With emerging innovative technologies and increasingly competitive markets, succession planning is becoming a must for companies that want to stay ahead and ensure the future of their business. Performance metrics should also be integrated to help measure the effectiveness of succession planning and evaluate its success as well as identify where there is room for further improvement. This is one of the best ways to achieve business continuity and long-term success.
What is Succession Planning?
Succession planning is the process of identifying the right people for the right roles at the right time based on skill sets and company needs. This ensures that when one person moves on or up the ladder, the role they left is filled promptly by the right person with the right set of skills, preventing gaps and allowing for a smoother transition.
This type of planning is most often associated with filling leadership positions to ensure there aren’t skill and leadership gaps for more impactful positions. However, succession planning does not need to be exclusive to management and executive-level roles. Every person’s role within the company should be viewed as important, thus meaning you should find the right person with the right skills no matter what position needs to be filled.
While on the surface level, succession planning seems to be all about talent management, it can have a larger effect on the company as a whole. Ensuring you are building and growing a team of the best people possible improves engagement, retention, employee and customer satisfaction, and productivity — all of which are important to creating a successful and profitable company.
Succession Planning Best Practices
Succession planning is about more than just filling roles with the right people. There are several succession planning best practices to follow that help the company create more effective changes that are in alignment with current and long-term goals and visions. This can include:
- Getting executive and board members involved as they are generally the ones who have the best understanding of what is needed to grow the business.
- Aligning succession planning strategies with corporate goals. Determining where the company is today compared to where you want it to be in the future can help when deciding the people and the skill sets needed to achieve those goals.
- Recruiting the best people possible. The recruitment process should be in alignment with the long-term succession strategy. This means you don’t necessarily need to recruit directly for high-level openings but look for people that can be groomed and developed to better fill future leadership positions.
- Take your employees’ goals and long-term plans into consideration. Just because you have big plans for a certain employee doesn’t mean their long-term goals are in alignment with what you have in mind. In other words, never assume a devoted, successful employee is going to stick around. Before tapping them for succession development, make sure they actually want to still be with your company in the next five to ten years.
- Integrate career development and performance reviews. Promoting within the company is easier and cheaper. However, to make sure you don’t promote an employee who’s not ready or who doesn’t plan to stick around, managers should conduct regular meetings and reviews. This means checking in to see where current employees are at in terms of their skills, whether or not they have growth potential, and talking to them about giving them new assignments to help them transition to a leadership role if they are interested.
Additionally, to get a better overall idea of leadership positions and what roles might soon need to be filled or filled in the future, it can help to create a visual map of your organization. Think of this kind of like creating a family tree, only instead of family generations, it shows who is in leadership and who works underneath that position and could potentially be groomed to eventually take on that leadership role.
Performance Metrics That Can Enhance Your Succession Planning Strategy
Performance metrics play an important role in aligning succession planning strategies with the company’s goals. Again, succession planning isn’t just about filling leadership roles, it’s about creating a talent pipeline that aligns with the company’s strategic objectives. Metrics can help you track performance and effectiveness using key performance indicators (KPIs) so you can make more informed succession planning decisions that contribute to reaching long-term goals and achieving overall success.
Some of the most essential performance metrics to focus on include:
- Employee turnover and retention rates: Knowing how many employees are leaving your company is important so you can identify why this is happening and make improvements. Increasing retention rates is key to executing a solid succession plan.
- How many critical positions are filled internally: A key part of your plan should be filling roles by hiring internally. If this number is low, work toward developing strategies to help you raise it.
- The number of successors per critical position: It’s important to have more than one successor for a critical position. The goal should be to aim for three. If you have at least three potential successors, this is an indicator of successful succession planning.
- Employee engagement: How happy and engaged your employees are can correlate to whether or not they will want to stay and grow within the company. If engagement levels are low, working to raise them can improve your chances of hiring internally for critical positions.
- Time-to-fill: This metric shows how quickly positions are filled from the time they were vacated. It’s important to work on shortening this time as part of your succession planning strategy.
- Talent utilization pipeline: This KPI can help you identify how well the succession planning program is working. It shows how well you are using the people who are being hired and trained for succession by measuring how many of them actually end up getting promoted to leadership roles.
- Flight risk: This metric helps you identify employees who have a high potential for promotion but might be likely to leave the company. You don’t want to put all your hopes on someone who isn’t planning on staying with the company.
Wrapping Up: Determining the Best KPIs for Your Succession Planning Strategy
The above are just a few of the many different KPIs you can track when developing a succession plan strategy. Ultimately, the specific KPIs you want or need to use can vary depending on your company’s unique circumstances.
If you are struggling to determine what to measure or track, you can outsource your data analytics services, which involves partnering with an external company that specializes in extracting insights from data. Those insights can then be used to help you determine which KPIs would be best to track for your succession program.
Either way, whether you hire a third party or handle data and metrics internally, it’s important to use KPIs to ensure your succession plan strategy is working and will continue to help your company reach its goals and achieve success.
⸻ Author Bio ⸻
Sam Bowman enjoys writing about people, tech, business, and how they merge. He enjoys getting to utilize the internet for the community without actually having to leave his house. In his spare time, he likes running, reading, and combining the two in a run to his local bookstore.
