The first Baby Boomers turned 65 in 2011. Since then, 10,000 people per day have reached that milestone and will continue to do so until 2030, when all Baby Boomers will have turned 65. Needless to say, this generation is retiring in droves. And they’re taking more than a briefcase and a box full of photos with them.
Retiring workers are leaving with a wealth of knowledge about the organization, including older systems, technology and business processes. Organizations need to prepare for a major knowledge transfer so employees aren’t left to figure things out for themselves, which could affect productivity and the customer experience. This applies to the departure of any key employee, whether they retire, move, accept a job with another company, have children or even die.
Whether your organization has employees approaching retirement age or mostly younger workers, succession planning can ensure a seamless transition of their work responsibilities and knowledge to others. Succession planning is the process of grooming employees to take on key roles when others leave. Through continuing education, training, shadowing and mentoring, you provide employees with the skills and expertise they need to step into higher-level positions.
You might say, “That’s a lot of resources dedicated to a ‘just in case someone leaves’ scenario.” However, there is no downside to investing in your employees. If key employees don’t leave, succession planning strengthens your entire talent roster, top to bottom. Your organization will be in a better position to achieve long-term growth, and there’s a good chance you will have identified high-potential employees who will ensure your company can support that growth. Also, grooming from within is far less expensive than recruiting talent from the outside.
Of course, succession planning benefits employees as well. It shows them how they can advance in their careers. It shows them you value and want to cultivate their skills and talents. Employee retention rates are higher when employees see opportunities for career advancement and employers take steps to create those opportunities.
Deloitte research shows 86 percent of business leaders believe succession planning is an urgent or important priority, but just 14 percent believe their organization does it well. In other words, the result doesn’t live up to the intent. Researchers found that most problems with succession planning could be traced back to a failure to focus on people. Organizations were so hung up on process that they minimized the impact succession planning had on the people involved. Successful companies are able to strike the right balance.
The key to effective succession planning is understanding and communicating with people. When assessing your workforce, focus on leadership, but don’t ignore the workers who keep your organization functioning on a daily basis. Who could step into these roles? How much training would be required? Who are your high-potential employees? Make sure you have options because you can’t always predict when employees will leave.
Talk to employees and find out about their career goals. If you assume you know an employee’s goals, you could end up moving them into a role they don’t want. Remember, succession planning represents an opportunity to retain your top talent, but only if you make decisions that consider their best interests.
Succession planning typically takes more than a year. Waiting until someone leaves to figure out how to replace them creates significant risk. Create or improve your succession planning process now to groom future leaders, make your organization more resilient to change and position your company for sustained success.