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. 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, therefore 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. It is important for an organization to predict the difference between replacement hiring and hiring for strategic growth.
Let’s Start at the Basics
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 3- or 4-year investment or more of the employees are encouraged early on to set their sites on the next level. A formal internal mentoring program is ideal to help junior candidates tap into the knowledge of leaders 2 or 3 levels above theirs. Mentoring sessions should be regularly scheduled and consistent with the objective of sharing and exchanging 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 aspirations of advancement.
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 include a discussion on advancement goals and feelings of readiness.
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. 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.
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Organizations need only to look within to gauge their success with succession planning versus external hiring. Sometimes it is hard to know where to begin; an outside perspective from a specialized business consultant can help through tailored coaching or mentoring strategies that involve active learning, supervision of special assignments or customized training.
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 measured “engagement” as the employees who were highly involved, enthusiastic and committed to their workplace. It is 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 consistently hire recruiters. The success, in many organizations, utilizing a recruiter, pale in comparison to promoting from within. That said, recruiters have an important role in helping organizations find qualified talent when none exist within.
The key Components that Should Exist for Successful Succession Planning are:
- Communicate the opportunity for advancement during the job interview and again early on after hiring
- Develop a 3-or 4-year phased program as an employee stepping stone for future growth
- Develop an effective feedback culture through one-on-one performance reviews that are kept relevant and timely (I recommend semi-annually)
- Create a mentorship program allowing aspiring employees to partner 2-levels up but ideally outside of their current department
- Allow opportunities for further education, internally or externally, by sponsoring and encouraging professional growth
- Ensure there are opportunities for additional exposure to higher-level decision-making through invitations to meetings, conferences, etc.
- Establish an encouraging environment for open-door communication so employees can approach leaders to enquire about the advancement
- Implement a consistent internal job posting protocol that encourages all interested and qualified candidates to apply
Organizations must plan ahead and evaluate their own effectiveness:
- Does a succession plan currently exists 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?
- 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.
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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 evaluate the process is not when staffing is short of key employees, but rather when organizational growth is anticipated and staffing is ideal.
An outside perspective can help evaluate the current succession culture and offer advice and training to establish a culture of awareness, collaboration and appreciation of others. Sometimes a cultural transformation is needed to ensure employers create an environment that serves the best interest of the organization and its people.
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 Alberta-Canada Job Grant that covers up to two-thirds of the training cost. X5 can help with the specific grant application.