When business is going well, it can be easy for executive leaders to fall into complacency. A productive team, thriving company culture, and consistent company growth can falsely encourage leaders to relax in their position, but what happens when a key player is suddenly removed from the equation? This is when having no succession plan can have serious consequences for an organization.
According to a recent Deloitte study, 62% of millennials are willing to quit their job in the next two years and work in the gig economy. Furthermore, according to the U.S. Bureau of Labor Statistics, a record number of 4.53 million Americans quit their jobs in November 2021, which is a continuation of the trend labeled “the great resignation.”
These are serious indicators to business leaders that they need to fight in order to win the war on talent by ensuring they have:
- Strong succession plans in place
- Active retention strategies to keep the best talent
This article will outline a few ways that leaders can avoid the pitfalls of having no succession plan in place.
Why Do People Leave Good Jobs?
Putting the macro issue of “the great resignation” aside, there are many fundamental issues that can cause good employees to leave their job.
In the most basic sense, there are sometimes uncontrollable influences from their personal lives that might cause a drastic switch in their careers, such as childbirth, sickness, or moving to a new city. There’s not much that leaders can do to influence their employees’ personal lives, nor should they; rather, they should be aware of a natural cycle of employee churn that could happen at any moment and be prepared to adapt to these changes.
More importantly, business leaders should look at workplace issues that might cause an employee to leave to understand what they may be able to do to prevent them.
Many times, star employees might quit for the following reasons:
- They see no growth opportunities in their current role
- They feel their voice is not heard
- They are overworked
- They aren’t sufficiently recognized
- They don’t feel challenged
- No one checks in with them or checks in regularly enough
- They feel they are unfairly carrying the team
- There’s a history of leadership not following through with promises
- They’ll be better paid elsewhere
While there are many other issues that might cause an employee to quit, and even with very compelling retention strategies, the simple fact remains – people will leave their job eventually. No company holds a 100% employee retention rate.
For this reason, a smart succession plan should always be in place. Leaders with no succession plan are the ones most likely to suffer from organizational pain when someone leaves, particularly if a leader or key manager leaves on sudden notice.
What Is A Succession Plan?
A succession plan is a strategy to replace or pass on a role to a previously identified candidate if it were to become vacant. This is a process that is typically used with a focus on leadership roles and is used to identify and develop leadership qualities in potential leaders who can fill a position if the need should arise.
If Employee A leaves the company, then Employee B would be suitable to replace Employee A in their role. If something should prevent Employee B from successfully filling that role, then Employee C would be the next candidate for that position.
Succession plans usually focus on leadership roles because they are much more integral to the overall organizational health and forward momentum of a company.
What Makes A Good Succession Plan?
While understanding who may make a good replacement for a certain position should an employee leave, this is not a comprehensive succession plan. A strong succession plan is comprised of a few elements:
Preventative Measures & Retention Strategies
It is estimated that replacing a high-value employee can cost a company 200% of the employee’s annual salary. It’s far cheaper and far healthier for an organization to retain its best talent rather than replace them.
Leadership Training Programs
Succession plans usually include promotions of lower-level employees into high positions within the company. While this can be an exciting prospect for individuals, not everyone is fully equipped to step into a leadership role without previous training or experience.
While leaders may be able to identify potential candidates for the succession of a role, they may wrongly perceive someone’s interest or willingness to step up as a replacement. Employee engagement is necessary to prepare a replacement’s mindset for a more advanced leadership role.
While this is not always possible, depending on the nature of an employee’s departure, a structured transition can go a long way to improving the success of a succession plan. Individuals in leadership roles often hold organizational knowledge that is important to pass over to replacements.