Rob Coppola Senior Account Executive – Construction Insurance Practice Group View Bio

37% of all current firm owners plan to exit within the next 10 years.

27% of publicly traded U.S. corporations have been negatively affected by poor succession planning.

To assure continuity of a business’ operations, many companies use succession planning. This is the process by which talent from within the company is identified and developed to potentially fill key leadership positions. Succession planning increases the availability of experienced and capable employees able to assume key positions when they become available and limit any interruption to operations.

Need for Succession Planning

88% of current family business owners believe that same family or families will control their business in five years, but only 30% of them have formal succession plans. Recruiting and training for key positions can be difficult, time consuming and expensive, particularly when filling a vital position that was unexpectedly vacated. Being proactive, identifying and developing talent from within the company to fill key positions through succession planning can make the process more efficient.

Succession Planning Process

It can take up to five years to create an effective succession plan. While a company’s succession plan must be customized to fit its need, the following steps are typically part of the process:

  • Determine the roles and skills critical to the company’s growth Identify employees who could fill other roles in the event of a vacancy
  • Identify and understand what training is needed for a smooth transition Start to train backup employees on various roles to prepare them for a possible role shift
  • Ensure that all employees recognize and understand their career paths and the roles that they are being trained to fill
  • Identify employees in all areas of the business and work to ensure they are highly engaged and satisfied with their roles and the organization itself
  • Understand the time needed to cultivate the talent needed to fill key roles
  • Review, evaluate and adjust the succession plan as employees transition in and out of key roles.

59% of current business owners prefer internal succession, but only 50% of firms agree that their staff has the skills and training to meet their objectives. Losing a key employee can be a devastating interruption to business operations. Succession planning can help ensure the smooth transition of staff into the vacant position with minimal interruption to the business.

Need help starting your succession plan? Ask your Lawley account manager about or succession plan toolkit.

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This HR Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2016-2017, 2019 Zywave, Inc. All rights reserved.