Succession planning goes beyond simply finding replacements for outgoing employees; it’s a forward-thinking approach to developing team members for leadership and other critical roles as your organisation evolves. Yet, despite its importance, many companies struggle to implement it effectively. According to Deloitte, while 86% of business leaders recognise the value of succession planning, only 14% feel confident in their approach.

This gap highlights the need for a clear, structured strategy to identify and develop talent for the future. At emPerform, we understand these challenges and offer tools to simplify and streamline the process. In this guide, we’ll break down the fundamentals of succession planning, providing practical advice and actionable steps to help your business prepare for what’s next.

What Exactly is Succession Planning?

A structured approach that complements workforce planning, succession planning addresses your team’s future talent needs. While workforce planning focuses on having the right people with the right skills in place today, succession planning develops employees to fill key roles as they become available. Together, these two approaches create a strategic method for managing talent within Human Capital Management (HCM). By aligning professional development with your company’s goals, strategic planning helps maintain stability and reduces risks like poor decisions, mismatched hires, and strained team dynamics.

Why Succession Planning is Crucial for Your Business

Effective succession planning plays a key role in providing employees with the opportunity to gain experience and develop the skills necessary for both their personal success and the organisation’s long-term goals. It helps align individual growth with business objectives, creating a win-win situation for both.

Gallup’s research highlights the benefits of leveraging employee strengths in their daily work, showing that those who can focus on their strengths are:

• Six times more likely to be engaged at work.
• 57% less likely to experience burnout.

Additionally, the 2023 L&D Global Sentiment Survey highlighted upskilling and reskilling as top priorities for learning and development teams. Succession planning supports this trend by ensuring that companies actively prepare their workforce for future challenges, developing internal talent and creating a pipeline of leaders who are ready to take on new responsibilities.

Key Benefits of Succession Planning

1) Supports Employee Retention

When employees see opportunities for growth and career advancement, they are more likely to stay with the organisation, boosting employee retention. This, in turn, reduces attrition and absenteeism, as employees are motivated by the possibility of progressing within the company.

2) Promotes a Culture of Continuous Development

Succession planning encourages a continuous focus on learning and professional development. It provides employees with the tools and opportunities to grow, helping them prepare for future roles and responsibilities.

3) Increases Employee Engagement

When employees have a clear career path, it gives them a greater sense of purpose and belonging in their work. This leads to higher levels of motivation, satisfaction, and overall engagement with their role and the team.

4) Supports Diversity, Equity, and Inclusion (DEI)

Incorporating DEI strategies into succession planning helps make sure diverse perspectives are represented in leadership. By intentionally considering diversity when planning for leadership roles, employers can improve representation and create a more inclusive workplace.

5) Identifies Potential Leaders

A strong succession plan helps identify individuals with the potential to lead. By tracking performance and potential, employers can build a pipeline of leaders who are ready to step into critical roles when needed, cultivating long-term stability.

6) Risk Management

Succession planning minimises the impact of unexpected departures. By ensuring that key positions have a well-prepared backup, businesses can maintain continuity and avoid disruptions to operations during transitions.

7) Preserves Organisational Culture

A thoughtful succession plan helps preserve workplace culture, especially during leadership changes. By preparing employees for leadership transitions, you can make certain that values and company culture remain intact, even during times of change.

Steps to Create a Succession Plan

1) Set Up a Clear Process

Set up a well-defined, transparent structure for your succession planning. Clearly identify who is responsible for overseeing the process and confirm that everyone in the company understands its importance. Having a shared approach will streamline decision-making and promote a consistent strategy.

2) Identify Business-Critical Roles

Determine which roles are vital to the organisation’s success. This includes leadership positions as well as key technical and operational roles that keep your core functions running smoothly.

3) Define Succession Criteria

The two primary metrics to consider are future potential and overall performance. Clearly outline the skills, qualities, and experiences required for each key role in the business. This helps ensure that future candidates are well-prepared to meet the team’s specific needs. To make the criteria actionable, consider using SMART goals, so that the expectations for each role are clear and achievable for potential successors, and employees can focus on upskilling where needed.

4) Evaluate Your Talent Pool

When evaluating employees for succession planning, consider their track record of success in meeting goals and delivering results. Assess their leadership development and future potential, including decision-making skills, social skills, ability to lead teams and ongoing feedback from peers and management. Additionally, evaluate their self-awareness and emotional intelligence, as these traits are essential for managing relationships and handling challenges effectively.

5) Assign Mentors for Guidance

Pair potential successors with experienced leaders who can provide guidance and share valuable insights. Through regular support, mentors help individuals set clear goals, navigate challenges, and build the skills necessary for taking on greater responsibilities. This relationship accelerates growth and prepares employees for future leadership roles.

6) Implement Training and Development

Provide employees with the resources and opportunities to develop the skills necessary for future roles. This can include formal training programs, firsthand experience through on-the-job learning with mentors, or involvement in cross-departmental projects. These experiences help employees gain the knowledge and practical skills needed to step into higher-level positions.

7) Conduct Regular Check-Ins

Schedule regular reviews to assess the progress of your succession plan and confirm it aligns with shifting business priorities. Use performance reviews as an opportunity to discuss career paths, consult relevant data, and gather ongoing feedback from employees. Succession planning should always consider individual strengths and talents, so these check-ins are crucial for tailoring the plan to meet both professional development goals and organisational needs.

8) Update Your Plan Regularly

Succession planning is an ongoing process, not a one-off task. Regularly review and update the plan to reflect company changes, emerging trends, and shifting goals. Incorporate tools like employee surveys, 360-degree feedback, and upward feedback to gather insights from all levels of the organisation. This comprehensive approach helps keep the plan responsive to both employee development needs and business objectives.

Challenges to Watch Out For in Succession Planning

Avoid Bias in Decision-Making

A common challenge in succession planning is the tendency to select candidates who mirror current leaders, either in background or style. This can limit the pool of potential talent and overlook diverse skills and perspectives. To reduce bias, it’s important to use objective performance metrics and structured evaluation methods to make more informed, fair decisions.

Be Cautious of the ‘Peter Principle’

Promoting individuals based only on their success in their current role can result in a mismatch between their skills and the demands of the new role. The Peter Principle suggests that people are often promoted to their level of incompetence. To avoid this, focus on identifying potential and the specific skills needed for future roles, rather than simply relying on past performance.

Align Role Needs with Employee Potential

Not every high-performing employee is suited for every promotion, so it’s crucial to match employees’ skills and growth potential with the specific requirements of each role. A tailored approach to succession planning helps make sure the right people are prepared for the right positions, setting them up for greater success in their new roles.

Don’t Over-Rely on External Hires

While hiring external talent can bring fresh ideas and new perspectives, over-relying on this approach can harm internal morale and slow down employee development. It’s important to balance the development of internal talent with external recruitment to maintain a strong, motivated workforce while still allowing room for new viewpoints.

Unlock Future Success with emPerform’s Succession Planning Tool

Prepare your organisation for the future with our integrated nine-box talent matrix, designed to identify top talent and future leaders effortlessly. By incorporating talent assessments into performance reviews, emPerform helps you gauge employee potential, compare performance, and plan effectively.

With built-in tools like promotion readiness reports, competency gap analysis, and historical performance tracking, you can centralise and simplify succession planning. Draw on data from performance reviews, 360° feedback, and surveys to make informed decisions and guarantee fairness.

Best of all, the powerful nine-box talent matrix is included at no additional cost, giving HR and leaders everything they need to assess talent and track development, all in one place.

Secure Your Business’s Future: Begin Succession Planning Now!

Succession planning is a vital strategy for securing your business’s stability and growth. By focusing on preparing employees for critical roles, you can minimise risks, retain talent, and build a capable team that is ready to handle future challenges.

When supported by reliable data and consistent processes, succession planning creates transparency and clarity for employees, helping them understand the path to career progression while ensuring that promotions are well-earned and aligned with organisational needs.

No matter the size of your team, emPerform equips you with the tools to simplify and centralise succession planning. With the right tools and a clear plan, your business can confidently navigate change and achieve long-term prosperity.

Book a FREE demo today or contact us for any advice on performance management.