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官方开奖结果体彩网:contingency plan that should be reevaluated and ♒updated each year or as changes dictate within the company. 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 assumeඣ control.

In large companies, the 澳洲幸运5官方开奖结果体彩网:board of directors typically oversees succession planning in addition to the 澳洲幸运5官方开奖结果体彩网:chief executive officer (CEO). In this case, succession planning affects n🃏ot 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 often means training the next generation.

Businesses may want to create more than on🧸e type of succession plan. An emergency succession plan is put in place when a key leader needs to be replaced unexpectedly. A long-term suc𒅌cession plan helps the company with leadership 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官方开奖结果体彩网: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官方开奖结果体彩网: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.