BMSS HR Advisory
Putting the “Resource” in Human Resource Consulting

Written by Rebecca Tipton, SHRM-SCP

Nearly all companies face turnover at some point, which can hurt businesses with lag times required for recruitment and a new hire’s adjustment to the company and position. This can have an even greater effect if the position is a key position. The best strategy to minimize this risk is investing efforts into succession planning, which is not simply naming a successor but is a process that involves assessing your full internal talent pool and then creating development strategies to prepare internal team members to step into these positions with a minimal adjustment period. The benefit to companies who implement such planning includes reduced costs associated with key position turnover, informed promotion and recruitment decisions, increased retention of top talent, and improved return on investments in development. While it may seem like a daunting project, succession planning should absolutely be completed before it is actually needed and is quite achievable and approachable if you break the process down into separate steps.

Step 1: Identifying the Key Positions

The first step is to identify all of the key positions for your organization. Of course, there are obvious positions, such as the CEO or other members of the C-Suite. However, key positions also include your department or division leaders, such as your directors and managers, as well as individuals who may not manage others but do manage key projects or processes, such as someone who is tasked with social media engagement or perhaps someone who specializes in a specific service that your company offers.

Step 2: Identify Success Indicators

After you have finished identifying the key positions to your operations, the next step is to identify the different indicators for success in each position, such as skills or specific knowledge. For example, a good department leader should have proficient communication and motivation skills, and a good project manager should have the ability to manage their time and delegate tasks effectively. It also would be wise to ensure that a compliance manager knows the various laws and regulations that govern the industry.

Step 3: Assess the Workforce

The next step to developing your succession plan is to assess your internal talent pool. This involves first assessing employees on a grade of low, medium, and high for both their performance and potential. In terms of performance, a “low” rating would indicate that the employee is not meeting performance expectations, fails to meet objectives, and requires frequent supervision. A “medium” rating would indicate that the employee performs adequately, can meet most objectives, and still requires a moderate amount of supervision. However, a “high” rating would indicate that the employee regularly and consistently meets performance expectations and achieves objectives, all while requiring little to no supervision. In terms of potential, a “low” rating would indicate that the employee shows little initiative or motivation and does not appear to benefit from coaching or development efforts, a “medium” rating would indicate the employee shows an average amount of initiative and motivation while showing a moderate amount of improvement following coaching or development efforts, and a “high” rating indicates the employee consistently displays initiative and motivation and actively pursues opportunities for development. Depending on your workforce, this is likely the most time-consuming step of the process. However, it is important to give it the time and attention it needs and to use documented objective reasoning behind your ratings to avoid biases, such as favoritism or even unintended discrimination.

Step 4: Create the 9-Box Grid

The penultimate step is creating your 9-box grid. Start by lining up a 3×3 grid using “performance” and “potential” as your x- and y-axes and “low”, “medium”, and “high” as your labels on each side. From there, simply allocate your employees to their respective grid locations. For example, an employee who scored “high” in both performance and potential would be placed in the upper-right box whereas an employee who was rated as “low” in performance but “high” in potential would instead be placed in the upper-left box (assuming that “potential” is your y-axis, of course).

Step 5: Create a Plan for Employee Development

The final step to succession planning is developing strategies to help prepare your top talent for promotion based on the information you have gathered. For example, by using the list of success indicators developed in step 2, you can better focus your development time ensuring that there is a strong emphasis on those core competencies. You may also want to allocate your development budget to prioritize spending on those who have been rated as “high” in potential since they appear to be the most receptive and may provide the best return on development investments. Additionally, you may want to direct managers to work with your low performers and look for any resources that would help them perform better in those roles, all while keeping you updated on any improvements or possibly the need to take other actions. You can also use the results from your succession planning to help your recruiting efforts by identifying any shared qualifications that seem to produce top-performing talent, such as similar educational backgrounds or similar past work experience.

Succession planning is extremely beneficial to companies to maintain operations, focus development efforts, and retain top talent and institutional knowledge. As with most beneficial strategies, it does take time and effort to ensure it is effective and done correctly, and it will need maintenance over time to ensure that it remains effective. However, the benefits can greatly outweigh the efforts, and if you need support, BMSS HR Services is here to help.

If you’d like to discuss this in more detail or if you have any questions, please reach out to the BMSS HR Advisory Team at (833) CPA-BMSS or visit our website for more information.

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