What Is Succession Planning?

Succession planning ensures that businesses continue to run smoothly and uninterrupted after key employees move to new opportunities, retire, or pass away. It can also provide a liquidity event, which enables the transfer of ownership in a going concern to rising employees.

Forming a Plan

Succession planning is a 澳洲幸运5开奖号码历史查询:contingency plan that should be reevaluated and updated each year or as changes dictate within the com﷽pany. The plan will evaluate each leader’s skills, identifying potential replacements within and outside the company and training certain employees so they’re prepared to assume control.

In large companies, the 澳洲幸运5开奖号码历史查询:board of directors typically oversees succession planning in addition to the 澳洲幸运5开奖号码历史查询:chief executive officer (CEO). In this case, succession planning affects not only the employees but also the shareholders. A larger business may train mid-level employees to one day take over higher-level positions. For small businesses and family-owned companies, succession planning ofte🤡n means training the next generation.

Businesses may want to create more than one type of succession plan. An emergency succes🍷sion plan is put in place when a key leader needs to be replaced unexpectedly. A long-term succession plan helps the company with lea🎶dership changes.

Targeting Employee Resources

According to human resources (HR) experts, succession planning involves preparation rather than pre-selection. This means leaders must identify the skills, practices, and knowledge required to retain and move employees to necessary positions. Succession planning often includes:

• Developing Talent: Companies with talent development programs ensure that employees receive ongoing training, challenging work experience, and increasing responsibility.
• Identifying Leaders: Companies monitor and evaluate employees, targeting those ready for leadership positions. Some employees may be matched to lower management positions, while some may qualify for higher roles. Ensuring 澳洲幸运5开奖号码历史查询:diversity of employees and talent plays a role at this stage.
• Leadership Development: Future leaders should be provided the opportunity to test their skills with increased responsibilities, long-term projects, and executive interface and 澳洲幸运5开奖号码历史查询:networking.
• Create a Succession Path: When employees are targeted for leadership roles and development goals are in place, companies can create a detailed outline that includes contingency plans for planned or unexpected open roles.
  

Benefits of Succession Planning

• Employees are empowered, knowing they can advance within the company.
• Future opportunities reinforce employees' career development.
• Succession planning ensures that supervisors will mentor employees.
• Management tracks the value of employees so positions can be filled internally when opportunities arise.
• Leadership and employees share company values and vision.
• A new generation of leaders is available when resignations or retirements occur.
• Investors who observe a well-communicated succession plan remain loyal shareholders.
  

The Bottom Line

Succession planning ensures a company's leadership roles are held by those with the necessary skills and knowledge. Plans help target employees for senior positions, provide employees with opportunities to grow, and help companies maintain a competitive edge.