How succession planning can future-proof your company

Succession planning is not only a strategy for replacing executive and leadership roles when employees are promoted, leave or retire. It is about nurturing talent, boosting skillsets, and providing your staff with a clear career path that will encourage retention and company growth.

The process of identifying potential replacements for key members of staff is often seen as a low priority, with only 46% of UK businesses having a succession plan (or ‘replacement plan’) in place (Business Leader), yet it is essential to the future of your firm, whatever its size.

Who does succession planning affect?

Traditionally, only larger companies had succession models, which were often confidential, top-down, and focused almost entirely on C-suite roles. These days, in a time of skill and labour shortages, forward-thinking SMEs are also beginning to see the importance of making succession planning part of their business strategy.

Why spend the time and money on filling senior roles at the moment the post is vacant when developing your in-house talent to be the leaders of the future benefits everyone?

And while it is essential to the smooth running of any business to have a suitable CEO replacement or buyer lined up to take the reins, it is almost as critical to ensure other roles that are vital to the business’s daily operations have skilled and experienced employees primed and ready to fill their shoes too.

Who benefits from replacement planning?

Put simply, everyone. Everyone in the company benefits when there is a strong replacement strategy set out.

As the employer, by identifying business-critical roles, you reveal the company’s skills gaps and can work towards plugging them, thereby improving overall performance. You also have the peace of mind of knowing that, when a key member of staff leaves, someone has been trained and is ready to step up, leaving no key positions unfilled.

Equally, having a clear career path boosts employee morale, which makes for a happier and more productive workplace. Promoting knowledge transfer between experienced and junior members of staff, and encouraging training and development as part of the replacement strategy gives everyone a better-defined sense of purpose and achievement. It’s a great way to reward junior team members for their hard work and loyalty to the firm.

But let’s be realistic. Succession planning comes with no built-in guarantees.

What if the person you’ve identified as an ideal replacement isn’t interested in stepping up?  What if developing one member of staff to take on a role puts someone else’s nose out of joint who also wanted to be considered for the position?

These and other such issues can be mitigated provided you keep discussions open and fair, and follow your plan.  Rewarding disappointed staff in other ways by providing training in similar areas or setting them on an alternative career path may provide some conciliation by reaffirming their value to the firm.  Foreseeing problems such as these can be a helpful addition to your plan.

How to develop a succession plan

• Identify the potential staffing and skills gaps that will need filling or addressing. Influential factors might include unexpected departures, retirement, skills gaps or company growth
• Identify the roles that are critical to your business operations. You might want to focus on individual positions or a group of roles with a similar skillset
• Identify any qualifications or professional development needs for the future and incorporate them into your plan, e.g. AAT exams for accounting roles
• Make sure you align your replacement strategy with your company’s strategic plan. This will help to ensure success in both areas by having the right people in the right positions to take your business forward.  And being honest, open, and inclusive about such developments will help to make everyone feel empowered and keep them on board
• Consider making succession planning part of performance reviews. This will ensure that all key employees identified in the succession plan can track their progress on skill development and gain experience on a planned timeline
• Develop potential successors internally but also identify any needs for potential external candidates.

How does succession planning sit alongside external recruitment?

There are a great many benefits to developing leaders internally, as these potential successors are familiar with the company and can grow their skills and experience in line with any succession opportunities that arise.  However, should your company need to bring in external talent to replace a key member of staff, a good recruitment agency is well placed to find the perfect match.

Having a replacement plan in place can make your company more attractive to external candidates, appealing in particular to ambitious junior jobseekers who want a clear career path set out. When recruiting, think about how a potential candidate’s career might develop in your company and, in turn, how they might help your business to grow.

Have you considered apprenticeships? These are a perfect example of succession planning in action. Some 64% of apprentices stay with the same employer after qualifying (Simply Academy) and a third are promoted within their first year of work.

As a recruitment agency with our clients’ best interests at heart, we recommend that all employers consider the benefits of an apprenticeship to see if they would work for you, especially those who employ 10+ people.  They can be a cost-effective way of discovering and developing new talent and might kick start your succession plan.

Key Appointments also build long-term relationships with employers to help identify their future recruitment needs.  As an example, a few years ago we helped a chemical distributor to fully embrace succession planning by placing two people in their company with the right skills and attitudes to progress.  One candidate entered the firm as an accounts technician and has since been promoted to financial director.  Another was placed as sales office manager and is now operations director.  Whenever we are recruiting, we always make sure the ambitions and potential of the candidates we place match the succession and growth plans of the business we are working with.

We can help you too. Contact one of our friendly members of staff for an informal chat. You can call us on 0844 504 4666, drop us a line at info@key-appointments.co.uk or use our contact form.