"Planning is bringing the future into the present so that you can do something about it now"
- Alan Lakein
Since 2010, Statistics Canada has been reporting that "people old enough to leave the labour market outnumber those old enough to join it", resulting in a significant shortage of workers. Daunting? Yes. Manageable? Absolutely! Well developed succession and replacement plans not only solidify the strategic presence of Human Resources in the boardroom, but also improve morale and assist in the retention of employees and vital organizational knowledge. With these plans in place, organizations can save time and money they would otherwise lose from being unprepared during turnover, whether planned or not.
Although they share the same goal of meeting human
capital demands, slight differences do exist between succession and replacement plans. First, a replacement plan, also referred to as a replacement chart, is generally considered part of a succession plan. Second, a replacement plan outlines an organization's strategy for filling key managerial positions, both internally and externally. Succession planning, on the other hand, is the process of recognizing and developing high performing employees, internally, who have demonstrated the ability and interest in pursuing senior leadership roles. Either way, the objective is to have successors prepared and willing to step into a role as it becomes vacant.
Considering all the decisions and plans made for other capital transactions, it seems logical that human capital decisions also require attentive plans. We encourage you to read our Action Plan below to help you get started on planning for your organization’s success today!
As with other business plans, the organization's mission, values and goals must be appropriately aligned; otherwise, the time and energy spent on planning will prove ineffective and potentially incur negative consequences. A Succession Management Policy can help you achieve this. Since one internal promotion or replacement can produce multiple positional shifts, be sure to include every position in your organizational chart so as to accurately predict and plan for the change. This process will also assist you in recognizing roles which are considered vital for sustainability and growth. With the completion of your organizational chart, the development of a replacement plan can begin. But first, let’s identify the talent.
Identifying the Talent
As job duties and tasks are ever-evolving, taking inventory of the skills and competencies of your workforce is essential to identifying any gaps and developing an action plan to overcome them. HRdownloads’ Skills Inventory and Analysis Form can help you do just that! The form helps ascertain employees' skills and competencies and their particular strengths. It also offers a "strategy" section where an action plan containing SMART goals can be added. By implementing a Succession Planning Survey it further demonstrates the organization’s commitment to recognizing internal talent and provides opportunities for career development and growth. The next step is to create a replacement plan.
Creating the Replacement Plan
A replacement plan identifies essential executive and managerial roles, necessary competencies, and potential replacements. The first step is to recognize the key roles and the required competencies to be successful in them. If you are uncertain about how to gather this information, or simply don’t have the time, we encourage you to download our Values and Competencies Dictionary as it provides a list of core competencies, detailed examples of each and differentiates between the levels which vary depending on the position. The next step includes the identification of potential replacements. In cases where internal replacements are limited or not feasible, recruitment strategies will need to be developed to attract external candidates for the roles.
There has been a lot of buzz surrounding mentorship programs, both in and out of the workplace, and rightly so! These programs have proven successful for many organizations in retaining employees, increasing productivity and quality levels, reducing frustration and preserving valuable trade secrets and practices. With the identification of key positions requiring successors, the mentorship program should be communicated to the workforce so as to increase participation and provide additional details. An important factor in mentorship relationships is ensuring that a good “fit” between the Mentee and Mentor exists. This can be achieved through the careful analysis of each individual’s goals, competencies and potential for growth. To assist in launching a Mentorship Program, please refer to our Mentorship Initiative Planning Template as it provides helpful information about important tasks, guidelines and timeframes which will help keep the program on track.
Plan in Place? Time to Manage It!
Once the competencies of both the job and talent have been identified, the succession and replacement plans have been developed and the training methods have been put in place, it's time for succession management to begin. Let's be honest, with all of the time, energy, and ultimately money invested in planning for an organization's success, succession and replacement plans are not intended to nor should they be created and merely placed on a top shelf to collect dust! These are living plans requiring regular amendments and constant review to remain current. Whether an employee is leaving or joining the organization, being promoted or transferred to another department or retiring, succession and replacement plans should be referenced and updated with every positional change. After all, plans are great in theory, but when in practice they must be well-managed to be effective!
When developed strategically, and with the necessary supports in place, succession and replacement plans can result in higher retention rates and smoother transitions and can reduce the frustration and stress that is often associated with positional changes. Since we have now entered a period in which the population is shifting and labour shortages are imminent or occurring, the companies that plan for and navigate these changes successfully will come out on top.