Workforce Planning

6 Best Practices for Successful Succession Planning

Your guide to identify and develop future leaders and stakeholders within your organization

June 6, 2024
4-minute read

Nurturing effective talent isn’t just a great business advantage — it's a fundamental workforce planning strategy for organizational growth, adaptability, and long-term viability. Cultivating future leaders and business stakeholders through succession planning provides stability in uncertain times and guides organizations through inevitable challenges. Their vision, decisiveness, and strategic acumen are indispensable for creating agile, productive workforces and navigating the future of work.

But a pipeline of skilled talent doesn’t just happen. To create a thorough succession plan, HR teams must fully evaluate workforce capabilities, anticipate the future needs of the business, and find opportunities to develop top candidates.  

What is Succession Planning?

Succession planning is a proactive approach that identifies and develops internal talent to fill key organizational roles when they become vacant. It involves assessing current and future organizational needs, identifying high-potential employees, and supporting career development opportunities to prepare them for critical roles.

When done right, succession planning can help organizations mitigate risk, maintain continuity, and align talent strategy with business goals.

Why Succession Planning is Important

Leadership and other critical roles steer organizations toward success. But when sudden departures happen without a plan in place, the future of the business can quickly be in jeopardy.

Unplanned vacancies in leadership or other key positions force organizations to scramble with stopgap measures, potentially lengthy searches for external candidates, and possible business disruptions. That’s why having smooth succession plan in place helps:

  • Ensure business continuity
  • Mitigate risk associated with unexpected departures
  • Retain top talent by demonstrating opportunities for growth
  • Foster a culture of learning and development
  • Align talent strategy with business objectives

Common Challenges in Succession Planning

While succession planning offers numerous benefits, it poses some challenges for HR teams, too. This includes:

  • Identifying the right talent: Talented individuals might operate behind the scenes or in roles that are not immediately apparent. Having comprehensive visibility across the entire workforce is key for strategizing.
  • Keeping up with skill trends: As workplaces shift and evolve, so do the skills organizations need to stay agile and competitive. Access to global labor market data gives HR teams insight into skill trends and align development opportunities that address future business needs.  
  • Gaining leadership buy-in: Current leadership may view succession planning as a time-consuming process that diverts attention from immediate operational needs. Convincing leaders of the long-term benefits and efficiency gains of succession planning is crucial.
  • Balancing short-term needs with long-term development: Rapid changes in business may necessitate a shift in short-term priorities. HR must be flexible and responsive to adapt the succession plan to evolving organizational needs while still maintaining a focus on long-term development.
  • Creating a culture that supports succession planning: If succession planning is perceived as favoring certain individuals or as an exclusive process, it can breed resentment among employees. HR needs to ensure transparency, fairness, and inclusivity in the succession planning process to build trust and mitigate concerns about favoritism.

Best Practices for Succession Planning

To ensure seamless transitions into leadership and other key roles, HR teams are tasked with identifying and developing internal talent and fostering a culture of preparedness and growth. By understanding and implementing these six best practices, organizations can proactively address talent gaps, mitigate risk, and cultivate skilled candidates within existing workforces.  

1. Start Early

Succession planning should be an ongoing process — not a reactive measure. By identifying potential successors early, organizations can provide them with the necessary support and development opportunities to prepare for future roles.

2. Identify Key Roles

Identifying critical roles within organizations requires some traditional approaches — including senior leadership interviews — as well as advanced analysis of competitor hiring patterns and skill trends found through labor market data. These are typically positions that have a significant impact on the organization's performance or are difficult to fill externally.

3. Assess Current Talent

Conduct a thorough assessment of the current talent pool to identify high-potential employees who could step into key roles in the future. This assessment should consider not only performance but also leadership potential and cultural fit.

4. Develop a Talent Pipeline

Once high-potential employees have been identified, HR should work with managers to create individual development plans that include training, mentoring, and stretch assignments to prepare them for future roles.

5. Communicate Openly

Transparency is key to the success of succession planning. Employees should be aware of the organization's commitment to developing internal talent and the opportunities available to them. This can help boost morale and engagement.

6. Monitor Progress

Succession planning is an ongoing process that requires regular monitoring and adjustment. HR teams need to regularly evaluate and update succession plans based on changing organizational priorities and the development of potential successors.

Leveraging Data for Succession Planning

Data is critical for managing succession planning efforts. People analytics can help organizations track employee performance, potential, and readiness for advancement. It can also facilitate the creation of individual development plans and provide insights into skill gaps within the organization.

But internal metrics alone aren’t always enough. Adding external labor market data into succession planning can help HR teams track skill trends, adjacencies, and evolutions across the market, as well as anticipate organizations’ future needs. Internal and external data also inform talent-building decisions that lead to learning and development opportunities, fill critical workforce gaps, and strategically plan for the future.

HR’s Vital Role in Succession Planning

Succession planning is a critical component of an organization's talent management strategy. By identifying and developing internal talent, organizations can ensure a smooth transition of leadership and key roles, maintain business continuity, and establish a pipeline of skilled future leaders.  

HR professionals play a vital role in driving effective succession planning by understanding best practices, overcoming common challenges, and leveraging data to support their efforts.

By embracing the importance of succession planning, organizations can help ensure long-term success and sustainability.