Succession planning is the process of identifying upcoming leaders to replace employees who are retiring. It also involves preparing employees for the transition. As more and more employees retire from the workforce, planning for succession has become a major concern for organizations.
Reports show that Baby Boomers are retiring at a rate of about 10,000 per day. Moreover, the idea of what retirement means has changed over the years. Many older workers are cutting back their hours or accepting contract work rather than ceasing to work at all. This may give your organization more freedom to define a succession plan that works best for you.
Regardless of when your older employees decide to leave, it is important to have a plan to replace them when they do. While this can be a precarious situation for both the employee and the employer, there are several ways to handle succession successfully. By properly preparing for the inevitability your employees will retire, you can make the transition smoother for everyone involved.
To do well with any succession planning strategy, there are some steps you can take. These include:
While it can seem like a big job, there are some tools that can help you create a succession plan. Several templates can be found here.
When it comes to planning for succession at smaller businesses, it can help to have a team of individuals that can guide the process. This team is there to help handle issues with succession. They are the ones that will deal with finding new leaders for the company and ensuring that the business does not lose the knowledge and wisdom it has acquired under the current leadership.
As with any company, the key factors of identifying leadership talent among your employees, transparency within the business and training for those set to take on new roles within the company are still important. They may take place on a smaller scale than large corporations but small businesses need to have plans for succession as well.
Succession planning templates specifically for small businesses can be found here.
It can be an emotional time when one of the leaders in the family business decides to retire. In order to handle the transition well, there are several important steps that need to be taken. These are similar to other succession plans but also include legacy planning.
Transparency - As with any succession plan, it is important to have a written strategy about when the transition will happen and what will be involved. This helps guide those employees who remain with the business. It gives them a clear idea of what they can expect and eliminates uncertainty about the future of the business or their jobs.
Identify successor - Even in a family business, employees should be informed about who will be taking on the leadership role. That successor should provide a clear road-map that lays out the direction of the business over the coming years. This helps employees feel more secure during the transition. It can also help reduce the likelihood that there will be a lot of turnover during the succession process. Many employees who feel insecure in their positions or the future of the company may look elsewhere for work. Thus, by keeping them informed of what to expect, they feel more engaged and committed to the business.
Legacy - Unlike other businesses, family-run organizations should have a special section in their plans for legacy. This is the consideration of what you are passing along to the next generation, which in this case would be younger family members. When you are planning to pass the reigns along, take some time to honor the family part of your business. That could include remembering those who came before you or planning something special for those who will come after you.
Mentoring can be a great tool that can fit into any succession strategy. Once an employee with leadership capabilities is identified, pairing them with the best mentor provides a vehicle for knowledge sharing. Throughout the mentorship, the older employee can pass along the knowledge that they have acquired that has helped them be successful in their position. Even the CEOs transitional period can be eased with well placed succession planning.
No matter what industry you are in, it is important to be prepared for when senior employees leave their positions. As Baby Boomers retire in large numbers, planning for their succession is important for all types of businesses. Along with having a strategy in place, such as identifying potential leaders in your younger employees, programs like mentoring also have an important role in succession planning. To find out more about how to develop a workplace mentoring program for your succession planning, contact Together.