Personal Finance

Why your firm needs a succession plan

succession

A team working together. PHOTO | FOTOSEARCH

Summary

  • While the role played by every employee is important to a firm, some roles are at the very heart of the company’s operations and hence the need to be safeguarded at all costs to ensure continuity.
  • Personnel which displays potential and a disposition to take up higher roles can be developed and their skill sets enhanced.
  • The plan should be brief and concise. Ensure that it is well supported by management because these are the people who will implement it.

There is high turnover in the labour market as skilled people leave to seek greener pastures or turn to personal engagements.

While the role played by every employee is important to a firm, some roles are at the very heart of the company’s operations and hence the need to be safeguarded at all costs to ensure continuity.

This means that in the likely event that the positions fall vacant, either by death or an unexpected departure of key members of staff, company operations will suffer if there is no proper succession planning in place.

Depending on the importance of the roles in question, the move can affect a company adversely. Every company should be prepared for such an eventuality by putting in place a succession plan to avoid disruptions when a key member of staff suddenly leaves.

Succession planning is a deliberate system put in place to identify and nurture talent to fill critical positions.

A succession plan is also necessary in managing the continuity of family businesses or small firms in the event of the death or retirement of the founder.

Chief executives of companies with a succession plan in place say the system provides training to broaden employees’ capabilities, while ensuring that they look forward to staying in the company for long.

Typically, this is done by ensuring that team members are trained to improve their skills and comprehension of senior positions.

Personnel which displays potential and a disposition to take up higher roles can be developed and their skill sets enhanced.

This does not only provide for continuity but also cuts costs and liabilities that come with recruiting new staff. This also improves staff loyalty as they gain confidence that their future and growth in the company is secure as long as they perform well.

Succession planning also helps in demonstrating to staff that the company cares about their career growth and development.

This motivates them to excel in their obligations, in the awareness that their hard work and devotion will one day be rewarded with a higher and more rewarding position in the company or organisation.

Whenever I train staff one of the most frequently asked questions is how a company can come up with an effective succession plan.

Part of the succession planning process includes a review of your existing personnel and their skill sets.

This helps you as a CEO to identify areas your staff could benefit from in terms of additional training and development, or gaps in your business that might need filling.

A succession plan has to be aligned to the business plan. It should take stock of the skills and behaviour needed to achieve the business plan, and then audit staff to check out what each offers the company.

When crafting the plan, ensure you have long term and short term strategies and consider long and short term goals as well as objectives of the succession planning.

Then categorise the most crucial roles within the organisation and give them a higher level of importance in the plan.

Focus on the previous and current performance record of each employee and also consider their potential.

Don’t forget that not all staff want to move upwards; some employees’ skill sets and potential may lie in other ‘‘sideways’’ roles within the company.

Then align your succession plan with other human resource functions such as recruitment, training, development and performance reviews.

The plan should be brief and concise. Ensure that it is well supported by management because these are the people who will implement it.

Also ensure that the plan is well-communicated to all staff or it is bound to fail.

With commitment to succession planning, and with the above tips in mind, I am positive that your company will be well prepared to handle any key staff departures with quick in-house replacement.