Can You Build a Company-Wide Succession Plan That Really Supports Retention?
By: Shawna Simcik
Succession Planning may be one of the most often hit words in buzzword bingo today, but for good reason. A study of the world’s 2,500 largest public companies reported that companies who scramble to find replacements, specifically at the CEO level, forgo an average of $1.8 billion in shareholder value. Developing your internal talent pipeline or planning for succession should be a fundamental strategic goal of the organization. The process can not only save an organization cold hard cash and help mitigate risk associated with turnover, but also cultivate existing talent by matching promising employees with future organizational needs.
Pro-tip: Succession planning shouldn’t just end at the C-suite. According to Developing Your Leadership Pipeline, authors Conger and Fulmer note that most breakdowns in leadership and business results can occur at the middle manager or director level. Succession planning should focus on linchpin positions or vital positions that are essential to the long-term health of the organization. These positions are typically hard to fill and usually reside in established areas of the business that are critical for the future.
It sounds great in theory, but can you build a company-wide succession plan that really supports retention?
Yes! According to an Aberdeen report on human capital trends, more than thirty percent of employees stay with a company because they foresee an opportunity to be a part of the future growth within the company. In contrast, one of the key reasons employees leave an employer is feeling stagnant in their roles and not seeing a clear path of progression from their current position to another within the company (HBR, https://hbr.org/2017/03/why-do-employees-stay-a-clear-career-path-and-good-pay-for-starters).
Of course, for succession planning to truly aid in retention there are a few things NOT to-do.
- Do Nothing with the Information. Going through the exercise of succession planning with your leaders and identifying critical positions is only the first step. There must be follow-through! You must offer employees a way to advance, whether it’s with additional responsibilities or a promotion. Otherwise, they will think you’re just making empty promises. They’ll stop believing there is real opportunity for growth, which could lead to turnover.
- Succession Planning and Leadership Development as Adversaries. Succession planning and leadership development must go hand-and-hand. Occasionally these two functions reside in separate functional silos, but they should be a key alliance. They share a vital and fundamental goal – shoring up developmental gaps to ensure leaders are ready to take on the next position with ease.
- Not Playing Favorites. Managers should play favorites after going through the exercise. It is simply good business sense to make your largest investment – and this may be your time – in those people who you stand to gain your biggest return. Consider how much time you spend on non-performers and reallocate that time to develop your successor. Give them all the support they need and the freedom they want and deserve. Ask them what they need to be more successful and engaged in their work and deliver as much as you can to meet those requests.
To see the link between succession planning and retention, you must actively monitor and develop your employees’ talents and skills, but with the right processes and tools, you’ll find it much easier to motivate and promote from within, increasing your retention rates and reducing turnover.