• Succession planning helps employers minimize downtime if a key individual leaves the company.
• As assessment of key positions and company vision will help employers create a solid succession plan.

Succession planning is a tool companies use to provide for the future by investing in current employees to take over key positions in the event of retirement, death, or other departure of management personnel. This is becoming increasingly important as the Baby Boomer generation retires.

The goal of succession planning is to identify key management positions within the organization and identify employees who can be “groomed” to fill those positions if there are no designated successors already in place. In other words, it is a long-term investment in human capital to prepare the future leaders of the organization for positions the employees may hold some time down the road.

Developing a plan

To develop a succession plan, employers must first perform an assessment to determine:

• Which positions are strategically “key” positions in the organization;
• What is currently available in the workforce in terms of high potential employees who might be able to step into these positions with training and development; and
• What gaps exist, if any, between employee potential and future needs.

Company vision

This assessment must consider the vision of the future of the company — where it wants to be five or 10 years down the road — in terms of what areas will be expanding and what skills will be necessary for future growth and viability.

With this information, a plan can be developed. The current required skills of key employees can be identified, and training and development plans can be set up to develop potential individuals. Development may include special assignments, training in-house, taking outside courses, or working in another department to learn its functions.

Development should include frequent performance appraisals to track how the individual is meeting stated goals, including what additional training, experience, or education has been accomplished, and an ongoing assessment of the individual’s readiness and potential.

Some employers feel it necessary to keep employee development plans for succession a secret, even from the employees who are being groomed. The reason is to avoid potential discord in the workplace. When all employees know who is being groomed and who is not, it may cause those who are not being developed to look for opportunities elsewhere if the employee feels there is no future with the company.

However, there may be pitfalls with this approach. Perhaps a particular employee has no desire to move up for whatever reason. It would be beneficial for the employer to know this before committing time and expense into developing that individual.

There may also be other individuals who may not have been identified for development, but who desire to climb up the ranks and would welcome such an opportunity. These individuals, if identified, could be included in the program. Also, if the succession plans are not known, key people might leave the organization for other opportunities, not knowing the person was being developed for future positions. Each organization must determine this issue for itself.

No company wants to find itself in the position of suddenly having to replace a key individual and having no one ready for the job. With a succession plan in place, the prospect of this occurring can be minimized.