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Is a Succession Planning Program Important to Retain Your Top People?

Is a Succession Planning Program Important to Retain Your Top People?
  • Effective succession planning needs to be part of an organization’s culture. Everyone in the organization needs to believe it is best for ongoing organizational growth, employee’s professional growth, and to enable an organization to promote from within.

    After all, there is a direct correlation between succession planning and corporate performance, lower employee turnover and improved organizational familiarity and knowledge.

    I have seen so many organizations in my career that do not plan for future growth or turnover. In turn, many employees are hired externally. Although I believe in a balance of internal promotions and external hires to ensure the best individual is hired for the role, the ideal ratio is 80% internal and 20% external, in my opinion.

    An organization needs to predict the difference between replacement hiring and hiring for strategic growth.

    Succession Planning from the Get-Go

    Succession should be discussed at the hiring interview.

    There are many positions that candidates apply for that are a job, not necessarily a career. In a competitive environment, wouldn’t it be ideal if job applicants left the interview realizing there was an opportunity for growth? Especially if there were employer-led training, certification and workshops?

    Helping employees advance may involve a three-or-four-year investment or more if they are encouraged to set their sites on the next level. A formal internal mentoring program is ideal for helping junior candidates tap into the knowledge of leaders two or three levels above theirs. Mentoring sessions should be regularly scheduled and consistent to share and exchange perspectives in a question-based discussion.

    Employee exposure is key to effective succession planning. It is common for junior employees to admit they do not know what happens in the executive offices. Inviting aspiring employees to witness “a day in the life of” can be an eye-opener and motivate advancement aspirations.

    Each manager should be held accountable for succession planning within their department, and upcoming job openings should be posted internally before considering an external recruiter. Annual (even ideally bi-annual or quarterly) performance appraisals should discuss advancement goals and feelings of readiness.

    Collaboration over competition

    Care must be given that internal departments do not compete for talent but rather collaborate.

    An employee may have a background in a role outside of their current scope that can lend eligibility to a new role in a different department. But leadership cannot compete internally for eligible candidates. And ideally, there is a protocol in place to offer a candidate a recommendation to move to a more advanced role, in a different department, based on past experience, ambition, and attitude.

    Progressive organizations might consider implementing employee assistance programs for recognized certification or degree programs. These can be based on the successful completion of said education program before reimbursing a portion, or all of it, to the employee.

    Organizations need only to look within to gauge their success with succession planning versus external hiring. With that being said, sometimes, it’s hard to know where to begin.

    An outside perspective from a specialized business consultant can help through tailored coaching or mentoring strategies involving active learning, special assignments, or customized training.

    (Learn more about the customized employee training programs from X5 right here)

    Employee engagement

    According to a Gallup poll, employee engagement reached a 20-year high early in 2020 at 38%. Once the pandemic hit, employee engagement dropped to 31% and has not recovered.

    Gallup measures “engagement” as the highly involved employees, enthusiastic and committed to their workplace. It’s not surprising employee turnover is at record highs in many organizations. And for those who do not actively pursue or measure employee engagement, the likelihood of experiencing short-staffing is high.

    That also holds true for the challenges of promoting from within.

    Growing leaders will ensure engagement and morale for ambitious employees increases, thus decreasing turnover and the need to hire recruiters consistently. The success, in many organizations, of utilizing a recruiter pales in comparison to promoting from within.

    That said, recruiters have an important role in helping organizations find qualified talent when none exist within.

    (Are you struggling with team engagement? Read this post next to learn why it’s time for creativity and innovation)

    What Makes for Successful Succession Planning?

    The key components that should exist for successful succession planning are:

    • Communicating the opportunity for advancement during the job interview and again early on after hiring
    • Developing a three- or four-year phased program as an employee stepping stone for future growth
    • Developing an effective feedback culture with relevant and timely one-on-one performance reviews (I recommend semi-annually)
    • Creating a mentorship program allowing aspiring employees to partner two levels up but ideally outside of their current department
    • Allowing opportunities for further education, internally or externally, by sponsoring and encouraging professional growth
    • Ensuring opportunities for additional exposure to higher-level decision-making through invitations to meetings, conferences, etc.
    • Establishing an encouraging environment for open-door communication so employees can approach leaders to enquire about advancement
    • Implementing a consistent internal job posting protocol that encourages all interested and qualified candidates to apply
    • Considering your company’s succession planning program is important. At the same time, be sure to check in on your diversity, equity, and inclusion practices too. Learn more about that in this blog post)

    Evaluating the Efficacy of Succession Planning

    Organizations must plan ahead and check their own effectiveness:

    • Does a succession plan currently exist for key leadership turnover?
    • Does a succession plan exist for company growth and expansion?
    • Is leadership being held accountable for preparing successors versus feeling threatened by their best employees?
    • What are the statistics for internal promotions versus external hires, and why?
    • Does a regular (i.e., annual) review of leadership talent take place to determine opportunity?
    • Do key employees hold the organization hostage due to a lack of internal or external qualified employees?
    • Does current leadership embrace the succession planning concept and hold themselves accountable to have a plan?
    • Are there qualified mentors and leadership coaches to help, internally or through externally sourced companies?
    • Are aspiring employees given the exposure or projects to gain the necessary experience for advancement?
    • Is employee turnover measured year-over-year to determine the effectiveness of the current succession planning program, which ultimately leads to higher retention?

    Why You Need a Succession Program

    According to Forbes, managers promoted from within are 10% more likely than external hires to report having a highly productive team. In addition, 20% of employees passed over for a promotion due to an outside hire quit or considered quitting. That does not bode well for engagement. Of course, it is not to say that someone unqualified should be promoted.

    And that is precisely why a detailed and effective succession program needs to exist!

    There is a great deal to consider for an organization that may not have an effective succession planning strategy or that finds itself short of key roles too often. The time to test the process is not when staffing is short of key employees. But rather, it’s when you’re anticipating organizational growth, and staffing is ideal.

    Sometimes a cultural transformation is necessary. An outside perspective can help test the current succession culture. It can also offer advice and training to establish a culture of awareness, collaboration, and appreciation. Ultimately, this ensures employers create an environment that serves the organization’s best interest and its people.

    (On the topic of company culture, read about why yours deserves a strategy in this post)

    Get to know Kris

    Kris works with X5 Management to offer training solutions and help businesses improve communication, teamwork, and leadership development. This includes tailored workshops for workplace leadership development, effective mentorship programs and employee development for enhanced succession planning and employee retention.

    The training is eligible for the Canada-Alberta Job Grant that covers up to two-thirds of the training cost. X5 can help with the specific grant application.

    Did you learn a lot about succession programs in this post? Here are three more to read next:

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