TestGorilla to assess your candidates – (there are several advantages to this, including avoiding bias, lowering time to hire, and evaluating candidates reliably).

8. Arrange interviews to discover which candidates will be a good fit for the handover.

9. Choose a successor.

6 best practices to improve your succession plan

Although we have covered the key steps for developing a succession plan, and sometimes it’s a no-brainer to pick the right successor, you might need a few more tips. So, are six of the best practices for making sure the plan goes as smoothly as possible.

1. As an HR team member, remember to take guidance from department leaders on succession plans and communicate with stakeholders to gain insight into what will work and what might not for your organization.

2. To determine which positions might need to be filled and identify which roles are vital in your business, consider which employees are leaders and make important decisions for the organization.

3. To carry out your job analysis, you might start by observing the employees who currently carry out the leadership role. Then you should go on to evaluate each responsibility and determine which are the most important. This is important for organizing training for the successor and for writing your job description.

4. If you’re unsure whether to recruit internally or externally, there are advantages to each of these options. Whereas recruiting externally lets you gain new, fresher ideas for your business, consider whether there are great candidates already within your organization which might be more cost-effective—an external hire’s salary is on average 18-20% more than that of internal candidates.

5. Carrying out talent reviews frequently is important. It will help ensure you’re aware of your current employee’s aptitudes and make it easier for you to know who has the strengths and skills required for the succession.

6. If you’re recruiting external candidates as part of your handover process, a skills test will provide great insights into your potential successor’s aptitudes. This will make it simpler to assess whether your new team leader has the right skills for the job.

They are also the ideal way to reduce turnover, which can cost your organization 3 to 5 times their annual wages if you’re replacing a C-Level employee. Take a look at TestGorilla’s skills tests to help here. Our tests are constantly being improved and enhanced by experts.

Evaluate your succession planning approach to judge its effectiveness

Just because your successor has been hired, this doesn’t mean your work is over! Your final step is to evaluate the new employee and see whether they fit well within the role. Some top ways to measure their success include:

• Considering your talent retention success

• Analyzing your turnover rates, and

• Assessing your recruiting costs

You’ll want to evaluate these criteria over time to ensure that your succession planning has been a success, and also look for ways to improve it.

Succession planning: the best way to maintain exceptional leadership

Though you might have thought about it, resist the temptation to postpone succession planning! It’s important, and it has many advantages. Plus, now that you’re familiar with the succession plans best practices, it’s not as complicated as it first seemed. Remember, with a good succession plan, you will maintain:

• Your organization’s brand with a continual leadership style

• Your successor’s success rate within the company by pinpointing training opportunities, and

• Your overall team’s success, as they’ll have strong leadership and inspiration to continue hitting targets

Even though the succession transition period can present various challenges, planning for it will help you achieve long-lasting business success. And don’t forget to explore TestGorilla’s skills testing platform to find out more about the benefits of skills testing.