Effective Succession Planning In 7 Key Steps

Succession planning

Whenever you have an employee in a key position at your company leave, things change. There may be drastic consequences in the form of protracted, costly recruiting, in addition to the institutional knowledge and experience that goes out the door along with the team members.

In this kind of situation, the one thing you can do is to make sure that the loss of key employees does not catch you off guard. We call it ‘anticipatory workforce planning,’ often referred to specifically as succession planning.

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What Is Succession Planning?

Succession planning is a process for replacing leaders and key employees. This process is important for leaders and managers especially, as succession planning can ensure their roles are filled quickly within the organization.

What Is The Process of Succession Planning?

the process of succession planning explained

Let’s consider the image above as a quick run-through of how the succession planning process works. Later on in this article, we break each of these seven steps down so that you can master succession planning with ease!

Succession Planning: Frequently Asked Questions

Who Should Be In Charge of Succession Planning?

For the health of the organization, HR should be primarily concerned with succession planning. This is because they are the department most in tune with the growing needs of the organization and the potential talent on hand. When they have a strategic seat at the table, along with leadership, they can achieve this process quite easily.

Why Does Succession Planning Matter?

As an HR policy tool, it ensures that key positions within a company do not remain vacant and that they can be filled quickly, and successfully, in the event of a sudden departure. It’s essentially a way for companies to remain agile when it comes to their key competitive advantage: talent.

Is Succession Planning Becoming More Popular?

The growing demand for succession planning strategies will grow as an entire generational workforce (primarily baby boomers) will retire. As a result, companies need to find qualified employees who can pick up these leadership roles and run with them. In sum, succession planning allows companies to preserve key qualifications while avoiding protracted and costly recruiting processes.

What’s A Helpful Succession Planning Framework?

If you want to start a succession planning strategy, you need to have a plan in place. So, how do you do it? Here are some of the general steps you’ll need to start taking:

  • Identify key positions within your company.
  • Assess the risk of those positions becoming vacant (account fluctuation rates, retirement dates, etc.)
  • Source talent that is currently within your company
  • Manage that talent by developing existing personnel
  • Concurrently, build up a strong talent pool (click here for more on talent pools)

Keep in mind, though, that succession planning is not only relevant for large or medium-sized companies. Even small, family-run businesses should have a plan in place when it comes to successful business succession.

What Is The First Step In Succession Planning?

As we mentioned in the list above, the first step in succession planning is to identify key positions. It’s also potentially the most important, as you need a very strong handle on where the highest amounts of ‘institutional knowledge’ exist within your organization. Once you know that, you can prepare for their departure.

Is Your Recruiting Process Moving Fast Enough?

Replacing key positions requires a recruiting process that is agile, flexible, and ready to go at a moment’s notice. Personio can help with an applicant tracking system (ATS) that truly makes a difference.

Building A Succession Planning Strategy in 7 Easy Steps

Now that you know a bit more about succession planning as an HR strategy, and why it matters, how can you do it? Here are seven well-coordinated steps to ensure key positions are filled successfully…

1) Start Identifying Key Positions

This is going to require some internal reflection. Begin the succession planning process by identifying qualifications that are essential to your company’s success. This could include years of experience, qualifications or licenses, or other ‘soft skills’ that have an impact on company success (like customer relations abilities, for example).

Then, you need to write them down. So, take these qualifications essential to your company’s success and document them in what we might call ‘initial job profiles.’ Now you have an idea of what you need, relatively speaking, but we need to dig a bit deeper to get to the core of the issue…

2) Identify Needs

If we start by knowing the key qualifications that influence success, now we need to plan for where we might lose those skills. So, you need to establish which key positions might become vacant in the near future. Ask yourself:

  • Which employees are about to retire?
  • Are any employees currently pregnant?
  • What is your overall fluctuation rate?

You can also take a top-down approach in this step, and plan for your entire company’s succession plan starting from your CEO to executive leadership and further down the organizational chart. That said, if you are in a pinch and want to get started immediately, you should start filling gaps that may reveal themselves sooner than later.

In this step, it is also important to include the financial resources you may need for the recruiting process. It is important to note how the recruiting process transfers into time (and money) spent. It’s also at this point that proper recruitment software can help maintain efficiency without draining resources.

3) Develop Your Job Profiles

A key part of the succession planning framework is having fleshed-out job profiles in place. What constitutes an effective job profile, though, and where should you focus your efforts? Here’s a quick rundown:

  • The tasks a key position currently performs.
  • Qualifications a person in that position has to their name.
  • Potential evolutions of this role as times change.
  • Any additional skills this position may want to have in the future.

Think of this as your template for finding the ideal person to fill this role in the future. Essentially, it is taking the current person who occupies this role and turning their skills into something of a blank canvas. This transforms skills thought to be irreplaceable into an actionable plan for recruiting.

4) Start The Recruiting Process

Concrete examples of succession planning typically begin during the recruiting process. This is where the process takes shape, and it helps if you approach it from several key angles, including:

  • Building up your talent pool.
  • Implementing an employee referral program.
  • Providing targeted upskilling programs for current employees.

If you are taking a proactive approach, maybe you have all the time in the world for succession planning. But, if you’re low on time, you may want to set deadlines for finding a suitable candidate or completing the handover period.

5) Appoint A ‘Successor’

Whether internally or externally, this is the part of succession planning that signals the end. While a lot of the heavy lifting may have been done during the job profile stage, now you have someone in mind who could be able to take on this role.

Apart from interviews, though, finding the right candidate during the succession planning process should rely on more nuanced measures. You should work with assessment centers, case studies, or work trials, to determine the best fit.

That said, a technical fit is not always a cultural fit. For succession planning to be successful, it often comes down to how someone fits within a company’s distinct culture.

How do you begin to evaluate this? First, you likely need to have a hold on your own culture and what it means to work with your company, but you may want to consider the following to evaluate a candidate’s fit:

  • An interview with potential peers to see if they mesh well.
  • A case study directly related to their soft skills (perhaps giving or receiving feedback).
  • Scheduling a more casual interview setting (like lunch) for a candidate to show more of their personality.

This is the part of succession planning that you need to get right. After all, you now have someone that you have deemed the right fit for the role. So, they need to be the right fit from multiple angles, and not based on whether they can do the job or not.

6) Hand Over The Job

When done right, succession planning also loops in the person leaving the role. This is most felt during the handover process, where a new employee gradually learns their new tasks, both from their future coworkers and team leads, as well as from their predecessor (who will share existing knowledge or institution knowledge they only have).

Keep in mind, though, that the handover period shouldn’t be too short. Especially if a key position is being filled, it is important to bake in more time (think in terms of months and not weeks) for an employee to manage complex tasks that used to go smoothly. They will get there, but they require patience.

However, if a handover period is too long, there is a risk that the successor won’t be able to come into the role in their own right. They will be too influenced by how the role used to perform, and you may lose out on the future-oriented skills that you feel this role needs to thrive.

The best answer is somewhere in the middle. While team leads should have a long-term perspective, there should be an active, fast-paced, and collaborative approach to handing over knowledge. Ideally, this would also be done through confluence pages or a company wiki, where institutional knowledge is public and not private.

7) Document The Transition

Now that the handover of the job has been completed, what comes next? Documenting the transition is a crucial step, in order to note how the position was filled and to inform future processes. Keep in mind the following:

  • The demands of this position in particular.
  • Processes that went smoothly during the handover.
  • Issues during the handover that caused confusion.
  • Gaps that still potentially exist.

In the future, this will help optimize your recruiting process, as well as succession planning strategies for similar roles that may become available.

How Do You Identify Important Positions For Succession Planning?


Here’s how to start: Ask yourself a few specific questions to find out which positions are essential to your company. The following guide, based on Dr. Gunnar Kunz’ approach to talent development, provides a succession planning framework for assessing the relevance of individual positions:

  • Are the decisions made by this person of significance to the company? Do they affect other business units?
  • Does the employee have a leadership role and a (large) number of team members reporting to them?
  • Does the position require specialist knowledge?
  • Are the tasks performed by the employee particularly complex?
  • Is there a high risk to the company if the employee were to go to work for a competitor?
  • Would the process of filling the position be protracted and costly?
  • Is it going to take a long time to train a successor?

Even if some of the above questions do not apply, a position can remain key within a company. While the above can certainly add clarity for more executive roles, it can also bring up more questions as to whether a role applies.

So, it is key to think about it like this. Seniority is not the only qualifier for succession planning in a company, you also need to keep in mind skillsets, relationships, how long someone has been at a company, and if they were at the company during a key stage of growth or during challenging times.

For example, an IT specialist may hold a key position within your company if they are competent in a programming language that is important for your business. While they may not even be senior, they may have invaluable skills that would make their departure a key loss for the company.

Should Key Positions Be Filled Internally or Externally?

For succession planning to be successful, you need to think about whether your company currently has the talent to replace a key position. This means that, even if it cheaper to fill a position internally, it does not guarantee that a current employee is up to the task.

In fact, an employee may not be qualified for the role, but they also may not be interested. Here is what you should consider for either internal or external fillings:

Advantages of filling positions internally:

  • None or a short recruiting process, as the employee’s skills and qualifications are already known.
  • The employee can be provided with specific training to develop key skills before they take on the new role.
  • Short induction phase: The employee is already familiar with the company and its processes.
  • Investing in staff development fosters employee loyalty.
  • Developing internal staff has a positive effect on the motivation and loyalty of other team members.

Advantages of filling positions externally:

  • Newcomers bring in fresh ideas, drive innovation, and help counteract blindness to the company’s failings.
  • External candidates provide access to new networks.
  • Newcomers are objective and disinterested in previous conflicts within the company.
  • External candidates may enjoy greater acceptance, above all in leadership positions.
  • New employees contribute additional skills and knowledge.

Are You Thinking About Succession Planning?

Succession planning can be a strategic initiative for HR to identify key candidates and grow your business. Book your own demo today so our team can help address your challenges and how Personio can help.

Two Serious Mistakes in Business Succession Planning

Effective succession planning is crucial when it comes to one key filling: your CEO. In most cases, CEOs don’t retire every day. However, one in every ten successions is unexpected.

For this kind of succession planning to work, you will need to have a set of specific steps prepared. More importantly, please make sure you don’t fall into either of the following two common traps:

1) Underestimating The Time You Will Need

Start the succession planning process early. Ideally, you would do so five years ahead of time. This would then entail developing steps and processes to find the ideal succession candidate to manage the transition effectively.

After all, this is about far more than simply finding the right fit. You need to find the right candidate, develop them, and prepare them for the role, and this can take a great deal of time and effort.

2) Not Having A Contingency Plan

If a key person leaves a company unexpectedly at short notice, their position may remain vacant for some time. That is if you have not actively planned for their succession well ahead of time.

But, certain positions need to be filled quickly to make sure the company stays on track. In exceptional situations, you shouldn’t wait until you’ve found the right candidate – work with interim management instead.

In these cases, HR consultants will usually provide an experienced manager for a temporary deployment at short notice until a permanent successor has been found.

What Metrics Determine Succession Planning Success?

Now that you have a succession plan in place, how do you determine if it is working or not? These key metrics and KPIs can give you a relatively accurate read of whether or not your plan is working correctly:

  • Turnover rates in your organization – if people are leaving more because they are in the wrong position.
  • Retention rates – not only if people are leaving, but if your key, essential talent is sticking around.
  • Cost-per-hire – if your hiring costs for key positions is going down or up (this can be influenced by your talent pool).
  • Time-per-hire – effective succession planning should cut down your hiring time.
  • Planned positions being filled (%) – whether your succession planning candidates were deemed ready for the role.

Succession Planning With HR Software

There are many reasons why HR software can act as an invaluable tool during the succession planning process. Think of it as a combined, holistic effort: You have a consistent read on statistics, a formalized and streamlined performance process, and the recruiting infrastructure to match.

All of these things come together in an all-in-one solution. It offers you the visibility you need, the forethought to be able to plan ahead, and the talent in front of you to make it a success.

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