INDUSTRY INSIGHTS | FALL 2010 EFFECT
Succession Planning Impacts Recruitment
by Linda RossoIf you are the CEO of an organization, where would your company be if you were the victim of a sudden tragedy? It’s difficult to think about, but just as parents need to provide for their families in such a circumstance, CEOs need to prepare for the ongoing viability of their companies.
This anecdote reveals a broad concern about the viability of leadership when companies are under stress. The Chartered Institute of Personnel and Development (CIPD) reports that “In a climate of growing skills shortages and lack of confidence in the leadership potential of the existing workforce, interest in succession planning has revived. For example, a CIPD/DDI survey Global Leadership Forecast 2008–2009 shows that only 44 percent of leaders rate other leaders in their organizations as good or excellent.”
Succession planning 101
Succession planning identifies and develops budding talent for essential organizational positions in the future. While the planning process can also be applied to other departments within a company (as a part of workforce planning), it is more commonly used to address top leadership transitions.
Succession planning involves developing both a short- and long-term strategy to prepare for future leadership changes and protect from unexpected surprises. The process may include identifying internal candidates, preparing and implementing development plans, and/or hiring people from outside your organization to assume leadership roles. Whatever form your succession planning takes, it is important to document your plan and review it as your business evolves and the business environment changes. Periodic updates to the plan will help ensure you are prepared for any leadership crisis.
Who is responsible for succession planning? The answer depends on the type of organization.
- In family-owned businesses, the owner is ultimately responsible for determining how and when ownership and/or control of the company will be transferred.
- For publicly owned companies, the board of directors is responsible for assuring a succession plan is in place and likely will form a succession committee.
- In a privately owned company, the CEO should take the lead. Human resources should play a crucial role in supporting the owners, board, and CEO, and facilitating and managing the succession planning process.
Succession planning and recruiting
A succession plan benefits an organization in several ways. Having a clearly documented plan helps you avoid chaotic transitions that disrupt performance. A succession plan also fosters a climate of stability both inside and outside your organization, so that recruiting excellent talent is possible even under the most adverse conditions. And lastly, as I can attest as a recruiter, it is much easier to attract and retain top talent in an organization that has a solid plan for the future.