Organizations ignore the need for a robust succession plan at their own peril. Having one will greatly impact the short and long term health of any organization. Further, it will help reduce many of the costs while increasing the overall competence of the workforce. A well-designed skills development program supported by an effective employee skills platform can make this process streamlined and efficient.
We have all heard of the phrase “Any organization is only as good as its people”. While that is true, in our experience “Nobody is irreplaceable” also holds true.
The bitter truth however is that “Good people will leave you.” Be it a better job, worsening health, or even death.
People Leave
In this information age, people change their jobs and careers multiple times. With access to so many avenues, it’s hard to keep anyone satisfied and motivated.
Plan A in succession planning should focus on working with people you already have. It is essential for an organization to work with employees to identify their skill gaps and fill them. Effective skills assessment tools available in modern employee skills platforms help identify these gaps quickly and accurately.
As the needs of any organization change and evolve, so does the requirement for skill development of its employees. Having a clear outline of what skills an employee has and what they need is paramount.
We may be able to reduce employee churn but we can never eliminate it. Hence Plan B is to have more than one person ready, at least skill-wise to take up the vacant role.
Cost of Change
The cost associated with hiring new talent is generally way more than developing talent in-house. The cost of lost time due to training and onboarding, financial cost, and the risk of disturbing group cohesion is just too great.
Consider the alternative: You have an employee already in your team with enough experience as well as skills to take up that vacant role. All you need is to change job roles, revise remuneration, and just like that the position is filled.
Minimal lost time, slightly higher remunerative cost, and virtually no increase in the risk of disarray in the group. Which one would you prefer? This is the advantage of having a good succession plan.
Also read: Succession planning using SWOT analysis
Cost of Retaining Talent
For the organization to ensure that the best talent stays with them, a good financial remuneration is not always going to solve their problem. Often, people get bored by the monotony of their day to day job.
To avoid turning the job into a chore, we have to challenge and inspire employees to learn new skills and grow. Once the employee is motivated to grow, we just have to bear the cost of retaining good talent. This cost is much lower than the cost of replacing talent.
Cost of Replacing Talent
The costs associated with replacing a talent from outside are huge. Further, if not done correctly, it can even bring a company down to its knees.
First, is the cost of time lost in finding a replacement. Next comes the cost of training and acclimatizing the individual in the organization.
Add to that, the cost of acquiring talent at short notice, which will surely increase the financial burden. Finally, is the cost associated with the risk of the new member not being able to gel with the colleagues.
Employee-Manager Relationship
A strong employee-manager relationship is a hallmark of a great organization. The free flow of ideas & needs helps bridge the gaps seen by either of the two. Managers need a good skills management solution to ensure that the succession planning envisioned by the organization is implemented. To get in-depth information please go through our article Best Practices in Skills Management Techniques.
A good skills management solution helps in saving time and cost while bringing in accountability. It saves time for the manager in identifying the skill gaps. It also helps in reducing the costs associated with training and development.
SkillsDB helps in identifying those gaps, and building competency to develop the best team for the job. Managers can find the skills that are lacking, and assign new skill development programs for the employee. It’s just that easy!
How Good Succession Planning Helps
A good succession plan ensures that you will always have talent available in-house to step up to any role at short notice. The wheel of learning keeps rotating and developing new talent. To learn more read our article on Succession Planning in 8 easy steps.
Companies don’t need to focus on recruiting talent anymore. Adding to that is the likelihood of maintaining group cohesion while minimizing costs.
A strong individual growth plan helps managers identify promising talent, look at their skill gaps, and pursue corrective action. Employees value organizations that invest in their personal growth.
When their goals align, employees rarely leave, build on their skills, work harder, better, and smarter. When a crisis will arise, as it certainly will one day, employees often step up and lead the way.
Further Reading
Skills & Competencies, Similar but Different
How to best Implement a Competency-Based Training Program
FAQ
Why do good employees leave organizations?
Good employees leave for better opportunities, career stagnation, health reasons, or simply because the modern job market offers abundant options. In the information age, people change jobs and careers multiple times, making some level of turnover inevitable regardless of organizational quality.
What is the true cost of replacing an employee?
Replacing an employee involves the cost of time lost finding a replacement, training and onboarding expenses, premium compensation for urgent hires, and the risk of the new hire not integrating with the team. These combined costs far exceed what it takes to develop and retain existing talent.
How does succession planning reduce hiring costs?
Succession planning develops internal talent to fill critical roles, eliminating the need for expensive external recruitment. When a position opens, a prepared employee can step in with minimal lost time, slightly higher compensation, and virtually no disruption to team dynamics.
What is Plan A in succession planning?
Plan A focuses on working with the people you already have by identifying their skill gaps and investing in their development. As organizational needs evolve, employees are continuously upskilled so they are prepared to take on expanded or elevated roles.
What is Plan B in succession planning?
Plan B ensures that more than one person is ready, at least skill-wise, to step into any critical role at short notice. This redundancy protects the organization from disruption when turnover inevitably occurs, regardless of how strong your retention efforts are.
How does employee boredom impact succession planning?
Monotony drives talented people to leave. To retain them, organizations must challenge and inspire employees to learn new skills and grow. A strong succession plan doubles as a retention strategy by giving people clear development paths that keep their work engaging.
Why is developing internal talent cheaper than external hiring?
Internal development avoids recruitment fees, reduces onboarding time, and preserves team cohesion. The cost of retaining and upskilling a current employee is consistently lower than the combined financial, temporal, and cultural costs of bringing in someone new from outside.
How does the employee-manager relationship affect succession planning?
A strong employee-manager relationship enables free flow of ideas about development needs and career aspirations. Managers need effective skills management tools to identify gaps, assign development programs, and ensure the succession strategy envisioned by leadership is actually implemented.
What tools support effective succession planning?
Skills intelligence platforms like SkillsDB help managers identify skill gaps, track employee development, and build competency across teams. These tools save time on gap identification and reduce costs associated with ad-hoc training and development efforts.
How does a growth plan help identify future leaders?
Individual growth plans give managers visibility into which employees are building the right skills for elevated roles. When employees see the organization investing in their development, they become more engaged and are more likely to step up during critical moments.
Can succession planning eliminate employee turnover entirely?
No. Some turnover is inevitable no matter how strong your culture or compensation. The goal of succession planning is not to eliminate turnover but to ensure the organization is always prepared with qualified internal candidates ready to fill critical roles when vacancies occur.