This article was written by Donal Laverty, Organisational Development Partner at RSM Tenon.
As an organisation, are you struggling to manage your talent pipeline? Are unexpected leavers causing you problems in business continuity? A range of national and global surveys of HR Directors and Managers highlight an increasing struggle for organisations to attract and retain talent and to identify the skills required to keep their businesses operating effectively.
It is no surprise therefore, that in the midst of uncertain times – emerging from recession to recovery and then perhaps back into recession again, or flat growth at the very least – that many HR professionals are increasingly concerned about their talent pool.
Amongst the biggest concern for HR management is succession planning and the management of the talent pipeline. The Journal of Accountancy, for example, recently cited that as many as 79 percent of businesses recognise that succession planning will be a major issue for their organisation in the next five to ten years.
We define succession planning as a ‘systematic process whereby organisations identify, assess and develop their employees to ensure they are ready to take on key roles within the organisation’.
Organisations cannot afford to underestimate the importance of succession planning and the need to have formal plans in place. Out of succession, issues emerge: talent management; organisational memory; business continuity; employee engagement; staff motivation and retention; and organisational development.
Below are our ten commandments of succession planning to ensure your organisation successfully plans for the future:
- Any succession planning initiative or plan must be aligned to the medium and long-term business strategy, thus ensuring an organisation is creating sufficient talent to manage its business growth objectives.
- Succession planning, whilst managed by HR, needs to be supported and driven by senior management to ensure and maintain talent momentum and business continuity.
- When succession planning, always look inside as well as outside the organisation to identify and maximise your talent.
- Succession planning isn’t always about moving upwards in an organisation. Increasingly, and in the current economic climate, moving sideways is an important part of developing organisational capability and providing personal development. It also goes a long way to retaining talent.
- Failing to prepare, is preparing to fail – it is imperative that organisations recognise their human resources as the future success of the organisation to which we link the talent, skills and pipeline of staff capable of delivering organisational objectives.
- When looking at performance, look at potential as well. Current performance isn’t always an indicator of future performance, so it is prudent to test for potential. Identified and untapped potential allows an organisation to leverage future capability and to put in place resources to convert this potential into performance.
- As well as looking outside the organisation, look outside a department or team where there is a succession issue. Succession candidates should be able to come from any part of a business providing they personify organisational values and preferred behaviours.
- Ensure you have a plan which is clear, visible and communicated. From an organisational perspective, there is nothing worse than losing hidden or identified talent because they are not aware of the organisational succession planning or talent management.
- From an HR perspective, succession planning needs to be a key part of the wider employee engagement offer and should be aligned to recruitment, training, development and performance review.
- Identify business critical roles and have contingency plans in place to ensure business continuity.
Succession planning is not the ‘holy grail’ of HR or of business planning. It is relatively easy to put in place and whilst most organisations will already have all the constituent part of a succession plan [recruitment policies; skills analysis; management development; performance], these might not necessarily be cohesively integrated from which a succession plan will emerge. Our experience working with many organisations shows that organisations who have identified future needs and put in place a strategy to address that need, already have a competitive advantage, as general research shows that most organisations do not have a succession plan in place.
Succession planning [and by extension talent management or talent shortages] are increasingly becoming issues which can make or break an organisation. By not being prepared, organisations are taking a huge risk – no organisation would function without a business plan, therefore it should have a succession plan as a fundamental part of its business planning activities. Succession planning is as much focused upon expansion as it is about replacing leavers. Having a pool of talent developing within your business allows you to move with the agility and flexibility to respond and reap emergent business opportunities.
Succession planning is, however, an organization-wide issue – every manager, every director and every CEO should be thinking about what/who comes next. For example, a line manager can begin simply by creating succession planning objectives in staff performance reviews; senior management can provide informal advice and mentoring to upcoming new talent; CEOs can communicate a vision of internal talent management. The role of HR is to support management to establish a plan for future leaders and assist in creating a motivated and capable group of employees that are ready to move forward in the organisation when the need arises. By actively following a succession plan, employees are developed to fill unexpected gaps; to step into an unheralded departure, but most importantly to ensure the continuity and future growth of your organisation.