Succession planning has entered the spotlight as an opportunity to promote both employee and organizational growth.

Approaches to succession planning shifted dramatically for most employers over the last four years. However, concerns about having the right staff to serve customers and clients, in the moment, has often relegated this future-focused leadership development process to a lower priority.

Solving for today's demands may leave less time to invest in strategic planning for the future. As business leaders, CEOs establish the environment for talent development and are uniquely positioned to inspire success. By providing the right structure and support tools, HR facilitates this goal.

Generally, the smaller a company is, the more involved its CEO needs to be in operations. Having fewer employees translates to more responsibility at the top. Because the focus of this function is on getting work done to deliver products and services as expected, it often takes precedence over strategic concerns. And workforce and succession planning can be given short shrift. HR teams at nearly two-thirds of organizations have very little or no capacity, indicating high workloads and a sense of feeling overburdened.1

Larger employers often have a chief people officer or chief human resources officer. A key aspect of their role is to stay apprised of important HR-related developments — weekly, monthly, yearly or even three years out. Insights can inform closer alignment with the organization's strategy. Whether the overall plan is basic or detailed, it can help to project where the business wants to be and the workforce that's necessary to get there.

The role of succession in workforce planning

Succession planning is an important aspect of effective workforce planning. This formal, deliberate and proactive process is designed to identify key employees who are either most likely to qualify for vacated positions or ready to make a move. Importantly, once those employees are in place, they're able to impart critical organizational information to their successor.

Although the goals of succession planning are to achieve smooth transitions of knowledge and sustained organizational wellbeing, decision-makers may be tempted to put off this planning. This procrastination is often because of a reluctance to have direct discussions about retirement with incumbents or a fear of losing revered leaders. But engaging in challenging career development conversations is a leader's responsibility. And discomfort with these interactions should never be a reason not to help ensure the ongoing transfer of knowledge, which sustains the organization.

More than half of employers have a succession plan that prepares and develops employees for the possibility of future leadership roles.1 Investing the necessary time and resources in what should be a careful and thoughtful deliberation can be demanding. However, reframing conversations with incumbents and potential successors to focus on "what's next in life" can smooth that process.

52% of companies engage in ongoing succession planning

A wavering economic outlook and a pattern of political impasse in the federal government have had an unsettling effect on workforce planning. And continued uncertainty calls for up-to-date succession plans. One key reason to prioritize succession planning is a higher probability of downsizing, mergers and acquisitions, all of which potentially increase turnover.2

Members of the board often prompt succession planning as a risk mitigation oversight responsibility to cover key executive roles in the event of unplanned or sudden exits. However, risk can be reduced by including as many roles as the budget will allow, down to levels of accountability that are key drivers of operational efficiency and organizational success.

Succession planning involves clearly identifying not only the roles to focus on, but also their requirements. With respect to talent development, they include role-specific skills and core competencies, as well as other criteria that add value to the organization. Roles most often selected for succession planning include executives (39%), directors (32%) and vice presidents (26%).1

Succession planning is most common for executives, directors and VPs.

Forecasting both near-term and long-term workforce needs, with a view into significant influences that may affect them, will help to drive organizational performance. Some of the more relevant factors to evaluate are plans for retirement, turnover trends, employee engagement and satisfaction, compensation competitiveness, management training and employee readiness. True succession planning draws from a selective collection of relevant inputs.

Data is critical to negotiating what the future of work looks like. Information may include skills, performance, age, attributes of succession candidates or other topics of interest. With HR technology, employers can help bridge generational differences, between employers and employees, about what they think is important. Access to more and better insights guides decision-making and often improves return on investment. Optimal use of this technology also allows employers to manage outcomes with greater agility, using automation and emergent capabilities to meet employee expectations and support the people strategy.

Evolution of succession planning

Considerations for contemporary succession planning are evolving. They not only include diversity, equity and inclusion (DEI), but also upward mobility, intellectual curiosity, resiliency, flexibility, emotional intelligence and interest in career development, among other factors. Data sources are available, and once they're integrated, they can provide valuable insights that enhance the organization's understanding of its population. Examples are DEI dashboards and HR analytics, which measure employee sentiment relative to turnover.

Overall, dashboards provide a line of sight into metrics for job qualifications, pay equity, gender bias and promotions. They can also calculate an inclusion score. Internal data is most useful when system capabilities allow external benchmarking for broader comparisons and richer insights. Better dashboards add the ability to conduct audits in addition to bias identification.

Evaluation and interpretation of data is required to define appropriate and equitable guidelines for succession planning and corrective actions, based on organizational values. With cloud-based programs, data on leadership development planning and transitions is easily updated and shared across the globe.

Ongoing talent development to promote growth

Upskilling or reskilling enhances the competence of employees within their current roles and job functions. By increasing engagement, these practices also contribute to a culture of upward mobility that benefits succession planning efforts. Career path discussions and job shadowing promote employee and organizational growth at all levels.

A closer look at an individual employee's goals and plans, and how well their job supports them, can lead to an engaging, open and productive exchange of information and ideas about guiding their future. Rather than a snapshot in time of an individual candidate's progression, succession planning applies foresight to direct a talent management process that steadily fosters the next generation of leaders. The output may include leadership competency models, updated job descriptions and a list of roles to include in the succession plan from the C-suite on down.

Rather than a snapshot in time of an individual candidate's progression, succession planning applies foresight to direct a talent management process that steadily fosters the next generation of leaders.

At the outset of planning, it's important to define and communicate the roles identified for this process and who will evaluate candidates. Direct managers, past managers, a third party, the board of directors and others are likely to qualify, and small firms may involve the CEO or senior leaders. Whatever the approach, employees should have a clear understanding of process details.

Automation and artificial intelligence (AI) augmentation are becoming more prevalent, intensifying the focus on reskilling and upskilling initiatives, especially for HR professionals. Talent development efforts should include identifying the skills needed to succeed in a technology-driven workplace and developing programs to facilitate continuous learning.3

Integrating succession planning into ongoing talent management goals enhances efforts and results. Development plans customized with coaching, mentoring, stretch assignments or other programs fortify organizations' resilience to change by strengthening employees' readiness to take on their next career phase. When enough time and intention are put into a workforce plan — which is openly discussed and regularly updated — succession planning becomes a welcome proposition and a highly valuable investment.

Careful application of technology

HR technology advancements still have some limitations related to workforce planning, succession planning and talent development. Sophisticated analysis is also required to identify factors that maximize outcomes, adding significant time and effort. Meanwhile, technology continues to lag behind business needs for proper succession planning. Most capabilities are restricted to providing data and insights on employee performance and compensation. Another inconvenient truth is that AI can't yet reliably identify a lie, which raises concerns about inappropriate applications.

Careful consideration of next steps, up to and including execution, is required for most technology decisions going forward. Automation is exceptionally important when setting priorities because it supports a flexible and fluid process that drives efficiencies. More extensively, this capability also has the potential to markedly improve how work gets done — an essential skill for leading and succeeding.

In the process of succession planning, assessments and ratings can change, interests may shift, and organizational needs continuously evolve. Addressing ethical considerations, helping to ensure transparency and providing appropriate training are crucial to technology integration in this key element of employee and organizational growth.

Author Information


1"Organizational Wellbeing Poll: What's Hot in People and Benefits Planning," Gallagher. Unpublished internal data.

2"Practicing the Discipline of Workforce Planning," SHRM, accessed Jan 2024.

3"AI in the Workplace Playbook," SHRM, Jan 2024. PDF file.


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