A succession plan is a critical component of strategic management. Employees may depart their positions for a variety of reasons, whether they work for a small partnership, a family-owned firm or a major corporation. When this takes place, it is important to have a roster of qualified individuals to fill their positions.
Learn about the importance of succession planning for your organisation here.
What is succession planning?
Your Will names beneficiaries who are to receive assets and guardians if the beneficiaries are too young. Investopedia describes succession planning as “a business strategy companies use to pass down leadership roles to another employee or group of employees.” It entails cross-training individuals to assist them in obtaining knowledge, developing skills and gaining an understanding of the business.
Aon Hewitt has learned that millennials constitute the largest generation in the Singapore workforce, according to Nanyang Technological University. The backbone of leadership will soon be replaced as the older generation retires and the younger generation advances in their professions. Because succession planning fosters a new generation of leaders, it serves as an excellent exit strategy for business owners wishing to sell their stake.
What are the benefits of succession planning?
To reduce the risks that come with the departure of key individuals, companies must first recognise the benefits of succession planning before engaging in talent pool management.
- Leadership roles can be easily filled if senior management positions are vacated.
- The risk of losing experienced company executives is minimised.
- There will be less time and money spent on talent acquisition and leadership development.
- Formal procedures for selecting top and middle management are put in place.
How to plan for succession effectively
Prepare your business for all contingencies by gearing up potential employees for advancement. Here are five steps to get the succession planning at your company rolling:
- Be proactive with a plan. Consider your team’s main functions and the day-to-day impact of each person leaving the organisation.
- Determine which candidates are qualified. Look for persons who have the required talents to succeed in higher-level roles.
- Explain to each candidate that they are being considered for a higher-level post, but that there are no promises.
- Connect candidates with mentors to help them improve their communication and interpersonal skills.
- Include your succession strategy in your hiring process. Determine any talent gaps that employees would leave if they were hired.
This article should not serve as a substitute for independent professional advice. For thorough and comprehensive advice tailored to your specific situation, please contact the team at Summit Planners.