How a Solid Succession Plan Impacts Retention and Engagment
Posted by Insightlink on 07/31/19
A Solid Succession Plan Is Critical To Retaining Top Talent
Only 54 percent of CEOs and directors are grooming a specific successor to take over the company when they exit, while 39 percent have no suitable internal candidates who could step in immediately. While most business leaders know the importance of continuity, many organizations still aren’t ready for succession. But having a clear plan for your company’s future isn’t just good for continuity, but is also critical to keeping your employees committed and engaged.
Preparation Is Key
Employees come and go. That’s just the nature of organizations, so why wait to prepare for the inevitable? Succession planning should be a continuous process so that your company isn’t caught off-guard by organizational changes. It’s vital to a company’s success that there are measures set up to make sure that things keep running smoothly in the event of resignation or retirement of staff, as well as restructuring and expansion.
The tenure of top executives has shortened significantly over recent years, due to various reasons that range from shareholder pressures or consolidation. Some organizations have also started offering early retirement packages to save on benefits, giving these leaders more incentive to leave the company early. When experienced employees leave an organization, a succession plan is crucial to making sure that their knowledge does not leave with them.
As a rule of thumb, organizations should aim to have ready replacements for 90 percent of critical roles, just in case people leave unexpectedly. These key roles are defined by the high stakes the job entails. Because the replacements for these roles could make or break the future of your company, it’s crucial that you choose the potential successors carefully.
Engaging Potential Successors
Potential successors are high-performing employees who have shown their commitment to the organization over an extended period of time. Identifying these employees is an essential part of succession planning, and not just ensures continuity but also improves employee retention. Grooming potential successors helps them develop the skills they need to take on these key roles, and also communicates their part in the company’s long-term goals.
An effective succession plan results in more development opportunities for possible leaders. It’s unsurprising, then, that 62 percent of employees say that they would be more engaged at work if they knew their company had a succession plan. High-performing employees are more likely to be headhunted, but when these employees know that they have a solid future with your company, they’re more likely to stay.
Succession planning is a long process, so it can only be effective if human resources managers start the process as early as possible — even as early as onboarding. Grooming employees for critical roles isn’t something that can be done overnight. Starting early gives employees time to develop the skills needed to navigate high-level roles successfully, and also keeps them engaged by giving them set metrics for success. By operating with a long-run mindset, organizations can reduce risk and ensure growth for the future.
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