What Is Succession Planning: A Comprehensive HR Guide

November 20, 2023 by Rebecca Ahn

When employees leave your organization, you need to have a plan to retain all of the knowledge that they have gained over the course of their tenure. This means having a plan for another employee to seamlessly step into the role and keep your business marching forward. This process is known as succession planning, and it’s more important now than ever.

 But what is succession planning in HR and how do you start implementing a succession plan? What do you need to know for your plan to be successful?

Since these questions are so common, we’ve created a full guide all about succession planning, which will cover the following:

  • What is succession planning and why is it important
  • The five essential steps in succession planning
  • What tools you may need to get started with your own plan

Let’s jump right in.

What Is Succession Planning?

Succession planning is a process that focuses on the development of new leaders in an organization so that they are ready to take over those leadership roles when the current leaders leave the organization.

In other words, succession planning is a way to ensure that your organization experiences little to no loss of knowledge or progress through talent transitions. When one leader steps down, another should be ready to step into the role, allowing business to continue smoothly.

What is a Succession Planning Example?

If, for example, you neglect the development of your future leaders, you could wind up with an empty senior role that you cannot fill internally. This forces you to look outside of the company to fill that leadership role, which is a process that can take a much longer time and cost you more money.

It’s important to remember that succession planning isn’t only about older workers retiring. Although retirement planning is important, when it comes to knowledge transfer and talent retention, younger workers can also perform jobs that no one else in the organization can handle. If one of your staff is working in a role with no one else has an understanding of or the skills to succeed in that role, you are setting yourself up for a talent gap if that staff member ever leaves.

To avoid this scenario, it is vital that you identify those crucial skills, knowledge, and organizational practices necessary for the role in question, and create a process for passing them on to prepare your next generation of leaders. This will ensure the seamless movement of talent within your organization.

Succession planning involves taking a deep look into what your company values, what knowledge is most important for your business to retain, and what skills learned over the course of your internal career path are hard to replace.

Once those key areas are identified, your company can start taking steps to ensure that those skills are not lost when employees leave your organization. It’s a way of future-proofing your organization, making sure that it can continue running even after turnovers take place.

What Are the 5 Steps in Succession Planning?

Let’s take a deeper look into what it takes to start succession planning.

Like we said above, the first step in the process is to identify what skills and knowledge (and roles) you need to retain. 

  • Is there a process that is super unique to your company? 
  • Are there leaders who’ve worked in their position for a long time and know the ins and outs of every task? 
  • Can you identify leaders working in roles that will be hard to fill once they leave?

Chances are you can identify areas like these across all the levels of your organization, from your top level leadership down to the individual contributor level. 

Once you have taken a step back and looked at the talent you have inside your company, you need to create the actual plan to ensure that you can retain that talent. But what does that look like?

A succession plan can be viewed as a series of events that happen over the course of the employee lifecycle. Here are five events you need to focus on to cover the essential succession planning steps:

Succession Planning Step 1: Onboarding and Training

The succession planning process starts at the very beginning of the employee lifecycle, which encompasses everything that happens during an employee’s time at your company. This first step entails ensuring that your onboarding process completely prepares new workers for their role, while also identifying areas they may need to develop further.

The goal is to make sure that your onboarding process covers all of the tasks that the employee will have to do in their new role, and tests to see what talents they already have mastered versus which ones they may need to develop further.

What does this have to do with succession planning? For starters, it helps you figure out where your existing talent pool is lacking. Identify what skills in your organization need to be strengthened so that if someone should leave, there is someone else there ready and able to take their place. 

By paying close attention to the talents of your hired staff as they onboard into their new roles, you can be better prepared for the future. The onboarding process is the start of your talent development plan. Workers can then develop their talents as they continue to work for your organization. 

So the onboarding process is about more than just doing paperwork and getting the employee ready to start working. It should be designed as a thorough and cohesive process that involves all levels of your organization to ensure an optimal onboarding experience that is merely the first developmental step with each employee. Who knows, the person you just hired may stay with your organization for decades. They may be one of your next leaders someday.

Succession Planning Step 2: Leadership Development

Leadership development is a continuous process that starts as soon as the employee starts a new role and should be ongoing throughout their tenure with your company. It’s vital for you to offer workers ways to improve their skills because doing so will engage your staff, help retain them for longer, and greatly improve your business practices over all. 

After onboarding is complete, it can be easy to let employees go about doing their day-to-day tasks without paying attention to the bigger picture.

Of course, doing quality work every day is important and can present its own challenges. However, those daily tasks and workflows should also be coupled with opportunities for workers to become better employees and leaders. In order to have leaders primed to take over vacated roles, your organization needs to develop and prepare them to do so over the course of their career.

Many high-powered CEOs claim that their most important task is identifying and grooming future leaders to ensure the continued success of their companies. This is true with smaller companies as well. Every company faces turnover, so every company will need leaders and workers who can step up to perform a variety of tasks when needed.

If you can create an environment of continued learning in your organization, you can ensure that a wide variety of your staff progress through their careers in a way that will enable them to eventually take over for more senior staff.

Essentially, continuous leadership development is a way of ensuring that succession planning continues to unfold at a smooth pace. If your organization is short on leaders, how will you know who should step up to the plate when you have a vacant leadership role?

This pairs nicely with our next point around ensuring your workers have the ability to develop their personal career goals in their chosen areas of expertise. 

Succession Planning Step 3: Career Development

It’s equally important to develop both your staff’s professional skills and personal career goals. While it can be easy to neglect a worker’s personal career ambitions while they are at your company, this can prove detrimental to your succession planning. So it is important to keep an open conversation with employees to understand what motivates them, what will retain them, and what they want to achieve in their career. Workers will be more likely to stay with your organization when you show your support for their personal and professional goals.

In an effort to retain their staff, organizations often offer a wide variety of perks and benefits that can entertain more than they engage. The problem is that these types of benefits don’t last as long as they seem like they would.

One of the best and longest lasting benefits a company can offer its staff is to give them ways to continue developing personally and professionally. Some companies may see this as a negative thing, fearing it will entice employees to leave the organization once they gain new skills. However, this is a largely unfounded worry. Of course, providing great career development to your staff means that some people will naturally grow out of the role they were hired for as they gain skills for others. 

So part of this step also involves making sure you are ready to provide new projects and challenges to staff members who want to give something new a try, even if they don’t fully align with what their day-to-day tasks might be.

It’s all about retention at this point. This is especially true of rapidly growing companies with rapid business growth who often face a subsequent higher turnover rate. If you offer ways for your workers to continue to grow along with the business, you are far more likely to retain them. 

The key is providing a path for continued learning in your organization that allows your staff members to develop their talents and use them where they are applicable and valued. creating a positive and promising work environment that encourages your staff to stay put. This in turn allows you to maximize your workforce planning to ensure that you are always using your available talent where they are needed most.

This segues us nicely into the next step of succession planning all about forming a proper workforce plan.

Succession Planning Step 4: Workforce Planning

This step is all about making sure that your talent resources align with your business needs. Workforce planning is essentially the process of identifying your business goals and the allocation of talent and personnel you will need to achieve them. 

Companies that are proactive about their workforce planning have a huge competitive advantage over those that aren’t. Workforce planning allows you to stay nimble while developing the right talent for the right job.

While that might seem simple enough, this is a very common step for organizations to overlook or forget to do. Maybe they don’t know how to get started, or don’t have a clear guide to follow, and keep putting it off in favor of more pressing daily tasks. Whatever the reason, this step is a crucial part of the succession planning process to help your organization continue running smoothly. 

This begins with devising a strategic workforce plan that will best position your organization to meet your business goals. This requires input and collaboration from HR, recruitment, finance, and business analytics. The key to running your business smoothly is to get efficiently organized.

Once you have a solid workforce plan in place, this will enable better business forecasting and problem solving, strengthen your leadership development strategy, and help everyone achieve more success across the organization. 

In a way, succession planning is just one part of your larger workforce plan, which goes beyond preparing your staff to smoothly step into different roles to also encompass making sure you are finding, training, and retaining the right talent for your business needs. So it stands to reason that workforce planning is a necessary part of successful succession planning. Their goals are aligned, both centering around ensuring the right people are in the right roles for themselves and the organization. 

Where they differ is in their scope and timeline. Workforce planning focuses on the more immediate situation, ensuring current business needs are always being met, and therefore is more budget and staffing driven. Succession planning, on the other hand, is more focused on the future, using hiring forecasts and internal resource projections to identify what roles may need to be filled and how to prepare successors for them. 

This brings us to the final step in succession planning on proactively planning for when your leaders do ultimately step down.

Succession Planning Step 5: Proactive Exit Planning

To round out the succession planning process, it’s important to understand the full employee lifecycle from onboarding to offboarding. The employee exit is the last part of that cycle, and is once again a crucial part of the succession planning process. 

This step is often referred to as replacement planning. You want to make sure that you have a plan ready to replace talented individuals–whether they are younger or older workers–when they leave your organization. 

This is typically what people think of when they hear “succession planning.” And while, as we’ve explained here, succession planning in HR starts long before offboarding comes into play, this last step in the employee lifecycle is the crucial final piece of the succession planning puzzle.

We mentioned earlier how many CEOs at major companies consider a big part of their role as leaders is to be identifying and preparing people who will take over for them and other senior staff when they make their exit. The mark of a true leader is someone focused not only on growing themselves but also growing others around and under them. 

When it comes to succession planning for CEOs, there is usually a lot of pre-planning involved, even when their exit is more sudden and the board has to figure out a way to get a new leader in place quickly. Whether a C-level executive’s exit date is set in advance or comes as a surprise, there is a lot riding on the smooth transition of passing the reins to their successor. So especially in these cases, the earlier the preparation for that begins, the better. 

While succession planning isn’t only applicable at the C-level, it can be very beneficial to examine how companies identify, develop, and transition in new CEOs and top-level executives. This will give you a stronger answer to what is succession planning at its core, and how much really ought to be put into it. 

When dealing with high-level succession planning, or indeed any level of succession planning, here are a few key tips that will help you succeed:

  • Engage stakeholders: Identifying areas of succession planning should be a process handled by key company stakeholders, current leaders, and HR together. The more input you have, the better you will likely be at finding a proper replacement.
  • Assess internal candidates: If you have been grooming future leaders in your organization, look at which ones would fit the soon-to-be vacated role. Decide whether looking outside of the company will be necessary to consider as well.
  • Conduct tests: There’s no better way to see if a future leader is up for the challenge than to test them and see where they stand. There are many ways to do this including giving them special projects, offering internships or training programs, evaluating their DiSC leadership assessment, or administering other tests designed to gauge their abilities in the short term and long term.
  • Onboard the successor: This is the most underserved part of the process because, once a new leader is tapped, many organizations believe they are ready to go and nothing more is needed to be done. However, succession planning doesn’t end once the successor is brought on. This is where the employee lifecycle begins anew, and we come back around to the importance of onboarding and development. 

Looking at the steps to executive-level exit planning can give us a better understanding of how to answer our original question: what is succession planning and why is it important? The solution is to look inside your company, conduct an honest examination of which leaders are ready to move up, bring in as many eyes as possible to ensure that you are making the right choice, and then onboard and develop them properly in their new role. 

This can be applied to every level of your organization. For example, say you have a senior staff member in a valuable role who is looking at retirement. This person may not be in the C-level of your company, but they have a whole plethora of knowledge that you need to retain for your organization to continue marching forward. This role also needs a succession plan because without one you will not be able to retain that knowledge, creating a disadvantage for your business and the rest of your staff.

For this type of exit planning, you should use similar steps from our CEO example to ensure that your impending talent gap is successfully filled. If possible, this can involve having the impending retiree phase out of their work by mentoring their successor. It largely depends on your corporate culture and how well you have developed your internal talent ready to step into the role prior to the exit. 

What Are the Best Tools for Succession Planning?

The core message here is that successful succession planning in HR means being proactive about planning your staff exits–at every level of the company–to ensure that you thoroughly evaluate, prepare, onboard, and develop your successive talent across their entire employee lifecycle so they are ready to smoothly take over the reins when you need. In order to do this, you may want to employ the use of some tools and resources. 

For example, you may want to review our employee lifecycle guide to familiarize yourself with every step of the process as you get started with the onboarding phase. 

Then, as you get into the steps around leadership and career development, it can be helpful to bring in outside experts who can help customize and implement strategies that fit your specific business needs. At Careerminds, we offer in-depth leadership coaching programs that will empower your leaders to harness their strengths, align their career aspirations with their values, and achieve a higher level of performance. 

At the workforce planning stage, there are a multitude of great workforce planning tools and models available that are designed to help HR professionals with proactively planning and predicting your workforce needs. 

Among these is our basic guide to workforce planning that you can get free right here:

Then as you prepare your exit planning step, it can be helpful to follow an employee exit and offboarding checklist to be sure you don’t miss anything. If possible, it’s also a good idea to outline a process for the exiting employee to mentor their incoming successor, especially for leadership roles. 

Remember that, for these higher-level roles, individuals should be identified and tested to see if they have potential to take on a more senior role. This process should involve every stakeholder across the organization to ensure success, as well as some key valuable tools to assist you with the identification and testing of your talent. This might include the DiSC leadership assessment we mentioned earlier, or perhaps some outside support from a specialized provider such as our executive coaching solutions

Whatever tools, tactics, and services you employ, make sure they fit with your specific company values, business goals, and workforce concerns. It’s never too early to start thinking about your succession planning strategy, both to optimize your current workforce planning needs and prepare your organization to continue running smoothly when any valuable employees leave in the future.

Succession Planning: Final Takeaways

So what is succession planning in the end? It is a way for organizations to ensure that they have suitable leaders and talented staff members ready to take over the roles of departing staff once they make their exit.

Remember that succession planning in HR is a lot easier when you have been working at it over the course of the employee lifecycle. If you properly onboard your new talent, train and develop them over the course of their careers, and allow them to personally and professionally grow in your organization, then finding new leaders ready to take over senior roles that will be vacated soon will be all the easier.

The point is to make sure you are always gathering ample external evaluation of your current talent, and then developing them into a rich talent pipeline that aligns with both their personal goals and the organization’s business needs. 

There is no such thing as a “ready now” candidate. So make sure your succession planning addresses every step of this process. Having a plan on paper allows businesses to productively manage their workforce while also ensuring that there will be no gaps in their talent pool.

Succession planning can change depending on what staff members you’re talking about. For example, finding and grooming a replacement CEO is a bit different from finding a successor for perhaps a more creative or technical role.

However, despite these differences, there are many more common tips that apply across the board. Succession plan at any level starts with onboarding, continues with leadership and career development, involves collaborative workforce planning, and comes full circle with proactive offboarding. The key is to continue developing and assessing your talent while also paying close attention to the needs of your workforce and business goals.

By following a solid succession plan like this, your business will be prepared when a senior staff member steps down due to retirement, a new opportunity, or whatever else may pop up. It also helps you future-proof your business by forcing you to examine and plan your workforce needs in advance, making sure that talented individuals transfer their knowledge before they exit.

Want to learn more about succession planning? Check out our free downloadable guide here
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Rebecca Ahn

Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.

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