4 proven benefits of reliable Succession Planning in 2023 (2024)

Reduce organizational risks by realizing how important succession planning is

Corporatesuccession planningis the process of identifying and internally developing talent with the specific objective of replacing key business leadership positions in the company.

What distinguishes high-performing organizations from underperforming ones is that successful entities understand the benefits of succession planning and thus engage in it on a continuous basis. In other words, their leadership perceivescorporate succession planningas an investment and not an expense.

The benefits of succession planning are numerous, but not always well recognized. Most corporate entities today, regardless of size and location, cannot do without a carefully crafted management succession plan. In order to minimize risks associated with the loss of valuable personnel, companies must engage in talent pool management by first realizing the benefits of succession planning.

Even though the concept ofcorporate succession planningis not new, it has received increased attention due to the numerous advantages ofsuccession management.These benefits are particularly important in a global business environment.

The 4 benefits of Succession Planning:

1. Availability of capable individuals for management positions is increased
2. The risk of losing experienced corporate leaders is minimized
3. Fewer financial resources will be spent on the external search and development of candidates
4. HR departments can establish formal procedures to support the process of selecting top and middle management

1st Benefit: Availability of capable individuals for management positions is increased

Effectivecorporate succession planningincreases the availability of capable individuals who are prepared to assume such roles as they become readily available.Leadership rolescan easily be filled as senior executives retire or if senior managementpositions are vacated due to the resignation of key officers.

Itthen becomes imperative to realize that effectivetalent managementis not simply about a position-driven replacement. Thesuccession planning processis a well-planned-out, long-term procedure building a number of so-called “feeder groups” of qualified candidates, able to fill vacancies as they emerge.

2nd Benefit: The risk of losing experienced corporate leaders is minimized

The most prominent potential benefit ofworkforce planningis associated with decreased risk of the loss of experienced corporate leaders. The existence of effectivecorporate succession planningdiminishes the need for an external search of qualified candidates for a particular position.

3rd Benefit: Fewer financial resources will be spent on the external search and development of candidates

Succession Planning also minimizes use of time and financial resources looking for new people capable to run senior management positions in the company. In situations of abrupt personnel changes, the benefits of succession planning become very apparent. There will be less time and reduced financial expenditure on recruitment andleadership developmentas qualified internal candidates have been already identified and trained.

4th Benefit: HR departments can establish formal procedures to support the process of selecting top and middle management

One of theadvantages of succession planningconcerns the ability of the HR department to engage and establish formal procedures to support the process of selecting top and middle management. Such actions minimize random or rushed selections, and re-establish the much-needed degree of commitment to corporatesuccession planningfrom everyone in the firm.

Even though organizations are often dissatisfied with the manner of its implementation, they cannot operate successfully without a well-developedsuccession plan. The key to a successfulleadershipmanagement approach is to continuously engage and implement corporatesuccession planningandtalent management.