Succession Planning

How to keep on top of employee retention

Small businesses need to think big when it comes to retaining their best employees. Succession planning is a strategy that businesses use to identify top employees. While developing the employee’s skills, the business aims to keep them with the company during their career. Once jobs become available within the company, several qualified candidates will then compete for the position.

Why Bother with Succession Planning?

Succession planning has many benefits. If employees know they have a realistic chance of attaining a higher-paying position down the road, they’re likely to work harder.

While assessing candidates, the business also gets a clear idea of what each employee’s roles are within the company. In addition, new positions are filled by employees who already know the business and the company’s policies. All these factors lead to better employee retention.

The Succession Planning Process

Succession planning should be part of a company’s recruitment and selection process. High-level management and HR departments should agree to this process and take part in it. The succession planning process will vary, depending on the type of company. Here are some of the steps that might be involved:

  • Create an organizational strategy. This generally involves identifying the number of people that would be required for positions in the future.
  • Identify the skills, values and personality traits that employees should possess if they wish to obtain these positions.
  • Develop tools to assess potential candidates, such as performance reviews, tests and interviews.

Family Business Succession Planning

Family business succession planning is a process in which a business owner passes the business off to someone within the family, either in management, ownership, or both. Like any business planning process, family business succession planning will vary, depending on numerous factors. The current owner and the potential new owner should:

  • Evaluate whether or not this is the best option for the business.
  • Create an in-depth plan and have it reviewed by everyone involved in the planning process.
  • Closely monitor the plan as it unfolds. Be flexible and make adjustments as necessary.
  • Incorporate tax planning and estate distribution with the plan.

Succession Planning Software

There are various types of succession planning software available to help with your planning. The software can help organize all the information required to carry out succession planning. Often, the software will include searchable databases that make it easy to retrieve information in a timely manner. Some software can also produce statistical analysis, which can be beneficial for evaluation purposes.

If succession planning software doesn’t appeal to you, you could meet with professionals who provide succession planning services. Banks often provide this type of service, as do various other financial institutions. These professionals can help you plan as well as point out any issues they see that could impede the process in the future.