Question

Question:  

1. What is the difference between succession management and replacement planning and what is the first steps in the succession management process?
2. Discuss THREE reasons why succession management is so important in today’s workplace?
3. What can HR professionals do to manage the risks associated with succession management?

Answer 1

Difference between succession management and replacement planning

It is common for organizations to confuse succession planning with replacement planning. Replacement planning focuses on filling an immediate need for a specific critical role. There is less focus on employee talent development, as it is more of a reaction to necessity. Succession planning looks toward the future, developing strong benches of succession candidates to provide a proactive solution when an unexpected loss of talent occurs.

Here’s a look at some of the main differences between replacement planning and succession management:

1.Differences in Planning

Replacement Planning Fills an Immediate Need

The first area of discrepancy is planning. Replacement hiring is typically employed when there is an immediate need. For example, a leader decides to retire and a role becomes vacant. Then, either a subordinate fills the role or an external candidate is hired. This usually results in a long learning curve, as there would likely not be any transition period between the incumbent and their replacement.

Succession management Builds a Long-Term Pool of Talent

Succession planning, on the other hand, uses a long-term perspective to build a pool of talent before it is needed. That way, candidates are ready for a role if and when your leaders decide to step down. Candidates are developed in advance of a role becoming vacant. Long-term training, such as job-shadowing, becomes an available option to prepare candidates for their future responsibilities. This forward-thinking perspective also allows an organization to prepare not only to replace their leadership roles, but to fill the vacancies left in their middle management roles when these individuals move into higher positions.

2. Differences in Integration

Replacement Planning Focuses On The Now

Given its reactive nature, replacement hiring is focused on the now, and on the immediate need of filling a vacant role. Traditionally, the goal of replacement hiring is to find a candidate that is most similar to the leader who just left. Consequently, this leaves little room for growth and future-planning for the role.

Succession Planning Looks at Integrating Policies Throughout The Company

Succession planning, on the other hand, begins at the bottom and is integrated into policies throughout the company. Employees, even at lower levels of the organization, can be hired with their long-term potential in mind. It can be integrated into performance management by asking employees about their career aspirations and ambitions. Succession planning should align with long-term strategic planning to ensure succession candidates have opportunities to grow their skills and prepare for their future in your organization. Consider the many ways you can weave succession planning into your daily operations to maximize the benefits to your organization.

3. Differences in Decision Making

Replacement Planning Maintains The Status Quo

Even without a mature succession plan in place, many organizations have a back-up person in mind for their most senior roles. Generally, this decision was made by “default”, and may not reflect careful planning and thoughtful decision making. Replacement hiring runs the risk of maintaining the status quo in an organization, and not capitalizing on the benefits of a systematic process to choosing succession candidates.

Succession Planning Helps Determine Candidates Based on The Role

Good succession planning allows a company to choose potential candidates based on the requirements of the role, and their abilities to meet these requirements. A well-designed plan will use objective, evidence-based assessments to determine the right candidates for the right role, and will involve multiple stakeholders, such as the role incumbent, their peers, and members of your senior management team.

4. Differences in Outcome

Replacement Planning May Be Limiting for Current Employees’

One of the potential drawbacks of replacement hiring only is that it may be difficult for employees to predict if they are being considered for promotion, and when that promotion may be expected. As such, it may be difficult to retain talented individuals looking to advance. Replacement hiring also does not inherently plan for employees to develop their skills or enhance their abilities, making it difficult to grow talented employees in the first place. Candidates may not be ready to take on the position they are given in replacement hiring, resulting in potential costs and delays for the organization as the new leader learns the ropes of their role.

Succession Planning Looks at Expanding the Skills of Current Valued Employees

Succession planning is developmental in nature. Even when you cannot offer a high-potential employee a promotion at that moment, by providing them with opportunities to try their hand at new tasks, gain experience on a variety of projects, or build their skills, employees will remain engaged and more likely to stay with your organization. This also has the added benefit of creating a more developed workforce for you to choose from when a position does open up in the future. The best succession planning processes are mutually beneficial for employees and organizations alike.

See below for a quick table of the differences between replacement hiring and succession planning. We also provide you with a simple checklist to determine the degree to which you are engaging in succession planning. Still not sure if your organization has a mature succession plan? Check out our Succession Planning Checklist.

Not sure how your company’s Succession Plan stacks up? Check out our “Are You Engaging in Succession Planning” checklist to evaluate the degree to which your company is engaging in true Succession Planning.

first step in the succession management process

Identify Key Areas and Positions

Key areas and positions are those that are critical to the organization's operational activities and strategic objectives.

• Identify which positions, if left vacant, would make it very difficult to achieve current and future business goals
• Identify which positions, if left vacant, would be detrimental to the health, safety, or security of the Canadian public

THREE reasons why succession management is so important in today’s workplace are mentioned below

There’s an old saying that explains the inherent benefits of succession planning best: If you fail to plan, you plan to fail.

However, when your business is chugging along, and the economy and your financial future looks secure, it can be hard to stop long enough to consider what might happen to your company if you suddenly weren’t there.

The purpose of succession planning is to make sure a company always has the right leaders in place should a change happen quickly. By failing to create an orderly plan for succession, your company may not get a second chance if it doesn’t adapt immediately after a key player leaves the company or passes away.

After all, you can’t anticipate when a serious illness, accident, disaster or pandemic will strike, but you can prepare for what will need to be addressed should one happen.

Three reasons for importance of succession management are mentioned below:

1.Disaster-proofs your business

You buy insurance to protect the company from hurricanes, floods and fires. You install security systems to defend the company from theft. And you back up data to an off-site location to safeguard your business’s proprietary information.

Many business owners get so busy with the day-to-day operations of their company that they fail to make succession planning a priority. These leaders may think they’re too young to be hit with a serious illness. Or they forget that a key player (or several) could be lured away by another company that needs their skills and is willing to pay top dollar for them. Any of these scenarios can leave a business uniquely vulnerable.

Remember: Succession planning is another step in your senior leadership’s strategy to protect the company – whether you are physically there for its long-term success or not. Starting the conversation may be daunting, but the sooner the work on your succession plan begins, the quicker your business is shored up for the long haul.

Think of it as business continuity insurance that requires grooming employees.

2.Identifies your most-qualified future leaders

Formal succession planning requires your company to:

• Identify those positions most critical to the future success of the company. These might not all be C-suite positions.
• Identify internal candidates with the values, skills and desire to take on those critical jobs.
• Talk to potential candidates about their interests and career plans.

These crucial steps in succession planning lead to several benefits. First, a thorough look at your org chart helps your leadership better understand potential vulnerabilities, and can bring a sense of urgency to cross-train key employees in certain roles.

On the other hand, if there are truly no internal candidates who seem right for leadership positions, then you know to begin an external search early on.

Most importantly, some of the benefits of succession planning is that it lets ambitious, less-experienced internal candidates know their hard work and skills have been noticed and appreciated enough to be considered for advancement. This can be an incredible retention tool and motivator for junior managers and subject matter experts who want to advance their careers into management.

3.Creates structure for training and development

Once your company has identified that Sally, Bob and Bruce are interested in moving into senior positions, you can identify any competency gaps and begin grooming them for their eventual succession.

Some of the employee’s professional development may come in the form of coaching, mentoring, job shadowing or a gradual increase in more advanced responsibilities. Other positions may even require the candidate to go back to school to get additional education or professional certification.

By tapping potential successors early, you give employees time to acquire the skills and experience they’ll need to perform well in their senior roles. You also let employees know that you’re willing to invest in their growth as well as the company’s.

HR professionals can manage the risks associated with succession management in following ways:

Identify the risks:

• What are the organization’s current and future mission objectives?
• What critical roles are necessary to execute the mission (now and in the future)?
• What knowledge, skills and abilities (competencies) are required to fulfill current and future mission requirements?

Assess and analyze the risks:

• What are the current workforce demographics (key leaders and staff retirement eligibility; career ladders of key employees; eligibility of current staff to complete for key positions)?
• What is the proficiency of the current workforce in the knowledge, skills and competencies required?
• What is the potential and interest of the current workforce to assume mission-critical roles in the future?

Control, avoid, minimize or eliminate the risks:

• What development strategies can be put in place to close the gap between the knowledge, skills and experience of the current workforce and the leadership and technical competency requirements for the future?
• Are there programs or incentives you can take advantage of to entice current key staff to stay longer so you can focus on hiring and transferring knowledge to replacements?
• What knowledge must be maintained and what is the best way to transfer mission-critical knowledge within the organization?
• What are the most effective strategies to identify and bring on board new employees with the mission- critical skills needed to accomplish your future mission objectives?

The human resource risks associated with changing organization goals and objectives, vacancies left by retiring or departing employees, loss of key institutional or technical knowledge or lack of leadership continuity can be managed through strategic and deliberate succession planning.