There is a noticeable imbalance among the working age population today. While there seems to be an adequate number of older and younger workers, the prime working-age population (those between 25 and 54 years old) has noticeably diminished over the last several years. This is because there are more baby boomers aging and transitioning into retirement than there are younger adults to take their place. With a considerably smaller talent pool of in-demand candidates, many organizations are finding it challenging to keep up with the demand for skilled workers as seasoned workers leave. In this post, we will explore how succession planning can help mitigate these difficulties for companies of all types.
Succession Planning: Why It Matters
Leaving key positions open within an organization can have a number of detrimental effects on organization, especially if those vacancies are long-term. Without the proper people in these positions, projects are delayed and critical decisions cannot be made. The ability for businesses to meet customer expectations can also suffer. Lacking able manpower can jeopardize your companies’ ability to ship products on time, which could result in reduced sales and pay cuts. Other challenges such as lower worker cohesion, increased attrition across executive level positions, higher turnover rate of high performers, and a general shortage of future business leaders can also negatively impact the company’s bottom line and long-term growth.
Retaining talent for leadership roles is not just of economic importance, but is also a strategic necessity. Without the right leaders to make key decisions, it is highly difficult for companies to implement strategies. While you may feel that your future is certain, it is important to consider how succession planning can make a difference in the long-term. Do not wait until it is too late to take action. By creating a succession plan early on, you can help your organization gain a competitive edge, while also reinforcing your company values and securing your future.
How To Develop A Succession Plan
When developing your succession plan, consider the following tips:
- Envision the future of your business.
- Open your mind to new leadership possibilities.
- Look for a wide range of experts.
- Provide ample learning opportunities.
You probably already have some short-term and long-term goals that you want to reach. However, you may not have the resources in place to make them happen just yet. Having leaders in your corner that you can depend on can help your business grow in the right direction. Take a critical look at your business’ future needs and determine who is the best person to address them. Focus on finding leaders who have the passion and drive to run your organization as it will be in the future, not as it is now.
Not everything works out like you expect it to. Maybe you already have a successor in mind, but year after year this person does not seem like they are getting any closer to being ready to lead. While this does not mean you necessarily have to drop your chosen successor, you should consider alternatives. Look at your employees more carefully and you may be surprised to find that other talent exists. Also take the time to share information with your staff about what it takes to become a leader.
Take the time to develop a leadership pool within your organization made up of employees that have shown initiative and leadership qualities. Remember, not all potential leaders have the same set of skills or expertise. In addition, these employees may not yet have the characteristics you are looking for in a successor but could have the potential to reach your expectations. It is important to fully understand what each potential leader brings to the table and how they could benefit your organization as a whole.
Most people are able to learn more efficiently by taking action. Therefore, by building teams and providing hands-on activities for learning, you can help develop the leaders within your organization. Help your staff encouraging them to solve urgent real-world business problems and collaborate on solutions. This technique alone can be transformational in the growth of your business.
Top Advantages of Succession Planning
Why is succession planning important? In short, it can help you identify and develop talent in your organization with the objective of replacing important leadership positions in the future. There are numerous benefits to filling positions internally, such as the reduction of time needed to search for new hires and enhanced cohesion among teammates. You can also drastically reduce the turnover rate that results from retaining the wrong people.
Achieving business results is also a key component of succession planning. The future visibility of your business requires having the right people in the right place at the right time. To help achieve your business results, you need to consistently develop pools of qualified candidates who have the skills and expertise needed to fill leadership roles. Having these people in the sidelines can be invaluable if an event occurs that requires one or more of these candidates to step into leadership positions. Filling leadership roles internally can also help cut down on hiring costs and reduce lost productivity.
Through efficient succession planning, you can achieve targeted employee development which can result in improved employee engagement and morale, as well as a boost in workforce productivity and swifter goal achievement. With more established leaders preparing for retirement in upcoming years, it is more important than ever to be proactive in your search for successors. This means finding potential talent, transferring knowledge, sharing skills, and identifying weaknesses, early on.
Work With A Professional
When done successfully, succession planning can enable you to retain qualified successors and help facilitate a smooth transaction when the time comes. As we’ve seen, this means a bigger return on investment for your organization, as well as more successful business results long-term. By placing a number of contingencies in the workplace, you can help keep your business in good standing, as well as gain the peace of mind of knowing that you have a proper succession plan in place. For more information about the importance of succession planning or for assistance with your own succession plan, contact the employee benefits consultants at BBG Broker.