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9/4/2007

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Best Practices in Succession Planning

Succession Planning: The Key to Surviving the Talent Crisis

P L AT E A U S Y S T E M S

s organizational strategies evolve to

support a holistic approach to talent
management, traditional best-practices approaches to learning, performance management and career and succession management are being reevaluated and
ultimately, revamped. Just as integrated learning
and performance management have been widely
recognized as integral components of an effective
talent management strategy, succession
management tied to employee development and
career planning is becoming more strategic for
todays organizations. These organizations realize
that succession planning is an ongoing, dynamic
process, not a static objective. In todays highly
competitive war for talent, companies must look
beyond simply replacing workers. Succession
management strategies must focus on developing employees in a way that supports corporate
goals while also empowering employees to
achieve their professional goals.
Though we are currently on the cusp of a new
breed of succession management strategies and
solutions, recent research conducted by Society
for Human Resource Management showed that
more than 70% of companies surveyed do not
have a formal succession planning strategy. This
is especially important now because for the first
time in modern history, todays businesses are
suffering a dramatic loss of their most
experienced members, while at the same time,
facing a huge deficit in replacing and hiring
workers with the skills they need.
According to experts, the convergence of
various trendschanging workforce demographics, retiring baby boomers and lack of
skilled workerswill produce a job surplus in
the next two years. The Bureau of Labor
statistics estimates that 168 million jobs will be
created by 2010, but the labor force will reach
only 158 million, resulting in 10 million unfilled
positions. Demand for qualified workers is far
outpacing supply, fueling a talent crisis that
will directly impact organizations across a wide
range of industries. Manufacturing, healthcare
and technical fields are already grappling with a
scarcity of skilled, educated workers. Highdemand fields including engineering and IT and
specialized industries such as utilities, energy
and transportation are not far behind.

Win-Win Succession
Management
With recruiting unable to solve this
problem, companies looking to circumvent the
talent crisis are increasingly looking inward and
adopting succession planning strategies that
focus on developing and nurturing their
existing talent. Historically, the most successfully run companies are those that have made
long-term investments in their employees. By
investing time and money in developing talent
internally, these organizations have been able
to seamlessly transition when critical talent
retires or otherwise exits the organization.
Adopting a win-win succession management strategy allows organizations to identify
critical jobs, potential successors and skills gaps
while providing employees with insight into
available career options and the tools to plan
and achieve their career goals. This integrated,
approach optimizes the benefits for employees,
management and the organization as a whole.
Succession plans that are tied to employee
career plans are proven to improve morale
and productivity. Organizations that support
career development by allowing employees to
explore new opportunities within the
organization, and encouraging job mobility are
more likely to have employees who actively
participate in their career development.
Because these employees are more likely to
seek opportunities within the organization,
employee retention and overall satisfaction
increases, while knowledge drain and loss of
critical knowledge decreases.
As companies continue to struggle with the
talent crisis, the following best practices have
proven valuable in guiding companies towards
successful succession management:
Focus on Critical Positions - Organizations
have traditionally focused succession
planning on senior management positions.
The labor shortage requires expanding
succession planning to other critical
positions that have the biggest impact on
organizational performance. For example,
in life sciences this may be key research
and development staff; in utilities, field
service workers critical to continuous

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service delivery; and in healthcare, nursing

care professionals.
Integrate Employee Career Plans - An
integrated approach focused on identifying
and retaining talent must be supported by a
solution that can seamlessly link an employee's career and development plan with
the organization's overall succession plans.
Encourage Proactive and Actionable
Development Plans - Effective succession
management relies on organizations to
provide opportunities and proactive
suggestions for development that increase
the readiness of candidates for future
positions. By linking learning and
development with succession and career
planning, organizations can positively
impact the availability of talent to meet
future requirements.
Evaluate Depth, Breadth and Cohesiveness of technology solutions - Investing
in best-of-breed solutions that can expand to
address the entire talent management
lifecycle from developing to managing,
optimizing, and rewarding will enable
organizations to maximize workforce productivity and ensure long-term business
success. Web-based succession planning
solutions provide timely, continuous access to
processes and data, allowing employees to
proactively own their career and development plans, straight from their own desktops.
By moving succession planning to the
forefront of the corporate agenda and taking a
proactive approach to leadership and employee
development today, organizations are laying a
solid foundation for smooth leadership
transitions in the future, thereby sidestepping
the talent crisis.
Executed as part of an overall strategic talent
management initiative, succession planning
enables organizations to identify their current
and future needs, and helps them align and
develop talent accordingly. For succession to
truly succeed, however, companies must focus

on their employees' career development.