Introduction

Succession planning focuses on identifying and growing talent to fill leadership and business-critical positions in the future. In the face of skills shortages, succession planning has gained popularity, and is now carried out in both large and smaller organisations.

This factsheet looks at approaches to succession planning as well as the type of organisations who use it, and how it’s changed. It explores the relationship between succession planning and talent management programmes, investigating the balance needed when recruiting ‘insiders’ and ‘outsiders’, and the process of nurturing internal talent. It also looks at the ways of identifying successors, activities used in succession planning, and the role of people professionals in the process.

Succession planning is the process of identifying and developing potential future leaders and senior managers, as well as individuals, to fill business-critical roles. The aim is to be able to fill key roles effectively if a current post holder leaves the organisation. Succession planning programmes typically include practical, tailored work experience relevant for future roles.

Which posts are covered by succession planning?

A first step is to identify business-critical roles for which potential successors are needed. Succession planning schemes can focus on individual senior or key positions, or take a more generic approach by targeting a ‘pool’ of positions for which similar skills are needed. An example is non-leadership technical roles that could leave an organisation vulnerable if not filled quickly.

Individual positions

Succession planning usually covers the most senior jobs in the organisation, identifying individuals with the potential to step into these posts as short-term or longer-term successors. Proactive development through job moves or secondments around the business can provide a ready source of future leaders. A focus on the most senior posts means that only a small proportion of the workforce would be part of the process. This makes it more manageable. That said, many large organisations operate local models in divisions, sites or countries where the same or similar processes are applied to a wider population.

Roles, not jobs – the use of pools

While some jobs will always require specialists, there’s a growing focus on identifying groups of jobs and developing potential successors for a variety of roles. Jobs might be clustered by role, function or level so that generic skills can be developed. The aim is to develop pools of talented people, each one of whom is adaptable and capable of filling a variety of roles. Because succession planning is concerned with developing longer-term successors as well as short-term replacements, each pool will be considerably larger than the range of posts it covers.

Approaches to succession planning

All organisations need to be able to find people with the right skills to fill key positions.

Traditionally, large companies ran highly-structured, confidential and top-down succession schemes aimed at finding internal successors for key posts and planning their career paths accordingly. But with growing uncertainty, increasing speed of change and flatter structures, succession planning of this sort has declined.

A further problem with traditional succession planning was that it failed to take account of non-managerial roles – a brilliant scientist, for example, who might be crucial to the future of the organisation and who wanted to stay in a research role.

In a climate of enduring skills shortages and research suggesting a lack of confidence in the leadership potential within the existing workforce, interest in succession planning has revived. Yet, recent reports suggest that despite growing investment in leadership development, improvement in leader quality has stalled. Our research report Leadership – easier said than done looks at the barriers to leadership and good people management in practice. It also emphasises that developing future leaders has to be aligned with supportive organisational processes (reward and recognition, decision-making, cross-functional working) and organisational culture.

Modern succession planning looks quite different, with a broader vision, greater openness and diversity, and closer links to wider talent management practices. For example, progressive organisations who adopt an inclusive whole workforce approach to managing and developing talent will identify business critical roles at all levels within their organisation.

Talent management covers a wide range of activities designed to attract, recruit, identify, develop, engage, retain and deploy talented individuals – with a focus on attracting external talent as well as nurturing internal talent.

‘Insiders’ versus ‘outsiders’

All organisations need new recruits directly at senior levels to bring in new ideas and approaches. Many, however, seem to rely either too much on outsiders or too much on insiders, suggesting that it’s difficult to find the right balance.

It’s also sometimes argued that outsiders should not be brought in at board level but somewhere below, so that they become accustomed to the organisation’s culture before making the next step up. Others argue that bringing in outsiders at board level should be done where appropriate, and that a failing business in particular needs to recruit from outside, and to be seen to be doing so, to satisfy investors.

Nurturing internal talent

While many employers want to attract highly-talented individuals from outside the organisation for key or senior positions, there’s also the desire to promote widely from the home-grown talent pool. This is particularly so where there’s a high degree of organisation-specific knowledge in business-critical roles. Some commentators believe that leaders developed from within tend to be more successful than those brought in. They have relevant operational experience, understand cultural nuances, and have benefited from in-house leadership programmes. Succession planning can help retain talented individuals as they are aware of internal opportunities to progress their careers. It’s therefore central to the internal element of talent management programmes.

A wide range of activities may make up succession planning programmes. They may be formal and informal learning and development processes, together with a crucial focus on relevant management experience - see more in our management development factsheet.

Broadening experience by lateral moves

In the past people have tended to gain experience by upward moves, with accompanying increases in status and salary. Today that may not be possible because organisations are less hierarchical, with fewer management layers. A sideways move into a different job, perhaps without any additional compensation, may be an alternative way of gaining additional experience.

Some organisations are taking advantage of secondment opportunities to provide wider development opportunities. Inward and outward secondments both provide valuable development and benefit the individuals, as well as the organisations more broadly, through sharing knowledge and different perspectives. However, to be successful, secondments must be properly planned and secondees supported throughout.

Informal v formal approaches

Participants in succession planning programmes may be selected either by informal methods, such as conversations with managers, or by more formal techniques, such as the performance review process and assessing competencies.

Competencies

Many organisations have developed frameworks for technical and generic competencies, which relate to a broad range of desired skills and behaviours. The assessment process for generic frameworks (especially for management competencies) can be a useful starting point in evaluating an individual’s past performance for a senior role. So succession plans may need to be integrated with existing competency frameworks.

However, there shouldn’t be an over-reliance on competencies as they may be too limiting and mechanistic to assess skills such as leadership. They also relate to the past and present rather than the future. When using competencies to assess ‘potential’, organisations need to be very clear and consistent on what potential actually means. It should link to the organisation’s values and its strategic goals.

Openness, fairness and diversity

Employees need to understand the succession process. Transparency is key in the methods used to judge potential successors and the kinds of jobs considered suitable for each individual. The previously confidential nature of the succession planning process has declined and advertising of senior internal jobs is more common.

Fairness must go with openness and all candidates must be assessed objectively. Succession planning committees (under a variety of names) exist in many large organisations to review and challenge decisions and advise on improving the process.

All employees need to feel empowered to grow or they may opt out of the succession process. With the value of diversity and inclusion now widely recognised, employers are increasingly aware that diverse talents should be properly developed.

Modern succession planning also recognises that people need to make their own career decisions and to balance career and family responsibilities.

Identifying and developing talent should not be exclusive to full-time employees. It should recognise the growing needs of both employees and employers for flexibility in employment contracts. Flexible working options can be attractive for new talent, especially as employee expectations about their jobs, careers and work-life balance have changed in recent years. Adopting flexible working practices can improve the effectiveness of succession planning programmes by increasing the available talent pool.

Succession planning sits inside a very much wider set of resourcing and development processes in which people professionals play a key role. In particular, it’s a key component of workforce planning, a process to ensure the right number of people with the right skills are employed in the right place at the right time to deliver on the organisation’s objectives.

While succession planning needs to be owned by line managers, it should be actively championed by top managers. People professionals also have a critical role in supporting and facilitating the process. They must compile information on potential candidates by designing and managing assessment processes, and information support such as developing and maintaining relevant databases. People professionals have access to confidential information, offer career advice, and have expertise in assessing and advising on individual development needs.

Links with business planning

Those responsible for succession planning need to be highly knowledgeable about how the business is likely to evolve. It’s important that they avoid talent ‘tunnel vision’ where the focus is purely on current skills needs. They must have a good understanding of future strategy and the likely capabilities needed in business critical positions They should understand how change might affect the numbers involved in succession planning and the skills individuals must possess for the future. This requires a close relationship between top managers responsible for shaping the future of the business and the people profession.

Books and reports

CLUTTERBUCK, D. (2012) The talent wave: why succession planning fails and what to do about it. London: Kogan Page.

HIRSH, W. (2000) Succession planning demystified. Brighton: Institute for Employment Studies.

ROTHWELL, W.J. (2015) Effective succession planning: ensuring leadership continuity and building talent from within. 5th ed. New York: American Management Association.

TAYLOR. S. (2018) Resourcing and talent management. 7th ed. London: Chartered Institute of Personnel and Development.

Visit the CIPD and Kogan Page Bookshop to see all our priced publications currently in print.

Journal articles

CHURCH, A.H. (2014) Succession planning 2.0: building bench through better execution. Strategic HR Review. Vol 13, No 6. pp233-242.

De ALMEIDA, E. (2018) Seven things to learn about succession in organisations. Global Focus. Vol 12 No 2. pp64-67.

JACOBS, K. (2012) HR's role in executive succession planning. Human Resources. 19 November.

SECKER, A. (2020) The legal risks of succession planning. People Management (online). 2 January.

CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.

Members and People Management subscribers can see articles on the People Management website.

This factsheet was last updated by Ally Weeks.

Ally Weeks

Ally Weeks: HR Consultant

Ally is an HR practitioner with 20 years UK and international experience within small, medium and large blue chip businesses. A subject expert in talent management, succession planning, workforce planning and recruitment, Ally is currently an HR consultant and trainer for the CIPD and lead tutor for the Level 7 RTM (Resourcing and Talent Management) programme. She advises clients on integrating learning activity with wider commercial issues and the strategic direction of their organisation. Ally is highly adept at determining the most appropriate delivery methods, including online learning, and is experienced in 'hands on' training delivery. She also advises on monitoring the impact of learning interventions.

More recently she has focussed on writing content for CIPD’s online digital Certificate qualifications and Future of HR in partnership with Avado. She speaks at CIPD branch events and conferences on attracting talent, resourcing strategies and trends, strategic workforce planning and new learning technologies.

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