As the market picks up, demand for the most talented people also increases and with this uplift business owners and managers will look to incentives and retention strategies to remain competitive and keep their best employees on the team. What will you do when and if people occupying key roles in the business do decide to leave? Do you have a succession plan?
It’s an inevitable reality that, for a variety of reasons, employees will resign, retire, be terminated, get sick, or die. Whether you’re the owner of a small business or managing a large corporation, its critical you are prepared for these changes, and having a clear succession plan in place helps to future proof your business for long term success.
What is Succession Planning?
Within both small businesses and larger organisations, effective succession planning means continually identifying and developing existing employees with the objective to grow their capability and willingness to take on more senior positions, as and when those positions become available.
As a small business owner, this is perhaps even more important despite there being fewer positions. Some level of employee turnover is unavoidable, so knowing who can step up, or how to best replace your people when they leave, means these changes are less disruptive to the business. Planning for the future in small business also includes thinking about the role you want to have as the business owner or director, and then identifying people with potential and interest in taking on aspects of the business management. As an example, as the business grows, you’d perhaps hire a marketing assistant and over time look to develop that role to a management level so you can step away from this area and focus on other areas needing your attention.
What are the advantages of forward planning?
Developing and communicating your succession plan has far reaching advantages beyond your own peace of mind and future proofing the business. Your employees will have more confidence in leadership knowing a plan is in place, while seeing defined pathways for their own career advancement encourages your best talent to stay with the business long term.
For both employers and managers, being proactive and planning for future needs means your efforts in recruitment, training and other development activities can be strategically aligned to the leadership succession plan you’ve developed for the business.
What You Need to Consider
Whether you have a small business, a larger company or a multinational corporation, these are some of the most important factors to consider when you begin developing a succession plan for your business:
Plan ahead
Identify those roles that would cause the most disruption to the business if the person in the position were to leave. How difficult would it be to replace someone with those skills? It can take time to recruit the right people for leadership roles, and it also takes time to develop internal candidates to take on these roles, so it is important to plan ahead for these critical roles.
Communicate the plan
Documenting and sharing the plan for succession within the business will gain your employees’ trust and understanding of the process, enabling them to become active participants in the process. Keep it high level and realistic so people are interested and engaged in the process but are not disappointed if their expectations cannot be met.
Provide feedback and take note
Employees truly value feedback and when someone shows leadership capabilities, excels in a presentation, or delivers over and above on a project, it’s important to acknowledge their efforts. Aim to also keep a file or notes on top performers and examples of their achievements as this will become a handy reference point, not only for when positions become available, but also in selecting candidates for training and development opportunities and preparing for performance reviews.
Develop skills through experience
As every business is unique, so too are the skills and knowledge required to perform well and meet the specific requirements of the business. Although training and education are important, providing employees opportunities to learn different aspects of the business through on the job training and experience is invaluable. This can be achieved through job rotation, involvement in special projects and teams, or covering for a more senior person when they take leave. Treat these as a trial run to assess the suitability of the person for the role or where they may need more training.
Offer training where needed
As you identify your best employees, it’s important to also acknowledge any gaps in skills and offer both formal and informal training or mentoring to help people develop skills to perform in the roles they may fill in the future. Having more capability across the team gives you more options should you have people leave critical roles.
Review regularly
Over time, as the business grows there will be changes to the organisation’s structure and the roles required in the business may also change. In turn, your succession plan needs to be reviewed and adapted where necessary to take into account these changes and remain relevant to the long term goals of the business.
If you need support to map out your succession plan, get in touch with our team of HR specialists who can develop a plan specific to your business and your long term business goals.