In an ideal world, we enter a company after school and grow through promotions and seniority as far as we can before retiring. But that was then, this is now.
The old model of the one-stop company and the straight advance are long gone, and people often change companies or even careers multiple times, sometimes on a yearly basis. As we are less prepared for any specific craft, or pinned down on a specific profession in our school days, we instead have the option to “taste” various professions and companies to satisfy our need for comparison. When we finally settle down, we still always keep an eye on the horizon, or entertain the possibilities of authorship or public speaking as ways to express ourselves professionally.
Additionally, companies find that sometimes people are lured away with the promises of better pay, better career opportunities or better secondary benefits. If you are not prepared for this, it can be a mad scramble to find someone who has the required skills to fill that void, or hire external candidates.
Keeping track of the capabilities of your people and absence management allows you to answer the following crucial questions in your organization:
- Who has what capabilities and experience?
- Who could fulfill what roles (other than their own) on a short-term basis?
- Who could be promoted to what other role, if required?
- Who will be having planned absences or retirement?
- How does promoting or demoting one person affect others?
This is the essence of Succession Planning. In its core, it is the knowledge of how you can move people around to fill up (long-term) holes in your organization’s capacity in the most efficient manner.
Reasons for Moving People
There are many potential reasons for moving people from one role to another. Someone might leave the company, and their position becomes available for a new person. Someone might retire, or take a sabbatical. One person might seek to gain a management position in another department, leaving their own position behind.
But don’t discount people that try to follow an education, change careers or go on parental leave. While their absence might not be permanent or long-term, they too will need replacement for this time.
When you promote someone to a position, their own role is left behind, which now also needs to be filled. This will potentially cause a chain of upwards mobility, eventually necessitating either a new hire at some point when no one has the potential to be promoted, or an entry position becoming available for a new hire to join the company.
Hiring To Fill A Vacancy
Hiring external candidates to fill a vacancy is a great way of bringing in new talent, a fresh viewpoint and enthusiasm. A new hire may need to learn the company structure and become engaged with its style and culture, but they will be very eager to learn in most cases.
Recruitment also allows you to be very specific on what kind of attitude, skill set and experience you are looking for. Whether you recruit yourself, your HR department do so, or you are using an external recruitment agency, you will have the benefit of exact knowledge on what you need and what would be a plus in your new hire.
The downsides of recruitment are that it usually more expensive, as your new hire will ask for a market-conform salary and may know that their skills are in high demand. You will be required to pay a fee for the recruitment agencies you’ve used, and you may need to run background checks. Additionally, a new hire will require a proper onboarding, if you want them to hit the ground running.
It also takes extra time, as you need to work through a recruitment process, which can include various approvals at management levels.
Internal Promotion
When you promote internally, the process can be much more quick and simple. If you have people in your organisation capable and ready for a promotion, it would be as simple as changing their title and adjusting their compensation to it. If they are from the same team, they will likely be aware of the demands of their new position, and the time normally reserved for onboarding a new colleague can be fully used to ease them into it. If your leaving team member is still around, they can be of great help in working in their replacement.
But this assumes that they are capable and ready, and sometimes you will find no one in the team – or even the department – willing and able to take that seat. In this case, you will be forced to recruit externally, or risk placing someone in that role with less competence or experience and hoping that they will grow into it.
Promoting someone also has a tendency of leaving a new hole in your organisation, which needs to be filled. If someone is ready for a promotion, but their skills are difficult to replace even by external recruitment, you are in trouble. If you do not promote them, they might feel that they have no opportunity to grow, while if you do promote them, you might end up having to spend more money on recruiting someone with their skill set back again.
Total Realignment Costs
Recruitment and onboarding costs, adjusting salary and benefits, costs for recruiting people to replace promoted employees – all these costs can be difficult to adjudicate, and some can be quite hidden if you are not exactly aware of all costs involved in your recruitment process.
Consider making a form of “soccer cards” style analysis of your teams, where each member is described with strengths and weaknesses, as well as the costs involved with replacement through internal and external recruitment. That way, you can quickly tally the costs involved in making changes in your organization. These are of course cold approximations, and they are not in any way aligned with the potential immaterial benefits of promoting someone or recruiting an external candidate.
Sometimes the conclusion could be that replacing a person, whether because their duties ended up being relatively small or because their skills are too specific, is too costly to proceed with. In this case, you might end up disseminating their duties among other team members or departments related to the process their role was involved with.
Looking ahead
Just like with analysis, you have a few stages in Succession Planning. You can describe what you already have in terms of talent and skill, you could predict what changes will be coming to your organization, and then prescribe ways of dealing with that.
Knowing your employees is the first step, where you can analyse the opportunities and impact of any leavers and workforce mobility. Then you can predict what kind of costs these changes will have, and the likelihood of needing to hire externally with associated time and effort.
Once you have this, it means you are ready to start advising team managers and the upper management as HR of the preparations that might be involved in leavers, joiners and mobility.
Don’t be surprised by people who will be going absent in a fashion that is highly predictable, such as retirement or parental leave. There is no excuse to being blindsided by something like that which is announced months if not years ahead. In the case of a retirement, you have years for a senior person to transfer their knowledge to the other team members and grooming their replacement. If you are surprised by their retirement, you may need to ask them to stay on just for this purpose, which will bring extra costs with it as well as delaying their deserved leisure time.