Succession planning processes involve an organisation developing a strategy for onboarding and training staff to ensure that when a person carrying an important role leaves the business, there is a suitable replacement. This is incredibly important where key roles in senior positions are concerned. It ensures there are no gaps and that key roles are not filled by employees who are unprepared for the requirements.
Succession planning is therefore critical to ensuring your business can continue to thrive when key people leave. A well-thought-out succession plan reduces the risk of significant disruption when you lose senior personnel.
Without a succession plan, companies can find themselves without adequate management and leadership where it is needed most. Without a clearly defined parameter for succession plans, businesses can either find themselves with gaps among their teams or with the wrong fit. And that’s before you even consider the cost implications for hiring and onboarding, which can easily go into the thousands for each role – a costly error of poor succession planning.
All businesses fit the criteria for succession planning. However, for family businesses planning for succession is even more crucial. Employee succession plans are there to address changes that occur when employees leave or get promoted. It is smart to have someone who knows the business and the role ready to move up into a position that becomes available. The alternative is a huge gap or someone doing two roles instead of the one they have been promoted into.
Organisational succession planning sets a business up for success. Understanding the benefits that arise from an effective succession plan will support HR initiatives to incorporate with their talent management and succession planning model. We’ve highlighted the greatest benefits to businesses that prioritise succession planning within their business model:
- Think of it as business insurance – any top talent can be lured away to another company or can just leave – it is smart to have a plan in place to ensure there are other candidates who can take on that role.
- Identifies future leaders – find the positions that are most critical to the future success of the company and the internal candidates with the values, skills and desire to take on those positions.
- Structure for development and training – by finding potential successors early, you will have time to develop a training and development program to ensure that they have the skills required to take on certain roles, in advance. This will also motivate other employees to work hard, as they will want the opportunity to develop.
- Brand identity – by creating an internal succession plan, you get people from within your business moving up and maintaining the brand identity, the company culture and its core values.
- Cuts recruitment and onboarding costs – by promoting internally, there is less need for onboarding and the high costs of recruitment.
- Increased engagement – employees who know there are growth and opportunity awaiting will receive a self-esteem boost, resulting in a more engaged workforce.
In summary, succession planning is vital to business success, and even more so in the case of family business. It recognises the value of key roles within the family business functions, the importance of knowledge and skills within your talent pool, and prepares the business for the time when staff and key individuals will inevitably depart at one time or another.
Succession plans prevent family businesses being caught unaware with a well-crafted model in place to quickly and effectively fill a position. It reduces recruitment and onboarding costs and protects your family business by ensuring there is a clear line of action for filling crucial leadership and management roles within your company.
( All factual and statistical information presented in this blog has been obtained from an extract of an article from the Thomas.co/resources/succession planning ) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt
At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on [email protected].