Top 6 HR Strategies for Effective Succession Planning

October 8, 202111:45 am5782 views
Top 6 HR Strategies for Effective Succession Planning
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Succession planning is at the heart of talent management. In essence, it is a focused process to prepare talents for future leadership roles. Engaging in succession planning can reduce potential risks to a company by addressing likely openings in a proactive manner. If done well, succession planning integrates a number of other internal processes, such as talent management and employee retention initiatives, and includes an ability to measure the plan’s results. 

The pandemic has changed the landscape of many, including succession planning. What might work in 2016 may not work anymore these days. Moreover, as technology is always improving, HR activities are directly influenced by it. Adjustments are needed in order to successfully carry out succession planning. 

  • Changing of Employment

An estimated 85% of jobs in 2030 that we will be doing have yet to be created and 2030 is less than a decade away. It is evident that the rate of change is already escalating, with no signs of slowing down. In fact, the pace will quicken more. Individuals and companies are both struggling with today’s rapid digital and workforce advancements. People will establish deeper and more complex ties with technology, as well as increasing dependence on automated systems, as these changes are informed and impacted by developing technologies throughout the next decade

  • Job Turnover during the Pandemic

Many individuals lie low in 2020 because they do not want the uncertainty that comes with an unstable new job. This forced people to adapt and find jobs that are attainable, even if it meant they had to switch careers. According to the latest research in 2021, roughly one-quarter of respondents want to make significant changes post pandemic, while the remaining 13% are unsure. This represents an increase of turnover over the previous year.

In a world defined with unpredictability, succession planning remains valuable. Companies with succession planning that involve active efforts to retain their top performers will do far better than others in the post-pandemic turmoil. Companies can also create emergency succession plans as part of their business continuity strategy. To meet transforming workforce and employee expectations, succession planning must improve along the way.

Here are some strategies HR managers can implement for effective succession planning, as taken from Succession Planning ebook by Xpert HR and some updated research of 2021:

1 . Evidence-based Planning 

Many companies do not take the time to plan succession or, if they do, their plan is not strategic enough to minimize the risk of turnover in key positions. In fact, Stanford Graduate School’s report indicates that not only do many companies fail to identify a potential talent pool to succeed current senior leaders, but they also often fail to have a process in place to select these executives.

Reduce subjectivity in decision-making by using a fact-based approach and developing a systematic procedure whenever possible. Since today’s workforce are more data-savvy and data-hungry, succession planning demands a less intuitive and more data-driven strategy. It is time for HR managers to use analytics in making decisions, where they can make targeted participant selection with very specific parameters.

A well-positioned HR department can lead the company through potential business pitfalls by engaging in effective succession planning. The goal is straightforward: developing succession plans that are designed with an eye toward the future and identifying the best talent to take the helm both in key leadership positions as well as in other positions throughout the company.

Read Also: 4 Types of Performance Appraisal Methods a Company can Adopt 

2 . Making Use of HR Technology

AI-powered tools will be of great help for succession planning. One of the softwares to do this is Assessment and development centers (ADCs) tool, which can be carried out online or in a hybrid format. Assessment and development centers (ADCs) are scalable, cost-effective, and customized instruments that aid in the identification of successors in a variety of occupations and levels. Roleplays, situational judgment tests, group discussions, presentations, interviews, simulations, psychometric and aptitude testing, and other related activities are used by ADCs to make key employee selections. 

ADC uses a variety of online methods to measure the extent to which selected participants demonstrate specific abilities. It is a thorough assessment of an individual’s role fitting by evaluating each person’s numerous characteristics for success in specific key functions.  These various assessments give a thorough analysis of individuals in order to identify which positions they are most suited for. Through a variety of perspectives in ADC, decision-makers develop a comprehensive knowledge of the candidates with simple IT requirements and little to no technical challenges and prejudice.

3 . Identifying Potentials in Other Programs

There’s no doubt that the most outgoing and engaged employees are likely to be top-of-mind when considering succession candidates. And, many of those employees may be valid choices for grooming. But, how many high performers or high potentials must be identified? All you have to do is consider roles first, then competencies, so that the most capable end up in critical positions.

To identify, nurture and groom the brightest talent, HR leaders should understand, assess and be willing to use personality and career assessment tools as part of talent management processes. It’s important to use these instruments properly, ensuring data is interpreted well and that all departments understand the value of this type of undertaking.

Moreover, as collaboration is inseparable throughout the HR activities, it is wise to integrate this into identifying top performers for succession. Synchronize with some other HR programs to guarantee efficiency, effectiveness, and consistency. Integrate succession planning into current planning activities and make leaders accountable for the results. Connect with other talent management aspects, such as leadership development programs and high-potential programs. High-potential programs are frequently the first location to seek for possible successors. For example, Indonesian mining companies such as Bukit Makmur Mandiri Utama and Merdeka Copper and Gold often incorporate their management development programs for their succession planning. Without integrated efforts for succession development, strategic planning is just replacement planning; thus, prepare successors for promotion and create bench strength by ensuring individual development plans are in place.

4 . Promote Inclusivity

Talent gaps should be acknowledged and taken into account when planning for the company’s future. The bottom line is to ensure that your policies and practices cast a wide net to be as inclusive as possible of employees who may represent great sources of talent. 

HR leaders need to be alert to the potential for any unconscious biases in selection choices based on preconceived ideas of potential employee talent— for example, overlooking employees who have not been with the company very long, who may be nearing retirement age or whose appearance may be different in some way.

Engage stakeholders in program development and implementation, and aim for transparency whenever possible. Workforce in this era prefers working in an environment where there is a strong commitment to equality, fairness, and inclusivity. It is in your company’s best interests to progressively increase openness, even if this takes time. Inclusion in each talent management program is also emphasized in inclusive succession planning.

5 . Mergers and Acquisitions: Pooling the Talent

Anytime two or more companies come together there is resulting duplication of roles from the top down. When M&A’s happen, the high level senior executives are going to see the “writing on the wall.” Someone is going to either have to go, or be displaced to another role. In some cases, it may be possible to split the role. This is particularly true in the IT area where companies are pointing to the potential need for roles like a CISO (Chief Information Security Officer).

While retention is a critical component during periods of uncertainty that come with mergers and acquisitions, it is imperative that HR leaders move quickly to launch succession planning readiness activities as soon as integration has been achieved.

Another key consideration during a merger or acquisition is how the talent management department will assess competencies that may be desirable in filling specific key roles or evolving business objectives. For example, it’s one thing to have the competency to create value for the company; it’s quite another to have the competency to be a game-changer. HR should lead the development of compensation, retention incentives and termination agreements, which should be consistent with the final merger or acquisition agreement.

6 . Communicate the Plan and its Value

Effective communication is a key factor in ensuring the success of a planning effort. HR leaders should be diligent in explaining the benefits of a communication strategy, and helping to carry it out with major support from the C-suite.

Communicating the plan will help companies answer questions such as: “How can we create an effective strategic succession planning process that values the employees while ensuring a strong pipeline of potential successors?”

Remember, to be strategic, any communication plan must be aligned to help achieve business objectives and desired outcomes. Communicators, with HR leaders as partners, should think about what the company is trying to achieve and then use communication tactics to help get there. 

Having a succession plan enhances the evaluation of employees, business associates, and top executives altogether. It provides HR with the fuel they need to deal with an unforeseeable situation. All in all, HR plays the roles of designer and facilitator in succession planning. Evaluating and making improvements in your succession planning program is essential to meet job demands, as well as people’s performance and career aspirations, which change often in today’s fast-paced environment.

Read Also: New Tech Tools to Boost Talent Retention