What is succession planning? A complete guide

Succession planning is a proactive process that identifies and develops employees to fill key leadership positions within a business or organization. It involves planning for the future by identifying potential candidates and creating a strategy to develop their skills and knowledge to prepare them for leadership roles. When the global pandemic brought workplaces to a halt, many organizations acknowledged an increased need for organizational resilience, with McKinsey consulting claiming that organizations need to radically rethink their workforce planning. Succession planning is crucial for organizational success as it ensures continuity in leadership, reduces risks associated with leadership transitions, and supports business growth and sustainability. 

At Thomas, we have been conducting research into people performance and developing people insights software since the inception of psychometric solutions more than forty years ago, to help organizations like yours identify natural leadership qualities, understand the effect of personality traits on a team, and gain a 360-degree view of your people development needs. Today’s fast paced business environment requires organizations to rapidly upskill their people and build robust talent pipelines, so we’ve brought together some of our experts’ knowledge to share with you.

This guide will cover the importance of succession planning, the steps involved in creating a succession plan, such as identifying key positions, assessing current employees, and developing a training and development plan. We will also discuss how to implement and maintain a successful plan by tracking progress, monitoring potential candidates, and adjusting the plan as needed.

What is succession planning?

Succession planning is a process of identifying and developing internal staff to fill key positions in a company, ensuring a smooth transition of leadership when new resource requirements arise. It involves evaluating the skills and abilities of current employees and preparing them to take on future roles, enabling organizations to fill key positions with qualified candidates who are already familiar with the company's culture, values, and goals. Succession planning is a strategic approach that ensures that companies have the right people in the right positions at the right time.

The aims of succession planning are to develop a pipeline of internal talent who can fill key positions in the company, reducing the need for external recruitment. Succession planning aims to identify employees with the potential to take on leadership roles and develop their skills and abilities to prepare them for future opportunities. By developing internal talent, organizations can reduce the costs associated with external recruitment, such as advertising, interviewing, and training costs. Additionally, internal candidates already have a strong understanding of the organization's culture, processes, and values, which can result in a faster transition and more effective leadership.

Succession planning is a critical process that enables organizations to identify and develop internal talent to fill key positions, ensuring a smooth transition of leadership and reducing the need for external recruitment. Succession planning involves evaluating current employees, developing a training and development plan, and monitoring progress to ensure that the organization has a pipeline of qualified candidates to fill key positions. By developing internal talent, organizations can save costs associated with external recruitment, ensure a smooth leadership transition, and improve overall organizational performance.

Why is a succession plan important for businesses?

Succession planning is critical for organizations to prepare for future leadership needs and ensure a smooth transition of leadership when necessary. Succession planning reduces the risk of losing critical knowledge and expertize when key employees leave the company. It also helps to develop and retain internal talent, which can lead to higher employee engagement and job satisfaction. Succession planning can also help to reduce the cost of recruitment by developing and promoting internal staff instead of hiring externally.

By developing a pool of potential leaders, organizations can ensure that they have the right people in the right positions at the right time, reducing the risk of disruption in operations. Succession planning is a proactive approach to managing the talent pool, ensuring the continuity of business operations and growth. It helps organizations to identify and develop the necessary skills and competencies required for future leadership positions. 

Moreover, succession planning ensures that businesses have a robust leadership pipeline that is ready to fill critical positions in a timely manner. Succession planning also ensures that businesses have a diverse and inclusive leadership team that represents the company's values, mission, and culture. In conclusion, succession planning is essential for businesses and organizations to prepare for the future and ensure a smooth transition of leadership. It helps to reduce risk, develop internal talent, reduce costs, and ensure continuity of business operations and growth.

What are the key benefits of succession planning?

Succession planning is a proactive approach to developing and retaining top talent within an organization. It involves identifying and developing internal staff who have the potential to fill key positions in the future, ensuring that the organization can continue to operate smoothly and grow, even when key individuals leave.

Business insurance

Think of succession planning as business insurance. Any top talent can be lured away to another company or can just leave, making it smart to have a plan in place to ensure there are other candidates who can take on that role. Succession planning also helps identify future leaders by finding the positions that are most critical to the future success of the company and the internal candidates with the values, skills, and desire to take on those positions.

Structured development 

One of the benefits of succession planning is that it structures development and training. By finding potential successors early, you will have time to develop a training and development program to ensure that they have the skills required to take on certain roles in advance. This will also motivate other employees to work hard, as they will want the opportunity to develop.

Preservation of brand identity

Maintaining brand identity is another significant benefit of succession planning. By creating an internal succession plan, you get people from within your business moving up and maintaining the brand identity, the company culture, and its core values. This ensures that the organization's culture remains consistent, even when leadership changes.

Cost efficacy

Succession planning also cuts recruitment and onboarding costs. By promoting internally, there is less need for onboarding, and the high costs of recruitment are reduced. Finally, succession planning increases engagement. Employees who know there are growth and opportunity awaiting will receive a self-esteem boost, resulting in a more engaged workforce.

What are the four stages of in a strong succession planning format?

Aptitude tests are scored and marked using various methods, depending on the type of test and its objectives. For example, some tests are scored based on the number of correct answers, while others take into account factors such as speed, accuracy, or problem-solving skills. The most common scoring methods include percentile ranking, standard deviation, and raw scores. Percentile ranking compares a candidate's score with others who have taken the same test, while standard deviation measures how closely a candidate's score aligns with the average score of the test takers. Raw scores, on the other hand, are based on the total number of correct answers.

To interpret results, it is important to have a clear understanding of the scoring method used and what the scores mean for the particular test. It is also essential to consider other factors, such as the candidate's experience, qualifications, and soft skills, when evaluating and comparing test scores. One best practice is to establish a benchmark for what constitutes a successful score for the specific role or position, based on the requirements and responsibilities of the job. Comparing candidates' scores against this benchmark can help identify the best candidates for the role. It is also important to remember that aptitude tests are only one aspect of the recruitment process and should be used in conjunction with other factors, such as interviews, resumes, and references, to make informed decisions about candidates.

1. Initiating the succession planning process

The initial stage of succession planning involves identifying the need for succession planning and making a commitment to implement it. This may involve assessing the organization's leadership needs and the potential risks associated with key personnel leaving the company. Once the need for succession planning has been established, the next step is to establish a team or committee to oversee the succession planning process. This team will be responsible for identifying key positions within the organization, assessing current employees, and developing a training and development plan to prepare potential successors for leadership roles.

It is also important to communicate the need and benefits of succession planning to relevant stakeholders, such as senior management, HR, and employees. This can help to gain buy-in and support for the process, and ensure that all stakeholders understand the importance of succession planning and their role in the process. Effective communication can also help to manage expectations and address any concerns or misconceptions about the process. In conclusion, the initial stage of succession planning involves identifying the need, establishing a team, and communicating the need and benefits of the process to stakeholders.

2. Selection of key positions and high potential employees

The second phase of succession planning involves identifying key positions within the organization, assessing the current talent pool, evaluating potential successors, and creating a development and training plan to prepare them for leadership roles. The selection process may involve determining the required competencies and behaviors for each key position and identifying high-potential employees who could potentially fill key positions in the future. Once potential successors have been identified, the next step is to evaluate their readiness and potential to take on key leadership roles.

Internal talent evaluation can involve assessing their current skills and experience, as well as their potential to develop the necessary competencies and behaviors required for leadership positions. It is also important to consider factors such as their motivation, engagement, and fit with the organization's culture and values. The assessment process should be based on objective criteria and conducted in a fair and consistent manner to ensure that all potential successors have an equal opportunity to be evaluated. Once the assessment process is complete, the organization is ready to take the next steps in creating a succession plan that outlines the development and training required for potential successors to prepare them for leadership roles. 

3. Developing high potential successors

Once potential successors have been identified, the next step is to create a personal development plan for each individual to ensure that potential successors have the necessary skills, knowledge, and experience to succeed in future leadership roles, ensuring the continuity of the organization's success. Creating development plans involves assessing high potential employees’ current skills and experience and identifying the training and development opportunities required to prepare them for future leadership roles. This may look like formal training, such as courses or workshops, or on-the-job training, such as mentoring or coaching. 

Creating opportunities for successors to gain experience through job shadowing or stretch assignments is another effective way to develop their skills and build their confidence. This can help to expose them to different parts of the business and develop a broader understanding of the organization's operations. Feedback and coaching are also essential to support the development of successors. Regular feedback can help to identify areas for improvement and reinforce positive behaviors. Coaching can also help to develop specific skills, such as communication or leadership, and provide support and guidance as successors navigate their development journey.

4. Transitioning successors into leadership positions 

Transitioning successors into key positions within an organization is a critical step in ensuring the continuity of business operations and growth. Once a successor has been identified and developed, it is important to carefully manage the transition process to ensure a smooth handover of responsibilities. 

This involves providing ongoing support and training to the new leader to ensure they have the necessary skills, knowledge, and support to succeed in their new role. This support may include coaching, mentoring, and providing access to resources and tools to help them succeed. It is also important to establish clear expectations and goals for the new leader to help them navigate their new role effectively. Transitioning successors into key positions requires careful planning, ongoing support, and a commitment to continuous improvement.

Evaluation of your business’ succession plan is also crucial to ensure its effectiveness and make necessary adjustments for future success. You may want to collect feedback from the new leader, stakeholders, and other relevant parties to identify strengths and areas for improvement in the succession planning process. Adjustments can then be implemented, such as refining the selection process for potential successors, improving training and development programs, or modifying the transition process to better support new leaders.

Implementing succession planning successfully is a substantial piece of work, but by investing in the development of internal talent, organizations can ensure the continuity of business operations and growth, while also boosting employee engagement and retention.

What tools are used for succession planning?

It is important to note that succession planning is not a simple process, and it involves various challenges. Despite what some people may think, it is a strategic process that necessitates a great deal of consideration. During the pandemic, businesses of all sizes began to recognize the importance of succession planning due to the impact that abrupt changes can have on a company. It is critical to be prepared to transfer ownership to new leaders who can guide the company in a new direction. Although selecting the appropriate leaders is not always enough, the absence of a plan can create additional problems when a decision needs to be made. To ensure that businesses can adapt and have a plan in place, they require a succession planning toolkit. This toolkit helps to identify any potential gaps in succession and allows for the planning of future staffing needs. This is achieved by clarifying the role and measuring values, attainment, and perseverance, which enables informed decisions to be made.

We will now review the tools that organizations have available to help them deliver objective, fair and effective succession planning programs. 

Technical assessments 

Technical assessments are evaluations that measure an employee's knowledge, skills, and abilities in a specific area or field. They are a critical component of a succession planning process as they assist in identifying potential successors for key roles within an organization. Technical assessments can provide valuable insight into an employee's strengths and weaknesses, helping to identify areas where training or development may be necessary.

In a succession planning process, technical assessments can be used to identify individuals who have the necessary skills and knowledge to fill critical roles within the organization. These assessments can be used to evaluate an employee's ability to perform tasks, solve problems, and make decisions in a specific area. Technical assessments can also be used to identify employees who may need additional training or development to prepare them for future roles.

• Aptitude tests 

An aptitude test is a tool used to evaluate a candidate's potential to perform in a particular role. These tests measure a candidate's cognitive abilities, such as numerical, verbal, logical, and spatial reasoning. They are designed to assess the candidate's potential to learn and adapt to new tasks and situations in a specific field. The results of aptitude tests can be used to determine the candidate's strengths and weaknesses, and to identify areas where further training or development may be necessary. Aptitude tests are an effective way for employers to assess a candidate's potential to succeed in a particular role.

• Behavioral tools 

Behavioral assessments are a type of tool used to evaluate a candidate's behavior and personality traits. They are used to assess qualities such as emotional intelligence, work style, and communication skills. These assessments can include a variety of tools, such as personality tests, situational judgment tests, and simulations. The results of these assessments can provide insights into how a candidate is likely to behave in certain situations, how they will work with others, and their potential for success in a particular role. Overall, behavioral assessments can be valuable tools for employers in identifying candidates who have the personality traits and behavioral tendencies necessary for success in a given role.

• Personality assessments 

Personality assessments are tools used to evaluate a candidate's personality traits, values, and interests. These assessments are designed to identify the candidate's behavioral tendencies and may be used to predict their fit for a particular job and potential for success in that role. By understanding a candidate's personality, employers can identify their strengths and weaknesses, assess how they will interact with colleagues, and determine if they align with the company culture. Overall, personality assessments can be a valuable tool in the hiring process, helping employers to identify candidates who are the best fit for a particular role and the company culture.

• 360-degree feedback

360-degree feedback is a tool used to evaluate an employee's performance and potential by gathering feedback from a range of sources including their peers, subordinates, and superiors. This tool provides a comprehensive view of an employee's strengths and weaknesses, as well as areas for improvement. By collecting feedback from multiple sources, 360-degree feedback can provide a well-rounded view of an employee's performance and potential, helping them to identify areas for development and growth. Overall, 360-degree feedback can be a useful tool for companies to support employee development, improve performance, and drive organizational success.

How to develop a succession planning process

Finding the right individuals to lead your organization is critical to business success and competitiveness. But with the average tenure of a C-suite leader ranging from 3-8 years, effective succession planning can be the difference between continued success or potential failure. Succession planning isn’t a one-time activity, rather it’s an ongoing process that provides a safeguard in the event of an unexpected departure, a transition plan for a managed handover, and a method for developing a pipeline of leadership talent.

Create a strategy for identifying and developing future leaders at your company – at all levels. Make sure you have plans in place to address the inevitable changes that occur when employees leave – by training high-potential workers for advancement into key roles. Instilling a succession planning model into your HR function protects your assets within the business and prepares you for the time when key players will inevitably depart. Understanding the value of leadership development and succession planning gives organizations the strength of business continuity with minimal interruption, positioning them for a stronger outcome.

Below are the key steps for how to develop a succession planning process for your organisation so you can begin preparing for the future:

Identify your future needs

To develop a successful succession planning process for your business, it is important to identify your organization's needs. First, it is crucial to assess the company's long-term goals and objectives to understand the direction in which the organization is moving. Next, it is essential to identify the key positions that will need to be filled in the future and the timeframe in which they are likely to become vacant. 

Once these positions have been identified, it is necessary to determine the skills and knowledge required to fill these positions. This can involve a review of the job description, qualifications, and experience of the current position holder, as well as an evaluation of the competencies required for the role. By identifying the business' needs, organizations can develop a succession plan that aligns with their goals, helps to identify future leaders, and ensures the continuity of the business.

Identify key positions, competencies and behaviors

To identify key roles, competencies, and behaviors in a succession planning process, there are several steps that organizations can take. Firstly, it is essential to identify the key roles within the organization that are critical to its success. These may include roles that are responsible for driving revenue, managing key projects, or leading teams. 

Once these roles have been identified, it is important to define the competencies and behaviors required for each role. This can include technical skills, leadership abilities, communication skills, and emotional intelligence. To evaluate the current employees who hold those positions and assess their potential for advancement, organizations can use a range of tools, such as performance evaluations, 360-degree feedback, and assessments. This can help to identify high-potential employees who have the necessary competencies and behaviors to succeed in key roles, as well as any areas where additional development or training may be required. 

Select high potential candidates and invite them to participate

Selecting high-potential employees is a critical step in developing a succession plan. To identify these employees, organizations should consider a range of factors, including performance evaluations, 360-degree feedback, and assessments of key competencies and behaviors. 

Once potential employees have been identified, it is important to invite them to participate in the succession planning process. This can involve discussions about their career aspirations, their current skills and abilities, and any potential development opportunities. Career path and succession planning are intrinsically tied. Succession planning isn’t just about reacting to a senior person leaving. It should also be a continuous investment and process that reaps rewards for your existing employees and prospective hires. By outlining the clear path for opportunities that exist within your organization, you are likely to discover ambitious and suitable applicants that meet your criteria while also increasing employee engagement.

By involving employees in the succession planning process, organizations can provide them with a clear understanding of the skills and competencies required for key roles and support their career development. Additionally, these discussions can help to identify any potential gaps in skills or experience that may need to be addressed through training or development opportunities.

Assess for high potential and performance

To effectively evaluate employee potential and performance, organizations can use a combination of assessments. Aptitude tests can be used to evaluate an employee's cognitive abilities and potential to learn and adapt to new tasks and situations in a specific field. Behavioral tools, such as personality tests and situational judgment tests, can provide valuable insights into an employee's behavioral tendencies, work style, and communication skills. Additionally, personality assessments can help to identify employees who have the personality traits necessary for success in a particular role.

To further assess performance, organizations can use performance data to identify employees who consistently demonstrate high performance. This can include data from employee evaluations, sales reports, and customer feedback. By identifying employees who consistently demonstrate high performance, organizations can identify potential candidates for future leadership roles. Using a combination of assessments and performance data can help organizations to effectively evaluate employee potential and performance, identify high-potential employees, and develop a pipeline of future leaders. By developing a robust succession planning process, organizations can ensure the continuity of critical roles and support the growth and development of employees.

Select training and development activities

Organizations should identify training and development opportunities that align with the company's goals and objectives. This can involve providing employees with opportunities to develop the competencies and behaviors required for key positions, as well as supporting their career aspirations. To achieve this, organizations can consider a range of options, including stretch projects, formal training, executive coaching, and accelerated leadership programs. 

Stretch projects can provide employees with opportunities to work on projects outside of their comfort zone and develop new skills. Formal training can help employees to develop specific technical skills or competencies. Executive coaching can provide one-on-one support for employees to develop their leadership skills, while accelerated leadership programs can prepare employees for future leadership roles within the organization. By identifying training and development needs and opportunities, organizations can support the growth and development of employees, ensure the continuity of critical roles, and develop a pipeline of highly capable future leaders.

Implement a personal development plan

Implementing a personal development plan can help employees to achieve their career goals and support the growth and development of the organization. To create a successful personal development plan, employers should work with employees to identify their goals and objectives. This can involve discussing career aspirations, skills gaps, and areas for improvement. Once goals have been identified, employers can work with employees to identify the training and development activities required to achieve these goals. This can involve identifying stretch projects, formal training, executive coaching, and accelerated leadership programs. To monitor progress towards these goals, employers should set regular check-ins to review progress and adjust the development plan as necessary. 

Stretch projects

Stretch projects are a powerful tool for developing high-potential employees and preparing them for future leadership roles within an organization. These projects are typically more challenging and complex than an employee's regular job duties and require them to stretch beyond their comfort zone. By taking on these projects, employees are exposed to new skills, knowledge, and experiences that can help them to develop the competencies and behaviors required for leadership roles. Stretch projects can also provide employees with opportunities to work with different teams, build their networks, and gain exposure to different areas of the organization. 

Formal training 

Formal training, such as leadership development programs, can play a critical role in developing the skills necessary for leadership roles. These programs are designed to provide employees with the knowledge, skills, and tools required to lead teams and drive business success. By participating in formal training, employees can develop a range of competencies, including communication skills, strategic thinking, problem-solving, and emotional intelligence. Additionally, leadership development programs can provide employees with exposure to different leadership styles, best practices, and real-world case studies. This can help employees to build their confidence and develop their leadership skills. 

Executive coaching 

Executive coaching is a personalized approach to leadership development that provides one-on-one support for individuals in leadership roles. Through executive coaching, leaders can work with a professional coach to identify their strengths, weaknesses, and areas for improvement, like executive development consultancies Live and Learn and Zentano Group. 

Executive coaching can involve exploring leadership styles, communication skills, problem-solving abilities, and emotional intelligence. By working with an executive coach, leaders can receive personalized support and guidance on how to develop their skills, build their confidence, and overcome challenges. Executive coaching can also provide leaders with opportunities to receive feedback, reflect on their experiences, and gain new insights into their leadership style. 

Accelerated leadership programs

Accelerated leadership programs, such as the leadership development program at Danamon bank, are intensive training and development programs designed to prepare high-potential employees for leadership roles within an organization. These programs provide employees with opportunities to develop key competencies and behaviors required for leadership roles, such as strategic thinking, problem-solving, communication, and emotional intelligence. Additionally, accelerated leadership programs often involve exposure to senior leaders, experiential learning, and networking opportunities. This can help employees to build their confidence, gain exposure to different areas of the organization, and build their networks. By participating in accelerated leadership programs, high-potential employees can accelerate their growth and development, increase their engagement and job satisfaction, and prepare themselves for future leadership roles.

Monitor and evaluate

Monitoring and evaluating the effectiveness of the succession planning process is crucial to ensure that the organization is achieving its objectives and preparing for future success. By monitoring the process, organizations can assess whether the goals and objectives of the succession planning process are being met, identify areas for improvement, and make necessary adjustments. But how should organizations understand success?

Academic achievement as a measurement of success has taken more of a back seat recently, in favor of using general intelligence and conscientious personality traits as predictors of job success. The role of emotional intelligence as a critical leadership skill has also received considerable attention over the past few years. Managing the evaluation and review of your succession planning template can be managed through means of panel reviews or assessment centers. It’s important to note this should remain flexible and appropriate throughout the entire process to ensure it is effective and efficient.

Thomas has a range of psychological tests and assessments which can be used to measure these characteristics:

• Aptitude assessment (GIA) – measures the ability to hold and reason with new information, and solve problems with instructions
• Emotional Intelligence assessment (TEIQue) – helps understand personalities and how best to interact with others to achieve goals
• Workplace Personality assessment (HPTI) – benchmarks against six key traits, analysing approaches to leadership and where there may be room for improvement. 

Monitoring and evaluating the succession planning process can help organizations to assess the return on investment of the plan and make necessary adjustments to ensure that it is aligned with the long-term goals of the organization as the landscape continues to change.

Internal staff development vs external recruitment

The importance of a solid succession plan is clear: to avoid potential risk caused by business-critical employees exiting the company. The next question is often around whether you should hire a successor externally, or nurture one internally.

This decision will depend on a variety of factors, ranging from the cost of an external hire versus developing internal talent, to the time spent with a vacant role, the necessary training, or whether the candidate is the right fit.

Finding the ‘right fit’

Many organizations still focus on identifying candidates who fit their culture. However, this can limit workforce diversity and it is better to focus on finding the right fit for a role and team. When an employee fits well with their role, they are more likely to be engaged, motivated, and productive. In contrast, a poor fit can lead to lower productivity, higher turnover rates, and even negative effects on the company culture itself. 

Businesses can take two approaches to achieving the right fit: internal staff development and external recruitment. Internal staff development involves investing in current employees by providing training, development opportunities, and career progression pathways. This approach can result in employees who are loyal to the company and have a deep understanding of its culture. External recruitment involves attracting candidates from outside the organization who possess complementary skills, experience, and personality traits that align with the company culture. Combining both approaches can lead to a well-rounded and diverse workforce whose skills and personal motivation are strongly aligned with the objectives of the organization.

It takes time to train the right people... 

Training the right successors for key roles in your organization is a crucial though time-consuming process. Even if you have a perfect succession plan in place, you will rarely achieve a smooth transition, regardless of where you choose to hire from. According to a study by the Center for American Progress (CAP), the average cost to a business in the time between a mission-critical employee leaving, such as a top executive, and their successor reaching peak effectiveness in their new role can be up to 213% of their annual salary. 

The time it takes an employee to reach optimal productivity will depend on the speed with which they learn new information, their professional background and the sector they have come from. If they have moved firms in the same sector, the time spent on training will be far less significant compared to taking on a recent graduate, for example. As technology advances ever quicker, organizations need to be able to develop their people more efficiently. It is essential to invest in the recruitment and training of new and existing employees to ensure they have the necessary skills and knowledge to perform their role successfully. This will minimize the disruption caused by the departure of key employees and ensure a smooth transition for the organization.

...And the same goes for training internal talent 

Upskilling internal talent is a crucial component of any succession plan. Preparing internal talent for business-critical positions can still be expensive and time-consuming. Whether you choose to send employees on courses or hire an internal trainer, you will likely incur significant costs. However, investing in upskilling internal talent can bring numerous benefits to the organization. Development can lead to increased employee satisfaction, higher retention rates, and improved productivity. Additionally, employees who have been trained in-house are more likely to have a deep understanding of the company culture and values. 

When considering upskilling internal talent, it is essential to calculate the cost implications and return on investment (ROI) for every option. While a great internal, semi-autonomous training course can have organization-wide benefits, it is important to weigh the costs of the program against the potential benefits. One option to consider is to identify high-potential employees who have the necessary skills and interest in the business-critical positions and invest in their training and development. This approach can be more cost-effective than hiring external candidates or bringing in consultants to train existing employees. 

Developing internal talent within a succession plan is a valuable investment for any organization. However, it is crucial to consider the cost implications and ROI of any upskilling program to ensure that the investment is worthwhile. By investing in internal talent however, businesses can ensure they have a deep bench of skilled employees ready to step into critical roles, improving their resilience and longevity.

Talent management programs drive business value 

Effective talent management programs are essential for driving business value and ensuring the long-term success of an organization. Talent management programs encompass a range of activities, including recruitment, training and development, performance management, and succession planning. One key benefit of effective talent management is that it can help to drive business value. By having a skilled and engaged workforce, organizations can increase productivity, reduce costs, and improve innovation. Additionally, effective talent management can help to reduce employee turnover, which can be expensive for organizations in terms of recruitment and training costs.

Talent management programs also play a vital role in ensuring the long-term success of an organization. By investing in the development of their employees, organizations can create a culture of continuous learning and development, which can help them to stay ahead of the competition. Additionally, by identifying and developing future leaders, organizations can ensure a smooth transition of leadership and maintain business continuity. Effective talent management programs are critical for ensuring the long-term success of an organization. By focusing on attracting, developing, and retaining the best talent, organizations can create a competitive advantage, increase productivity, and achieve long-term sustainability.

Employee engagement matters 

Recent LinkedIn polls found that employee engagement is currently a top priority for both HR leaders and senior executives, with a Gallup study finding that for every engaged employee, there are two disengaged employees. Employee engagement is a crucial factor in retaining high-potential employees within an organization. Engaged employees are those who are emotionally committed to their work, feel a sense of purpose, and are willing to go the extra mile to achieve their goals. Employee engagement is essential because it impacts organizational productivity, profitability, and overall success.

High-potential employees are typically those who have the skills, knowledge, and motivation to become future leaders within the organization. These employees are critical to the success of the organization because they are often the driving force behind innovation and growth. However, if they become disengaged, they may look for opportunities elsewhere, which can lead to significant costs in terms of recruitment, training, and lost productivity. Engaged high-potential employees are more likely to stay with the organization and contribute to its success. Engaged employees are more productive, more innovative, and more likely to take on new challenges. They are also more likely to support the goals and values of the organization, which can help to create a strong culture and sense of purpose.

To retain high-potential employees, organizations need to prioritize employee engagement. This can only be achieved by taking a holistic approach to talent management but includes initiatives such as understanding what motivates their people, providing opportunities for professional development, offering competitive compensation packages, and creating a positive work environment. By investing in employee engagement, organizations can create a culture that supports the growth and development of high-potential employees, which is essential for long-term success.

There’s no ‘right way’ to approach recruitment 

Recruitment and succession planning are critical activities for any organization, and it's essential to recognize that there is no one-size-fits-all approach. The approach that works for one organization may not be the best fit for another. Recruitment and succession planning should be tailored to meet the specific needs of the organization, taking into account factors such as the company culture, industry, and future goals. 

To create a successful recruitment and succession plan, organizations must consider the unique skills and qualities required for each role, as well as the organizational culture and values. In addition, organizations must consider the current and future needs of the business when planning for succession, ensuring that they have a pipeline of skilled and motivated employees who can step into critical roles. 

By tailoring recruitment and succession planning to meet the specific needs of the organization, companies can create a competitive advantage by attracting and retaining the best talent. Additionally, by investing in the development of employees, organizations can create a culture of continuous learning and development, which is essential for long-term success. Ultimately, successful recruitment and succession planning require a customized approach that takes into account the unique needs of the organization.

When to recruit internally 

• Promising employees already exist within the company who could do the job
• Plenty of notice has been given by the outgoing employee
• Your company is thriving, and you have the capacity for people to move roles
• You have an abundance of skills and experience among your workforce
• Minimal on-boarding and training is required for the role transition 

When to recruit externally

• You already have a great candidate in mind who can fill the role quickly
• You have a tight deadline to fill the position
• When the stability of the internal structure is delicate and shifting employees may cause trouble
• There isn’t a strong succession plan in place yet, and time constraints make it difficult to create one quickly
• The required skills and experience aren’t available
• You want a fresh perspective in the role
• You have an effective training plan in place to onboard the new hire

Succession planning in summary

Succession planning is vital to business success. It recognizes the value of key roles within the business functions, the importance of knowledge and skills within your talent pool and prepares you for the inevitable departure of staff to ensure the resilience, brand integrity and sustainability of your business in the long term.

Succession plans prevent organizations being let down by resource gaps by providing a model to quickly and effectively fill a position. This reduces recruitment and onboarding costs and protects your business by ensuring there are an abundance of resources for filling crucial leadership and management roles within your company. It also helps to motivate your existing employees and promote a culture of continuous development and excellence.

The absence of succession planning can decrease business efficacy and damage your organization’s ability to achieve its objectives. It can leave you with gaps in knowledge, expertize and talent that detract from the value your organization offers its stakeholders – from customers to employees and board members. Understanding the importance and significance of succession plans within your organization can save you from the potentially disastrous effects that losing key staff can have. 

If you take a proactive approach to make sure you can replace vital knowledge and skills when someone leaves your organization, your business stands to gain a real advantage. At Thomas, we use scientifically proven processes to help organizations like yours tackle the challenges of succession planning – both today and tomorrow.

To see how we can help you be prepared for key people leaving or if you have any questions that aren’t covered here, get in touch with one of our experts.