When key employees leave, organizations feel their absence—especially if they do not have a succession plan. In simple terms, succession planning is a strategy used to keep trained employees and leaders in the organizational pipeline, a move that mitigates disruptions by ensuring critical positions are quickly filled.
Why is having a succession plan in place so important? More specifically, how do organizations develop a successful contingency plan? We’ll tell you everything you need to know here.
Mis-Hires Are Costly
Imagine this scenario: A key leader suddenly finds a new opportunity and leaves your organization without adequate notice. So you spring into action, but it takes weeks, maybe even months, of interviews to find the “right” candidate. Then, only a few weeks or months into the new hire, you realize you made a mistake—it just wasn’t a good fit.
Mis-hires are costly, and while the numbers vary, research estimates bad hires can cost five to twenty-seven times the amount of a mis-hired employee’s salary. We advocate for succession planning for a few reasons, but cost is a big one.
How Do I Build a Succession Plan?
Succession planning takes time. Give yourself at least 12-36 months to accomplish the following:
Recruit / Nurture Talent
Succession planning should be preemptive. In other words, look for outside talent before you need it—or, better yet, start grooming potential candidates within your organization and prepare them for higher-ranking positions now.
Start Training Now
To ensure seamless transitions, break down organizational silos and cross-train employees across every major department. The more agile your employees are, the faster you’ll be able to fill vacant positions. Cross-training, ongoing education, and certification opportunities ensure seamless transitions and help you retain current employees.
Keep Diversity in Mind
Successful organizations nurture inclusive environments. That means hiring employees with diverse backgrounds, removing growth obstacles, and demonstrating a commitment to inclusive policies and practices. Why? Doing so is not only a matter of ethics; it’s also just smart business.
The more inclusive you are, the more talent you’ll attract, and the easier it will be to retain top-tier employees you can call upon when you need them most.
Life Insurance Policies
If you are in a business partnership, you can also succession plan by purchasing a life insurance policy that names the surviving partner as a beneficiary. This action plan allows the surviving partner to continue running the business, even if s/he does not have the capital to buy out the deceased partner’s share of the company.
Avoid Succession Planning Mistakes
Start building your succession plan one to three years in advance to ensure seamless transitions. Nurture a shared vision and communicate it with employees to ensure buy-in.
In addition, build a shortlist of potential candidates, ask employees about their career goals, offer ongoing training and support, and prepare employees for future opportunities now, not when you have vacancies to fill.
Need Help With Succession Planning?
This is a brief overview to help you get started as you develop your succession plan. If you need help with your contingency plan, contact the experienced team here at DeBlanc, Murphy & Murphy.