Succession Planning - Effective succession planning imperative for business success
Succession Planning is the process of identifying and tracking high-potential employees who will be able to fill top management positions when they become vacant.
Succession planning is an ongoing process that identifies necessary competencies, then works to assess, develop, and retain a talent pool of employees, in order to ensure a continuity of leadership for all critical positions. Succession planning is a specific strategy, which spells out the particular steps to be followed to achieve the mission, goals, and initiatives identified in workforce planning. It is a plan that managers can follow, implement, and customize to meet the needs of their organisation, division, and/or department.
Succession planning establishes a process to recruit employees, develop their skills, and prepare them for advancement, all while retaining them to ensure a return on the organization's training investment. Succession planning involves understanding the organization's long-term goals and objectives, identifying employee development needs, and determining trends.
The continued existence of an organization over time require a succession of persons to fill key position. The purpose of succession planning is to identify and develop people to replace current incumbents in key position for a variety of reasons. Some of these reasons are given below:
Superannuation: Employees retiring because they reach a certain age.
Resignation: Employees leaving their current job to join a new job
Promotion: Employees moving upward in the hierarchy of the organization.
Diversification: Employees being redeployed to new activities.
Creation of New Position: Employees getting placed in new positions at the same level.
Succession can be from within or from outside the organization. Succession by people from within gives a shared feeling among employee that they can grow as the organization grows. Therefore organization needs to encourage the growth and development with its employee. They should look inward to identify potential and make effort to groom people to higher and varied responsibilities. In some professionally run large organizations, managers and supervisor in every department are usually asked to identify three or four best candidate to replace them in their jobs should the need arise. However, the organization may find it necessary to search for talent from outside in certain circumstance. For example, when qualified and competent people are not available internally, when it is planning to launch a major expansion or diversification programmes requiring new ideas etc.. Complete dependence on internal source may cause stagnation for the organization. Similarly complete dependence on outside talent may cause stagnation in the career prospects of the individual within the organization which may in turn generate a sense of frustration.
Succession planning provides managers and supervisors a step-by-step methodology to utilize after workforce planning initiatives have identified the critical required job needs in their organization. Succession planning is pro-active and future focused, and enables managers and supervisors to assess, evaluate, and develop a talent pool of individuals who are willing and able to fill positions when needed. It is a tool to meet the necessary staffing needs of an organization/department, taking not only quantity of available candidates into consideration, but also focusing on the quality of the candidates, through addressing competencies and skill gaps.
Succession planning top talent concern for executives
Succession planning and strengthening of the leadership pipeline are the top talent concerns for corporate executives globally, according to a study by Deloitte. Executives worldwide foresee leadership shortages in the coming years and are looking at various ways to accelerate leadership development within their organisations.
The report, titled, 'Talent Edge 2020: Redrafting Talent Strategies for the Uneven Recovery' says, despite a new wave of uncertainty, many leading companies are reshaping their talent strategies. As a result, organisations across the globe are seeking new sources of growth and are tailoring talent plans to address differing regional needs to support effective talent strategies and business operations.
"The standout findings from this research are two-fold," said Jeff Schwartz, global co-leader of Deloitte's Talent, Performance and Rewards practice. "The near-universal agreement about the existing and potentially growing shortage of executive leadership and the significant regional differences in talent needs around the globe - most acute in the Asia Pacific economies," he added.
In today's business environment, he adds, talent leaders are taking responsibility for their future by focusing investments and capabilities on rebuilding and developing new talent programmes for leaders and critical employees within their organisations. "Given the high growth and potential shortages in the Asia Pacific region, talent concerns are at the top of mind for business and HR leaders," he added.
In the APAC [Asia Pacific] region, for instance, executives face urgent needs with significant shortages anticipated in research and development, operations and strategy and planning, the study said. Survey participants in the Americas see executive leadership and operations as the main talent gaps, while business leaders in the Europe, the Middle East and Africa region are far less concerned about shortfalls in talent.
According to the survey, 83% of the respondents felt that their organisations required significant improvements in their talent programmes, while only 17% said their talent programmes were 'world-class across the board'. The survey also revealed many executives are aligning their talent management practices to identify and develop new leaders, create effective succession plans and build global workforces. A majority of executives say performance management, talent assessment and high-potential employee development are core talent priorities over the next 12 months. While fewer than one in five executives identified their organisations as 'world-class' in talent, more than four out of five acknowledged the need for significant improvements. Many executives anticipate seeing across-the-board talent shortages over the next one year and are developing plans to meet these challenges. 27 Jan, 2012, 07. ET Bureau
Effective succession planning imperative for business success: Survey
Nearly 90% of the organisations conferred succession planning as an important HR process in a survey conducted by TJinsite, research and knowledge arm of TimesJobs.com. According to Rajendra Ghag, Executive Vice President-HR & Admin HDFC Life, a structured succession planning process helps companies to manage their 'Business Critical Positions' (BCP), effectively.
Referring to the succession planning process in his organisation, Ghag commented, "As a part of our HR strategy, successors are named by an effective PRP (Performance Review Process) function. In this process, key potential candidates are identified and then, top management sit through for four days to find out whether these high potential individuals can fit into the next higher role. Based on the management's input, they are given ratings, which defines their strength and areas where they need support to grow to become a leader."
Industry experts believe that a well calculated succession planning process can unlock a host of benefits for the organisation. In TJinsite's survey, over 30% of the organisations feel that succession planning can tackle the perpetual attrition problem, leading to higher employee retention. Further, if the process is formally instituted and systematized, can lessen the anxiety felt by employees and actually lead to more employee empowerment, believe 20% of employers.
Experts resonated that putting a strategically planned succession planning process in place, proactive management of the talent pool and employee engagement in the process, can ensure better growth prospects for the organisation.
Distinction between "Career Planning and "Succession Planning
No doubt, career planning as well as succession planning constitute very important input to manpower planning. Sometimes, many people consider that the terms "Career' Planning" and "Succession Planning" are synonymous. But it is not so. Distinction between them is made clear in the following box.
From the discussion done so far we come to know that career planning and succession planning are very important from the view point of an organisation and its employees. Career planning helps to integrate the employees needs, aspirations with their organisational requirements. Perhaps, it is one of the important challenging task which has assumed great importance in the present century since organisations are becoming keenly interested in attracting, retaining and utilizing the potential of highly talented, efficient, technically specialized, professionally trained and well experienced experts. It is also found that some organisations also think properly and pay attention to succession planning wherein those executives possessing the desired skills and potentials are systematically identified and efforts are made to develop the appropriate executives to hold the position in future. Career Planning and Succession Planning, though are different, act as one of the important tools for harnessing the human potential in which top management, Human Resource Managers have a major role to play.