The Succession Planning Process and Why It Matters

Paychex

Uncertainty about the future of your business can be stressful.

A formal employee succession planning process can help companies identify key performers and future leaders, and work with them early to build long-term trust and loyalty. Having a succession plan in place can help your employees at all levels feel that they’re growing and developing their careers in a way that contributes to the company’s success.

Business succession planning, separately, is the process of designing and implementing a plan for the continued operation of a business if members of the leadership team retire, get promoted, or move into new roles outside of the organization. Succession planning ensures that the business can continue to thrive without significant interruptions, even as key leaders move out of their current positions.

WHO IS RESPONSIBLE FOR SUCCESSION PLANNING?

This process can be overseen by a variety of different people within a company, depending on the size and structure of the organization. In some cases, succession planning may be the responsibility of the human resources department, or it may be overseen by a specific manager or executive.

Types Of Succession Planning

The structure of a succession plan may vary depending on the size of the company, the expected timeline when a successor will take over and the current structure of the business. It is important to consider both the current and future needs of your business and to build your plan accordingly.

Pros And Cons Of Planning

One of the most important decisions made within a business is who will take over a key leadership role when a current employee leaves. This can have a major impact on the long-term viability of the business. However, succession management also requires time, effort, and money to set up and organize properly.

Continued on page 36

Continued from page 34

Benefits Of Succession Planning

With careful preparation, a succession leadership plan can help ensure that the business remains successful and profitable for years to come. The benefits include:

„ Peace of mind

„ Business continuation and growth opportunities

„ Minimal disruption during changeover

Change is hard no matter when it happens, but you can minimize the disruption associated with a change in leadership by planning ahead.

Challenges Of Succession Planning

Although succession planning is a vital part of business operations, it can also be a complex and challenging undertaking. Being prepared can help ensure a successful result when facing challenges involved with transitions such as:

„ Identifying potential leaders

„ Adjusting policies and procedures

„ Stakeholder communications

It is important to communicate openly with employees and customers throughout the process to keep them informed and reassured. Any communication should be carefully worded and thought-out to ensure that everyone involved feels positive about the new direction of the organization.

Succession Planning Process And Steps

A viable employee succession plan requires proactive effort and the implementation of several key succession planning steps. Businesses should be prepared to:

„ Develop the succession goals

„ Identify critical roles and positions

„ Create success profiles

„ Set up professional development plans

„ Incorporate criteria needed for advancement

„ Institute a mentorship program to help employees grow

„ Review succession plans as the business changes

Succession Planning Considerations And Best Practices

In general, all companies (even those with relatively small business volume) should seek out talent to promote and develop. When drafting these policies, keep the following best practices in mind:

„ Encourage a forward-thinking mindset

„ Increase companywide efforts to identify talent

„ Identify specific criteria needed for promotion

„ Foster development through

To learn even more about succession planning and to read the full piece from Paychex, visit go.paychex.com/ ficpa may23

The Importance Of Succession Planning

Without formal succession plans in place, job uncertainty may affect employees’ career decisions. By outlining the company’s future plans and what’s expected of leaders within the organization, the business can help employees focus on developing the necessary skills to achieve their personal career goals. If your company needs assistance drawing up a formalized plan, an experienced HR professional can provide additional guidance and support.

Strategic Partner Content With

Strategic Partners

Our Partners provide our members with resources that help elevate their companies, firms and client services. Financial support from our strategic partners aids in the advancement of the mission of the FICPA.