What does Succession Planning Involve?
Succession planning is a key component of the talent management cycle, aimed at ensuring the long-term success and stability of a company. It involves identifying key roles that are critical to business operations and developing internal employees who have the potential to fill these roles in the future. A succession planning development plan is the proactive strategy to plan the transfer of ownership and management, and is used to facilitate growth, exit, or retirement.
What are the benefits?
By proactively preparing employees who have high-potential, succession planning helps build a strong internal talent pipeline. It also enhances employee engagement and retention, as individuals are given clear pathways for growth and leadership opportunities.
From a strategic perspective, having a clear succession plan preserves the value of the business by removing key person risk. When employees are successfully promoted into leadership roles, it typically demonstrates that they are strong performers with a clear knowledge and understanding of the business and a reliable disposition. A strong and stable management team is important to both potential investors and buyers alike.
