The greatest shift in workforces is about to take place – have you got a talent succession plan in place for your critical staff? If the loss of a person results in a direct impact on performance, strategy or process your business is at risk.
A recent study highlighted that as much as 40% of the global workforce are considering leaving their employer over the next year - creating the largest shift in workforces ever seen. If the Pandemic was the ‘Great Disruption,’ then the second wave impact currently hitting workforces could be considered the Great Disruption 2.0, as employees demand greater flexibility and job satisfaction.
For organisations, knowing how to prepare for such a shift will require an assessment of genuine critical roles across the organisation - namely within leadership - to ensure they focus their retention efforts on the right people.
It’s time for executive teams and HR to assess what would happen if a leader in their organisation were to leave tomorrow - would there be a direct impact on performance or strategy? Would key processes stop or risk increase? If the answer is yes to any of these questions, it's time to think about talent succession planning.
Succession Planning - Getting the fundamentals right
Succession planning should be undertaken as a big picture process - one that encompasses talent management and strategy. Rather than being a ‘set and forget’ plan, it should be considered as an ongoing key business process, critical to your organisation's success.
Whether you're a three-person company or a huge multinational corporation, it's your leaders and emerging leaders that are critical to the success of your business. When done correctly, a succession plan has real power to form not only the growth of these individuals but the business as a whole. That’s because a talent succession plan allows an organisation to take a concerted effort into how it develops its people and acts as a way to give feedback.
The objectives of succession planning, therefore, become much broader than simply filling vacant roles, and include:
- Aligning your organisation to critical roles
- Understanding your talent pool
- Exploring development actions in-depth
- Aligning on succession planning feedback
- Carrying out actions across the whole organisation.
At a high level, there are some absolute fundamentals organisations must understand to achieve these objectives when undertaking talent succession planning. Unfortunately, many businesses forego these. They include:
- Knowing what the employee wants: This will enable you to understand whether the employee is willing to move into the role.
- Leaders own talent, not the line manager: Your leaders must know the capabilities of your organisation and where that talent might go - it shouldn't just be the line manager who owns these relationships.
- Align opportunity and talent: Make sure you have plans for your best talent if no key vacancies will be available any time soon.
- Investing the time to develop an employee (and telling them): Telling the employee is a powerful part of good succession planning, but it's also a core responsibility of the leader. This then gives you time to develop the employee in question.
How do you know which roles to plan for?
It's not feasible to plan successors for every single role in your organisation. Instead, it's possible to develop a formula so you know where to focus your efforts. This first involves reviewing all the key positions in your organisation and working out which roles are critical (i.e. which roles have a direct impact on achieving the company's strategy, reducing the risk, or creating a key business deliverable). For a large organisation, there can be anything between 10 to 30 critical roles.
It's important to note that sometimes the person isn't actually what's critical; instead, it might be that the wrong system or process is in place which has made that person critical, rather than the person.
Once you've identified the crucial roles, assign a risk level. If a position is likely to be vacant in the next 12 months, assign it as high risk. If it is between 12-24 months, assign as medium risk, while applying low risk to any role that could be vacant in 24 months or more. These timelines will depend on the nature of your organisation.
How do you understand your talent pool options?
When assessing your talent pool, it’s important to assess and understand all the options available to you.
First, review whether you have a person who's capable and ready. Remember readiness is quite flexible - as an organisation you need to be prepared to upskill employees, it's rare to have the finished product right from the beginning. You also need to consider whether that person is willing. It's all very well having the talent, but if you need them to take on more responsibility or even move cities, you need to know they are prepared to do this.
Then, consider when the job you have earmarked for them will be available. If it's not going to be for a while, think about whether there are other actions you can take to keep that person happy and willing.
Just as you assigned which roles are high, medium, or low risk, look at your talent pool and assign levels of readiness. If someone will be ready in the next 12 months, they are "ready now". If they will be ready in 12 - 24 months, assign "ready later". For those who will take over 24 months to develop, consider them "ready in the future." If you have more than one employee in each bucket, decide who is the lead candidate and why.
Don't forget to also review your managers' capabilities when engaging in succession planning. Consider what skills your managers need to effectively contribute to succession planning and help build your organisation's future talent pipeline. This means ensuring managers aren't just basing judgements of employees on their performance now, but also their ability to do another job in the future.
Finally, there are some key questions you should clarify as part of this process:
- How do you define talent in your organisation?
- Are you clear about what the individual wants?
- Are you developing them for the next move?
- Do you clarify readiness levels?
Succession planning is about retaining talent, growing it, and bringing the best out of your people. If you'd like to talk further about the above questions or any of the themes on the same topic, please reach out to BDO's People Advisory team today.