The worries of succession planning have grown significantly in today’s organizations. Bosses are retiring while upcoming subordinates are not prepared enough to take up. In the context of Nepal Bank Limited too, the concerns on succession planning have drawn the attention as the large number of employees are approaching retirement in the few months to come. While the domain of human resources management is to cover management as well as development of people to meet the needs of right people to the right positions of the organization, succession problem indicates the failure in the development aspect. As a contemporary issue here in this article it is attempted to discuss the issue with some analysis to explore most practical solutions.
General Idea
The idea of succession planning in human resource management arises from the feature of continuity in organizations. Organizations are supposed to exist as going concerns while the people who work within the structure can change over time. So, one of the worries of management is keeping the activities and operations intact despite the turnover of the people in it. This requires a continuous plan for transition and development of the knowledge, skills and abilities in the upcoming generation of executives in the organization. This is the aspect which the concept of succession planning seeks to address.
Succession planning as an important component of human resource planning is the process of ensuring that another individual is ready to move into a position of higher responsibility. In words of Dessler and Varkkey (2009), it is the ongoing process of systematically identifying, assessing, and developing organizational leadership to enhance performance. Decenzo and Robbins (2005) view it as ensuring that another individual is ready to move up into a position of higher responsibility as and when it falls vacant in the near future due to retirement, promotions, transfers, resignation, or death of the incumbent.
Succession planning is an issue of continuous concern as an integral component in human resource planning of any organization. Its importance has increased with the advent of globalization, wider opportunities to people and thereby the more frequent turnovers and movements in the modern-day workforce. Today’s organizations are facing higher demands in a global market with the retirement of the Baby Boomers* and the widening talent gap. The home-grown and paper-based succession planning that companies relied on in the past is no longer meeting the needs of today’s workforce.
Companies need to upgrade and redefine their succession planning initiatives to ensure that their process will benefit both the individual and the overall strategy of the company. Despite the importance of the issue the irony is that succession planning does not often become a topic of interest in top management in most of the organizations. As Maton (2010) notes, succession planning is not made an issue till it is too late to address. Asking an executive director to plan for succession is tantamount to asking him/her to accelerate own departure.
Naturally, everybody wants to work, achieve and justify his/her importance in the organization rather than preparing for his/her own exit. Most efficient executives at their key positions build such a trust and comfort with the stakeholders that their departure can create a perception of destabilization of the organization and in case of non-profit organizations donors and support agencies may even pull back their projects. These matters make succession planning even a more complex problem.
Succession Strategies
Organizations adopt different kinds of strategies to manage succession depending on the nature of business, quality of their people and the sociopolitical context in which they work. This calls for a more strategic thinking beyond just a “lose one fill one” idea. This is about ensuring that there are qualified people in all positions not just today, but also for tomorrow, next year and over the years to follow. There are broadly the following four types of approaches used for succession planning:
- Development and Learning – These strategies refer to those of promoting the development of competencies of the existing people and broadening their horizons of judgments and experience. Such efforts help to capacitate them to take up higher positions as they fall vacant. Development exposures like assignment to “assistant-to” positions, including in cross functional taskforces and teams, participation in decision making, sending for executive courses and professional degrees etc. can be provided to the potential people in the organization.
- Feedback – Feedback strategies facilitate self-examination and assessment to promote continuous growth through ongoing feedback and exposure. Employees can self-control, correct and develop in key managerial skills and attitudes through the career years.
- Retention – Retention strategies enhance workforce motivation, commitment, and performance around the mission of the organization. Retention of capable people in the organization helps to fulfill the higher positions promptly and without losing efficiency.
- Recruitment – Recruitment strategies enhance the ability of the organization to attract and acquire the best-qualified leadership talent from the market.
Advantages of Good Succession Planning
With a well-thought-out succession planning process, an organization can realize a number of advantages. These advantages accrue to the organization as well as the individual incumbents. Some of them can be stated as:
- A well- geared up, concerned and potentially deep stream of capable people can develop.
- A continual supply of talented, broadly experienced, well-motivated people is ensured.
- There is better alignment of the future needs of the company with the availability of appropriate human resources within it.
- The organization can be recognized as an encouraging place to work, open to the avenues of growth and development. This can result in better attraction for better people.
Success Factors in Succession Planning
Organizations are permanent entities and entry and exit of employees is quite a common process. Succession planning is concerned with preparing successors to replace the existing positions with equal (if not more) talent and competence. Pitfalls in succession planning can invite inefficiencies and interruptions in the face of growing competitions and challenges. The following points can be considered the success factors of succession planning.
- Involvement of the senior management.
- Employees’ commitment to their own self-development.
- Proper link to the strategies of the organization.
- Efficient data management of the human resources.
Final Remarks
Succession planning is ultimately the vision and preparation for the future. Its importance grows with the increase in employee turnovers, workforce unpredictability and skills shortages that often arise with the globalization and expansion of the corporate world. The focus of succession planning efforts is upon reducing the negative effects of such unavoidable turnovers and maintaining the pool of talents that suit the context and abilities of the organization. Due care should be taken in various aspects while implementing the idea of succession plan. Choice of right strategies of succession planning and their well-judged implementation can bring in valuable developmental benefits to the employees as well as the organization in terms of continuity, efficiency and formation of a high-quality corporate culture.
References
Decenzo, A. & Robbins, S. (2005). Fundamentals of Human Resource Management (8th ed.). Singapore: John Willey & Sons Inc.
Dessler, G. and Varkkey, B. (2009). Human Resource Management (11th ed.) India: Dorling Kindersley.
Matan, R. (2010). Succession Planning for nonprofit organizations: A journey, Not a Destination.
(This article was originally published in Samabeshi Sandesh, Vol(3), 2070 Kartik)