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Definition of Succession planning:

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. 

Reasons for Succession Planning

To delve deep into the reasons for succession planning, it could be one of the following reasons:

  • Employees retire after reaching a certain age
  • Employees are promoted to a higher position in the company.
  • Employees are placed in new positions in the company, either at the same level or a higher level.
  • Employees leaving the job for a new role in another company.
  • Death of an employee.
     

Understanding the process of Succession Planning

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. 

Who is involved in Succession planning?

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.  

Recruitment and Training of new leaders

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. 

Benefits of Succession Planning

  • It provides a chance of career advancement for employees. They feel valued and appreciated for the work they do and provide job satisfaction. 
  • Help the companies plan beforehand about future opportunities and identify the right people for such roles. 
  • Gives time for managers and top management to mentor and train employees for the new role. 
  • It helps build the confidence of the investors, who would continue to hold their stocks with the company. 
  • It helps develop an exit strategy for business owners and CEOs and work on the business continuity plan and groom new leaders.

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