A good succession plan fills vacant leadership roles with current employees through a process that identifies and develops internal candidates to fill those vacancies. A successful succession plan will help the company boost retention rates by actively increasing employee engagement, in addition to recruiting and hiring superior employees to fill key roles in the company.
Implementing a succession plan into any company’s infrastructure, no matter the size, will ensure that their employees are constantly flourishing within the company. Of course, not only will this help the employees improve, a successful plan will create a fail-safe plan in the case of the company losing key employees, or expanding.
Effects on Company Hiring
According to a Leadership Development Factbook study,
only a little more than 60% of first-level managerial positions and 52% of senior positions are hired from within.
Why is this such a problem?
First of all, it costs a lot more to hire externally than to promote internally. In fact, an SHRM survey shows that the average cost per hire is about $4,129 whereas grooming an employee costs little to none. If you factor in all the growth that a current employee will gain, not only will this process cost you little, but you will be getting a lot back in return.
Second, internal hires already have pre-existing knowledge of both the role and organization, whereas hiring externally can often be time-consuming and difficult. You also run the risk of the external hire not adjusting to assimilate them into the culture of the company. By promoting from within, you are already choosing someone who has proven their loyalty and is well knowledged of the in and outs of the company.
So where does succession planning play into this? While developing successful future leaders internally takes time and effort, it’s a small investment for a huge long-term payoff. Keep in mind that developing a successful succession plan doesn’t happen overnight, it takes planning!
Shuman Roy, a technology consultant who writes and researches for ExpertInsuranceReviews.com suggests that in order to make a good succession plan you have to test yourself and your company.
"The ultimate test is to consider that if you were removed from your business tomorrow, would it keep running or would it fall apart. A good thought exercise in succession planning is to review your business as if you were buying the business and taking over tomorrow. What would a transition look like?"
By picturing what your company would look like without you or without your top employees you can see what gaps you have and what you need to fix so that each transition will be smooth. Take a look at each person in the organization. Evaluate their skills, weakness, strengths, and talents. Where would they best benefit the company?
Once you have identified which employees go where, start grooming them to attain the skills they will need by pairing them up with a mentor and providing them with whatever training they might need. A good way to track and aid these candidate’s progress is by keeping track of their development through a platform such as the one we have to offer here at ProSky, where you can track of employee’s milestones.
Improve Employee Development
Not only does succession planning drive down costs and time for the company, but it creates successful employee development within. Fostering employee development through succession planning shows current employees that their loyalty, skills, and presence are being appreciated, and everyone appreciates being appreciated. This shows that you believe in what they have to offer, and want to invest the time and effort to keep those skills with the company.
When creating a good development plan, use the same vision and evaluation formula that was used when finding the appropriate candidates to place in each individual succession role. Envision what direction you want to see the company going into.
Next, evaluate what both the long term and short term needs of the company are. Once you have evaluated those goals and the needs of what the company needs to grow, keep an open line of communication with employees.
Employee Input and Milestones
A succession plan works best if both sides are willing to contribute. Although you might already have an exact vision of what you want, you’ll be surprised at the valuable input employees have to offer. After all, isn’t that all part of an employee development plan in a good succession plan?
If you trust these employees to fit into the company’s future plans, then their input should carry some weight. Ask them what direction they would like to see themselves going and discuss with them about their strengths or what they would like to work on.
Lastly, don’t forget to set milestones for your employees to reach. By working together to set these milestones, it increases the accountability and willingness to hit them. Fill these milestones with both goals and objectives within a tangible timeline. Remember that these milestones are to enable your employee to develop the necessary skills needed to become meaningful contributors and future leaders of the company.
Impact Employee Promotions
When you implement a succession plan into the company, the chances of seeing retention rates increase go up are pretty high. When employees are more engaged with the company and know there is potential for them to grow within the company, they are more likely to stay loyal to the company.Most everyone wants to continue to progress in all aspects of life. By leaving opportunities for promotions up for grabs, employees will strive to do their best in order to get a promotion. According to BambooHR,
22% of employees who are not getting promoted look to other companies for opportunities to advance their careers.
Being able to promote someone to a key role that is qualified enough can be tricky business. This is where mentorship can really play a significant part. What better person to fill the shoes of someone, than someone who has been training under them? Of course, it might not also be ideal to have a mentorship for every position in the company or in the case of a new leadership role being created.
It’s better to custom tailor your mentorship opportunities based on your business needs. By establishing an employee development plan for all employees, you will be able to evaluate who might be the best candidate for promotion by taking a look at their progress and work done, through the development platform.
Evaluating what roles and promotions need to be filled and implementing a strong employee development program can be done through ProSky’s platform. Our platform allows you to create action plans with specific and unique milestones for each individual employee to meet. You can include items such as training programs, individual challenges, goals, mentoring and much more. When employees have a clear path set in where they can see where they stand, this will encourage retention and growth in productivity.