Business succession planning is vital for any business. It covers preparation for the smooth transition of crucial roles within a company to ensure operations continue seamlessly when leadership or critical employees are promoted, leave, or retire. Succession planning should cover all vital employees, not just upper management. Our friends at Focus Law LA discuss why in more depth below.
Why Is Business Succession Planning Important?
There are many reasons. Here are just four of them:
- Business Continuity
Customers don’t care about who works there now or who will in the future. They want their wants and needs met. Without a succession plan, you risk disruptions that may cause operational problems large and small. A well-executed succession plan should ensure you have capable people ready to work in critical roles on short notice, which helps to maintain operations and customer satisfaction.
- No Need to Fill Important Jobs on an Emergency Basis
Urgently hiring key employees can be costly and risky. You risk not hiring the right outside person because the search is abbreviated and not as thorough as it should be. You may also hire someone unsuitable for the job because you’re desperate to fill the opening. Thanks to your succession plan, you will prepare ahead of time, reducing the costs of emergency recruitment and ensuring you have the right person in the company ready for the role.
- Existing Employees Will Be Ready to Go
There are benefits to hiring outside candidates, but there are also costs. The person will have to get up to speed on important information. Given what they need to learn, it may take a long time before the person can make a substantial contribution. Current staff know and should value company culture, know clients and customers, know the company’s strengths and weaknesses, and have positive changes in mind before starting the job.
- Improved Employee Satisfaction
When important positions open up, employees take on additional responsibilities. This can cause increased stress and dissatisfaction and, in extreme cases, burnout and turnover. A succession plan ensures you have prepared employees to take on new roles and put in the necessary work from day one. Promoting from within also shows your team there are growth opportunities in your company, fostering a positive work environment and encouraging people to stay.
How To Create An Effective Succession Plan
Your efforts should include the following.
- Assessing Your Staff Needs
Evaluate your company’s future needs. What challenges will you face, and how will you address them? What changes might you need to face, and what do you want to maintain in the future? What knowledge, skills, and experience will future management and critical employees need to succeed?
- Identify Candidates for Future Roles
Given your current staff, who will be good candidates for future openings? Engage your team to understand their career goals and interests in advancement. Spread a wide net beyond your most senior staff and consider those with the right skills and leadership potential. If there isn’t anyone on staff you feel is right, or you have few options, hire the right outside people now to perform these future functions.
- Provide Learning and Development Opportunities
Preparing successors for their future jobs is more than identifying them. If no one is “ready to go,” you should arrange for training and development. Consider job shadowing, mentorship, transfers, and formal training that matches employees’ career goals and the company’s expected future needs. Track their progress and get their feedback to ensure that these employees and the company are heading in the right direction.
An effective succession plan may significantly improve your company’s resilience and chances for future success by ensuring continuity, reducing recruitment costs, avoiding hiring the wrong people, and enhancing employee satisfaction. You may also want to consider consulting with a partnership dispute lawyer for peace of mind.
The only thing that’s permanent is change. Will you be prepared for it?