Every employee you hire must demonstrate the potential to grow beyond their initial position, but it's important to track this potential to determine the employee's future career path. The direction of an organization and its ability to execute its strategy largely depend on having the right talent and leaders at the right time and in the right position. However, all too often it is clear that this is not always the case, as can be seen with some of the consequences of the Great Renunciation. In fact, while 86% of leaders believe that succession planning is important or an urgent priority, only 14% believe that they are doing well.
Data-based human resources starts with the implementation of relevant HR metrics. Download the FREE reference sheet with 51 human resources metrics. This metric is also called “flight risk”. What are the chances that a particular (high-potential) employee will leave in the next X months? However, there is no way to measure the risk of escape precisely because that would literally mean reading the future.
However, there are measures that provide indicators of when an employee with high potential might leave. It's a telltale sign that if the turnover of people with high potential is increasing, the organization's succession planning is failing. It's an indicator of efforts to retain high-potential employees. A succession plan isn't just about promoting the employees with the most potential, but everyone along the way.
Therefore, good movement, both sideways and upwards, is vital. The best way to demonstrate the effectiveness of succession planning is to compare your own historical data with new data to demonstrate improvement. However, you can still present strong arguments in favor of succession planning to management even without this data. According to Erik van Vulpen, if the answer is 0.7, it indicates frequent promotions, and if it is 0.2, it indicates that there may be a problem with the promotion process and little movement within the organization.
More than 90% of young employees, aged 18 to 34, say that working for a company with a clear succession plan will increase levels of commitment (Talexes, 201. Employee commitment, as well as job satisfaction, must be taken into account when planning succession). This will allow you to compensate for the risk of leakage. The percentage of critical external positions will tell you if your employer brand and outsourcing strategy are strong enough to support your succession plan. Leaders who have the potential to fill key positions when current staff leave and, as a result, minimize the effect that these inevitable changes have on business operations.
In addition to reducing overall turnover, succession planning helps you assess retention risk to be better prepared for employee departures and have a strategy to minimize the negative impact on your company. SIGMA Assessment Systems offers talent assessment, succession planning, executive training and consulting services to help organizations hire and develop strong performers. In short, succession planning is the process and strategy of identifying and developing talent to perform critical functions within the organization when needed.