Roughly 10,000 Americans reach the standard retirement age every day. This older generation contains key business leaders, who often take important company knowledge and operations expertise with them upon departure. An impending top-level exodus leaves many companies vulnerable and in need of a strategy for steady success amidst periods of turnover.
The answer lies in effective succession planning.
While succession planning may seem like an obvious solution, it’s surprisingly rare — only 14 percent of directors and senior executives worldwide say they have a formal succession plan in place. Now is the time to make succession planning a priority at your company. Proactively building an official succession strategy for all levels of your organization has positive ripple effects, more deeply engaging employees and creating a sturdier company foundation.
Consider these tips to kick off fruitful succession planning development:
- Lead from the C-suite
Although those within the C-suite may be wholly invested in your business, this doesn’t make you immune to turnover. Personal and professional circumstances can interfere with leaders’ relationships to your company at any time.
In fact, CEO turnover is actually increasing. You can’t always predict when a C-suite member will leave his or her position, but you can be prepared to respond to the situation. Take the initiative to create replacement plans for executives, thinking through each scenario. If your CFO becomes CEO, who will fill the CFO spot? And who will support your new CFO? Do your senior leaders have the skills to rise to an executive level?
Address questions like these now, as the absence of procedures can have major consequences. The longer companies take to name a new CEO, for example, the poorer they perform relative to peers — underscoring the importance of proactive leadership succession planning that empowers you to act quickly.
- Don’t stop at the top
Succession plans that stop at the executive level are incomplete and leave you scrambling when important mid- to low-level employees leave.
Every staff member possesses vital knowledge or performs critical tasks that will need to be passed on after he or she departs. Succession planning for each important role ensures your company can continue operations without losing ground if any major or longstanding employees quit — apply the same principles to every level of your organization as you do to the C-suite.
- Plant the seeds for future leaders
A big part of succession planning is cultivating and monitoring a steady pipeline of talent throughout your organization. You can achieve this goal through small steps that you may already have implemented. For example, regular reviews (at least once annually) of your talent keep an eye on and engage employees who are strong candidates for promotion.
Schedule quarterly check-ins for more senior-level staff members so you can update them on succession plans and new roles that may open. As a bonus, more frequent meetings allow you to quickly discover and address pain points throughout your organization, likely increasing employee retention.
- Implement knowledge-sharing programs
Making it easier for employees to learn from one another — particularly senior and younger workers — both prepares your organization for departures and grows your workforce’s skill set. Knowledge-sharing programs help employees feel more connected to your business and capitalize on senior employees’ expertise, ensuring these staffers don’t take valuable insights with them when they leave.
Mutual mentorship programs also present great learning and development opportunities for older workers. Younger employees have the chance to demonstrate new technologies or offer fresh perspectives on company processes. Knowledge-sharing initiatives supplement succession plans and make it easier for employees to adapt during staff turnover.
- Offer lateral growth opportunities
Your company employs talented people at every level. But for some workers — especially millennials — a promotion may not be in the immediate future. Still, every employee is an important part of your business and will likely ascend to leadership roles down the line, so you need to keep them engaged.
Assign staffers with fewer vertical growth opportunities to special projects, or offer them opportunities for meaningful professional development. Job-specific training or unique leadership roles allow employees to broaden skills outside of a predefined career path, helping them feel valuable amidst strict hierarchies that can drive out talent.
- Look outside your company
With job hopping now so frequent, it’s increasingly rare for employees to follow a rigid company trajectory. Often, workers will find a better job elsewhere before reaching the next rung at your company, making it difficult to create reliable succession plans. This trend is one reason to consider an outside hire.
Additionally, bringing in new employees may be necessary to add fresh expertise or strengthen talent in a certain area. If you’re hesitant to look externally for high-level positions, consider that some cases show outside hires in the C-suite increase productivity. Even in the most senior positions, external recruitment can serve as a useful succession plan component if properly implemented.
It’s hard to predict employee turnover, if not impossible. From entry-level workers to your company’s CEO, people may leave your company for a variety of reasons.
In the worst cases, losing employees takes away years of knowledge and expertise from your business. But with effective succession planning, departures won’t hurt company operations, allowing you to easily fill positions and continue moving forward.