A little pop quiz: what do medieval monarchies and modern CEOs have in common? The answer: their legacy is defined not just by what they do in power, but whether they can ensure a smooth succession. The stakes are a little lower (we’re not talking about the future of the country) but all companies know poor succession planning puts long-term success at risk.
Nowadays, succession planning isn’t just finding replacements for CEO. It’s about identifying critical positions throughout organizations, recognizing those with the potential to step up and making sure they are prepared when the time comes.
It’s a big job, and micromanaging their successors’ development is a poor use of leaders’ time. Instead, the responsibility falls to HR.
Why Does HR Need to Care About Succession Planning?
You’ve got the perfect team—well balanced, with the right leaders in the right roles. Job well done? Not so fast! Now’s the time to think about what comes next. Each year, 10% to 15% of corporations are forced to appoint a new CEO, according to the Harvard Business Review.
That’s just the start. In large organizations, employees will leave business-critical roles every single week. You’ll miss the work they do, but also their institutional knowledge and the relationships with colleagues which keep the business running smoothly and promote a healthy company culture. Even if someone is only temporarily out sick, you need a replacement plan.
The Importance of Employee Engagement
The other side of the coin is, your recruitment and L&D teams spend every day focused on maximizing the skills and potential of your workforce. Don’t let their efforts go to waste. Top talent, your superstar performers of today or tomorrow, know they’ll be appreciated wherever they go, so will only stick around if they see a clear path for their progress. They need to feel valued and know you’re thinking of their next step.
Motivating your top talent with the promise of rising through the ranks boosts employee engagement and reduces turnover costs. You’re also reducing the risk of bad hires—when you recruit internally, you know what you’re getting.
How Modern Succession Planning Actually Works
Identifying the leaders of tomorrow is at the heart of succession planning. But there’s a lot more to it. It starts with asking what skills your team possess and how they are distributed. It’s often about identifying risks, like knowledge hoarding, where one employee accumulates so much responsibility and know-how they become completely irreplaceable. It’s great for them, but bad for your organization.
Similarly, you don’t want to place too much responsibility in any specific future leader, who can always get a better offer from a competitor. Increasingly, succession planning relies less on specific individuals and more on pools of talent. This means you’ll identify many potential leaders, reducing overall risk.
Once future leaders are identified, they need to get opportunities to grow, either through increased responsibility or personalized training. Effective succession planning means tracking the development and readiness of all high-potential employees as they progress.
How HR Can Take Succession Planning to the Next Level
Succession planning goes hand in hand with talent development more generally, which puts HR at the center of the story. HR teams are responsible for an employee’s entire journey, from recruitment and onboarding, to training, and then managing their performance to help them reach their full potential.
Only with a proactive, organization-wide talent development strategy can you ensure everyone’s achieves all they can.
Managers have a big part to play spotting and training future superstars, but HR has the skills and oversight to take a broader approach to succession planning. This is especially true when we’re talking skills, not just individuals. Let’s say one department is lacking certain skillsets—this could be an opportunity for internal movement. If there’s a shortage organization-wide, it’s time to recruit or invest in learning. Sometimes, you might find a bottleneck, with lots of high potential employees and not enough roles—this is a signal to push pause on recruitment, to give your current team space to grow.
How HR Software Helps Succession Planning
The thing is, this all sounds great, but putting it into practice is different. It takes time and effort, and requires constant monitoring. People are unpredictable, so the best succession planning takes regularly readjusting expectations. In large organizations, it’s a massive job to maintain databases of who you see filling what roles and when.
The good news is, Paycor’s Career Management software can help. It removes the complexity from succession planning, helping you create better career strategies, facilitate internal movement and identify talent risks. Coach and retain your workforce by giving them the career development they crave.