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Everything You Need to Know About Succession Planning

employees around a table

Whether your organization is large or small, a start-up or an established entity, employees will come and go. When someone leaves your business, it’s important to retain all the knowledge they accrued over time and to plan for someone else to be able to step into their role. This is called succession planning, and it’s integral to preventing knowledge loss and maintaining normal business operations in the face of employee turnover.

If you don’t have a succession plan in place just yet, read on to learn about the steps you should take to develop a plan and ensure its success.

The Basics

At its heart, succession planning is about developing new leaders in your organization before you ever need them to fill a vacant role. Failing to prepare in this way could mean an inability to fill a role internally, necessitating a lengthy – and costly – search outside your company. By focusing on knowledge sharing and leadership development, however, you can avoid this fate by knowing you have employees ready to step into senior roles when needed.

How to Get Started

Succession planning takes an ongoing, thoughtful, long-term effort. In other words, it can’t be accomplished overnight. However, focusing on these three steps will allow you to set your organization up for continued success.

Step 1: Understand what Knowledge You Need to Retain

Before you can begin developing your future leaders and sharing knowledge across generations in your company, you need to identify that which you cannot afford to lose. This might include crucial knowledge, skills, relationships or organizational practices. If the process feels daunting, it may help to revisit your company’s core values. Ask yourself what knowledge is of the utmost importance to retain and what skills are most difficult to replace. In other words, what critical elements are necessary to keep your business running day today?

Step 2: Identify Which Employees Would be Most Difficult to Replace

Of course, you value everyone on your team, and they are all important to successful business operations. However, once you’ve identified the elements of your operation that are most critical to retain, you’ll likely also identify specific individuals whose roles would be most difficult to fill. Oftentimes, this could be your senior leaders or other individuals who have been in their positions for many years and have considerable institutional knowledge. However, you may also identify younger individuals in less senior roles who are responsible for processes or procedures that are unique to your company.

Step 3: Bridge the Talent Gap

Now that you’ve focused on understanding the knowledge, skills, and people integral to your company’s success, you need to start the important work of planning to retain as much as possible. This happens in two equal measures: retaining your current employees and deftly replacing them if they leave your organization. Rather than waiting until someone is on the verge of retirement or is recruited by a competitor, think of your succession planning as something that happens over the entire course of an employee’s time with you. Here are a few ways to do it:

  • Onboarding and Initial Training

Make sure you are preparing your employees for their roles thoroughly and completely. This includes ensuring that the onboarding process isn’t just about paperwork, but that it truly covers all their responsibilities and identifies any existing gaps in their knowledge or skills. This type of thorough onboarding allows you to make plans to supplement an employee’s initial training where needed and help each individual employee further develop in ways that will allow them to be successful. This is important to succession planning in two ways. Firstly, it allows you to identify where your talent pool may be lacking. Secondly, it ensures you’re focusing on your team’s needs, and employees who are set up for success will likely stay with your company longer.

  • Professional and Personal Development

It’s easy to let your employees complete their day-to-day tasks to keep business running smoothly, but don’t lose sight of the bigger picture. It is critical to offer your employees continuous opportunities for development throughout their time with your company. Offering ways to improve their skills, industry knowledge or leadership potential will further engage them in the work they’re doing and lead to a longer tenure within your organization. As far as succession planning goes, this process also ensures you have people who are primed to take over every integral role in your organization. As you notice stand-out employees, take the time to groom them for future leadership roles by offering them training and experience long before a vacancy emerges.

  • Career Conversations

You hire people into roles you need them to fill, but many of your employees will have ambitions well beyond their current responsibilities. Foster open discussions with your team members about their career goals so you can gain an understanding of what motivates them and provide future opportunities when they arise. When it comes to retaining talent for as long as possible, it behooves you to provide avenues for growth within your organization. Many people will naturally our-grow their roles at some point – keep them from leaving your company by thinking ahead about new projects that might match their career ambitions and their developing skillsets.

  • Replacement Planning

This is the bread and butter of succession planning – having plans in place to proactively replace talent when people retire or leave your company. What you want to avoid is having to take a reactive approach to fill a vacancy. So, you should continually assess your internal candidates, both for future leadership roles and for those less-senior roles that are difficult to replace. Use other trusted members of your organization to help you through this process. When you identify these employees, gauge their abilities by handing off special projects and challenging them from time to time. You can even create mentoring relationships for them with senior-level employees. These are valuable exercises because they will show you who is ready and willing to step up to the plate – and, just as importantly, who isn’t. Having future leaders in your organization’s pipeline ensures you can proactively fill roles and keep transitions as smooth as possible.

Succession Planning is a Competitive Advantage

Every company faces turnover, but you can “future-proof” your business through ongoing succession planning. In doing so, you ensure that your company retains the knowledge, skills and expertise needed to achieve your short-term and long-term goals and to drive future growth. In this way, a thorough succession plan is a significant competitive advantage for your business and a driver of your future success.

If you don’t have a succession plan in place yet, consider beginning the process as soon as possible. After all, the future success of your business may depend on it.

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WellAcre Global Wealth Advisors is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where WellAcre Global Wealth Advisors and its representatives are properly licensed or exempt from licensure.  This website is solely for informational purposes.  Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by WellAcre Global Wealth Advisors unless a client service agreement is in place.