What is succession planning and why does it matter?

Learn what you can do to ensure talent continuity

Recent years have demonstrated just how quickly things can change. The onset of the COVID-19 pandemic caused operating models to flip upside down, tried-and-true strategies to be redrawn, and organizational priorities to pivot—sometimes overnight.

In the midst of so much disruption, many leaders are asking themselves the same question: what can we do now to set our organization up for success in our next chapter? But as the pace of change continues to accelerate, is it even possible for organizational planning to evolve to stay one step ahead?

The answer is yes, as long as you start prioritizing succession planning now. While no two future of work strategies will look the same, every organization is going to need to ensure talent continuity if they want to secure their status as a leader in the new world of work. So what does it take to turn succession planning into your competitive advantage?

What is succession planning?

Succession planning is a strategic process for preparing and developing existing employees to fill high-priority roles in your organization, ensuring business continuity and leadership when those roles become vacant due to retirement, promotion, or other reasons.

Generally, HR teams will take the lead on identifying jobs, skills, and potential competency gaps and designing initiatives to prepare the next generation to step into leadership roles. Succession planning is critical for future-proofing your workforce, as it ensures that your organization will have the right talent in the right places, not just now, but for years to come.

How does succession planning work?

Succession planning starts with creating a clear vision for your company’s future. Leaders need to come together to identify how they see the business progressing, both in the short and long term. Decisions need to be made about which positions are integral to your company’s success and what roles your organization cannot survive without.

Once these high-priority functions are identified, the next step is building a talent pipeline that your business will be able to rely on for the future. In the past, succession planning decisions have often been influenced by external factors, such as personal connections or preconceived notions about what the best fit for a role “should” look like.

However, AI-powered talent marketplaces can take bias out of the equation by identifying employees from across the organization who have the skills and experience needed to step into crucial roles. It’s important to remember that succession planning isn’t a one-time event; it’s an ongoing process. All employees should have access to professional development resources, including both learning curriculums and hands-on experience that gives everyone the chance to put these lessons into practice.

Why is succession planning important?

Succession planning is an essential process if you want to future-proof your workforce and ensure talent continuity. If leaders fail to think strategically about the challenges and business priorities that they are going to face in the future, there’s a real risk that they won’t have employees with the skills needed to support their organization in its next chapter.

Succession planning provides organizations with actionable steps to make sure they have the talent needed to outpace the competition not just now, but for years to come.

What benefits does succession planning offer businesses?

Here are 4 of the pay-offs associated with top-tier succession planning:

Reduced organizational risk

While some events (like a global pandemic) may be hard to predict, businesses know that their leadership will retire someday. Succession planning gives every organization an opportunity to prepare for change so they can respond quickly and minimize risk.

Cut hiring costs

When there’s no continuity plan in place, talent acquisition teams will most likely need to look outside of the organization to fill critical roles. Finding the right candidate for a high-priority role is challenging, particularly in today’s war for talent, which means your organization will likely need to devote plenty of time and money during your applicant search. In contrast, succession planning enables businesses to grow best-fit candidates from within their organization, usually through training or upskilling,  minimizing both external hiring fees and the length of time it takes to find a superior applicant.

Boost engagement and morale

If you want to motivate and retain your workforce, you need to show them that their future with your company is bright. Deloitte research found that employees believe it is 2.5 times easier to access opportunities outside of their organization than it is within their company. With succession planning, you can demonstrate that your people have plenty of potential to grow with your business, in turn encouraging them to strive towards achieving their fullest potential.

Increase DEIB efforts

New strategies for succession planning represent a meaningful win for promoting diversity, equity, and inclusion. Decisions about who’s going to fill leadership roles in the future will no longer be dictated by an employee’s personal connections or the names on their resume; instead, an AI-powered approach will identify best-fit candidates from across your organization to democratize access to opportunity.

How do I get started with succession planning?

Succession planning starts by bringing your organization together to create a shared vision for your future. This requires cross-functional collaboration and input from stakeholders who are supporting every function of the business. Rather than relying on traditional succession planning tactics that may have prioritized and uplifted a small subsect of your workforce, organizations can now harness two-sided, AI-powered talent marketplaces to identify the next generation of leaders from across their company.

To learn more about what you can do to empower your workforce to build the competencies they’ll need to lead your business into the future, check out our guide about skills, The ultimate guide to the skills-based organization.