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Succession Planning

Published May 2007

Leveraging Successful Succession Planning

Shelly Heiden

For most organizations, identifying and retaining talent is the key to their continued growth and success. But with recruitment falling short of solving the overall problem, companies increasingly are looking to develop and implement succession planning strategies as a means of ensuring highly qualified employees are recruited and developed to fill every strategic role within the company — not just today but tomorrow, next year and five
years from now.

Companies that invest in succession planning generally find themselves better positioned to support corporate goals and strategies. By implementing internal leadership development programs that feed into succession planning, they can improve the likelihood that a continuing sequence of qualified people is prepared to assume responsibility and fill management roles as managers and key people retire or move on.

With the looming talent crisis and anticipated retirement of baby boomers, succession planning has become a much more critical issue. But there's still a need for more focus and integration.

Most U.S. organizations conduct some type of succession planning. "The Society for Human Resource Management (SHRM) 2006 Succession Planning Survey Report" found more than 58 percent of responding organizations have some type of succession plan. Those plans were formal at only 29 percent of them, however. Another 26 percent intended to begin succession planning.

The respondents to the Human Resource Institute's 2006 Succession Planning Practitioner Consensus Survey appear to be better prepared — 75.3 percent of them have a formal succession plan, and 53.9 percent said they have had formal succession plan systems for two or more years.

To achieve its maximum potential, succession planning should be implemented as part of a comprehensive talent management strategy that also includes career and development planning, learning management and performance management.

This integrated approach optimizes the benefits for employees, management and the organization as a whole.

A cohesive talent management system allows data to be seamlessly linked and leveraged across all talent management applications. This linkage provides access to valuable, actionable solutions for organizational questions such as "How many people are retiring over the next five years?" and "Do we have the staffing and skills to backfill these positions?"

It also can answer employees' questions such as "What career opportunities are available to me in the next five years?" and "What learning and development opportunities are available to help me better achieve my performance goals?"

Focus on Career Development

A win-win succession management strategy is one that allows organizations to quickly identify critical jobs, potential successors and skills gaps while providing employees with insight into available career options and the tools to plan and achieve their career goals.