Succession Planning is about identifying employees with high potential and talent to fill top management positions and lead teams when they are created or available. It is an important aspect of talent retention and included in workforce planning, wherein the employees feel rewarded and valued for their contribution and skills. Also called as replacement planning, it helps companies plan beforehand for the retirement or resignation of top executives and ensure business continuity.
To delve deep into the reasons for succession planning, it could be one of the following reasons:
Succession planning is not a one-time event. It is updated and revised each year based on the changing company requirements. Additionally, companies should have an emergency succession plan done in case of unanticipated change in leadership, and a long-term plan for those planned exits.
It depends on the size of the company and ownership. In large companies, it is usually the CEO, along with the board of directors. Shareholders would also have a say in this. In such companies, businesses usually train existing mid-level managers to take over the key responsibilities. In some cases, they might court outside talent too.
In family owned businesses and small companies, it is usually the next generation of the the family who are groomed to take over the family business.
When it comes to recruiting top management from outside, it is usually an already established and groomed employee. As for training existing employees, this could involve additional certifications, mentoring, and shadowing different positions. This would also involve cross-training to get a hands-on overall understanding of how businesses are run.
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