Every organization will have some form of job vacancy arising in future due to attrition or people retiring from their jobs.  However, it is important for organizations to continue to function smoothly irrespective of losing such key employees performing key roles. When organizations have a succession plan, it makes it easier for them to handle any unforeseen attrition and prevents the organization from being greatly impacted by such attrition.

What is succession planning?

Succession planning is a type of planning where organizations identify internal employees as potential candidates for filling future vacancies that may arise within the organization and start training them well ahead of time to perform those roles.

It is important to do this succession planning for several reasons:

Succession planning is for identifying and grooming talent to enable them to take up next level of responsibilities. In other ways, it will help in:

• Keep the cost low.  Hiring from outside is always going to be expensive and difficult.  Grooming someone internally will always keep the cost low & also will help in smoother transition as this person would know the importance, responsibilities, organization culture, etc. already.
• Grooming someone internally will provide better career planning for individuals.  It sets targets for each person and also helps them to move up in their career.  Lot more job satisfaction and morale improvement.
• Keep the attrition low as everyone would want to move up in their careers.

Benefits:

• It serves as contingency planning and keeps the organization well prepared for any sudden attrition that may happen and reduces the impact of losing key employees to a great extent
• By insisting on succession planning, managers get to identify various skill-sets among the team members and their strengths come to light
• Also, employees who are identified as successors based on the skill-sets they possess can be groomed well to handle the relevant positions, and any skill-set that is lacking in the employee can be developed by providing appropriate training and opportunities
• Employees get to have a well-defined road map of their career and it serves as a motivation factor for them to perform even better
• Employees who get to understand that their organization has future plans for them, will tend to stay with the organization for longer time
• Internal employees already have a good understanding of the organization and its goals. Thus, it saves a considerable amount of time and cost for the organization in hiring and inducting new candidates for these positions
• Overall, it creates a very positive atmosphere within the organization and leaves employees feeling extremely satisfied in terms of career progress and highly motivated.

Succession planning consists of the following steps:

Step 1: Identify the set of people at a level who need to be groomed to the next level.  Leadership potential assessment can be done to find out people who have the relevant competencies as well as the essential leadership qualities.

Step 2: Defining the set of responsibilities for the next level and coming up with the training plan for the individuals to take up these responsibilities.

Step 3:  Assigning these responsibilities and monitoring them

Once someone is ready, as soon as the real opportunity arises, you can easily move the person to the next level.  Identifying and getting them is a key.

How can a performance management system help to identify deserving employees in succession planning?

Performance management software (PMS) will be designed to produce reports from which the management can choose the set of people who have good potential and achievement history. They come with a feature with which training and development plans for individual employees can be set up. Once the training and development plans are on the board, the employees can be evaluated on the set these competencies / responsibilities.

Usually PMS has a feature where deserving employees can be nominated for set of next level roles and then can be groomed. This also helps to keep track of the succession planning. Therefore, it is essential for managers and HRs to use PMS to carry out an effective succession planning.