In a world of tentative financial markets, mass retirements, labour shortages, and government cuts, succession planning has quickly become a buzz word in many industries. Even if you are familiar with this term, you may still have some questions about what is involved in the succession planning process.
So, what is succession planning? Succession planning involves the identification of key positions within an organization and the development of employees’ skills to enable them to fill these key positions. This process can be applied in a variety of ways. Small and/or family businesses can use succession planning to equip a person with the right skills necessary to take over the business. Businesses of any size can use succession planning to identify promising employees who could be primed for senior positions. Succession planning doesn’t just prepare an organization for retirements; it also makes preparations for emergency vacancies (e.g., illness).
What is the goal of succession planning? Succession planning supports the organization’s objectives in times of organizational restructuring. Succession planning allows an organization to transfer the knowledge and job expertise required by one position to another employee, who will then be able to take over the position as necessary. Succession plans can address both planned retirements and emergency vacancies. The point is to be confident that your organization is able to adapt to and thrive in new circumstances.
Why is succession planning such a hot topic? Projections suggest that, by 2021, people age 55 or older will account for roughly one in four Canadian workers. An aging population brings about an increasing retirement rate. This is a trend that other countries are experiencing as well. With a substantial portion of the workforce on the brink of retirement, there is a danger that the knowledge and experience of these workers could be lost. It’s the new brain drain.
Why do companies invest in the succession planning process? Companies who invest in succession planning reap many benefits from the process:
- They are able to quickly adapt to organizational changes.
- They are able to establish benchmarks for job performance and for the quality of their products/services.
- They are able to create training targeted to developing the skills an employee needs to function in the position they will inherit.
- Their employees are flexible enough to cover a position vacancy.
Is succession planning right for your organization?