Blog

Why your business needs a succession plan (and 6 tips to implement one)

09/05/2017 / Comments 0

Why your business needs a succession plan

It’s often said that a company’s team is its most valuable asset.

Whether you’re a small business with only a handful of staff or a larger organisation with specialist departments, everyone knows their role, their responsibilities and your company.

But what happens should a key employee – or even a whole department – leave? Unfortunately, according to new research, 61% of businesses haven’t properly answered this question and are without a succession plan.

What is succession planning?

Succession planning is used by large and small businesses to help them minimise the impact the departure of important members of staff can have.

It focuses on identifying and nurturing talent to fill business-critical positions, typically by ensuring existing team members receive regular and focused training to improve their skills and understanding of senior positions.

One in two of those already with a succession plan in place say theirs provides training to widen employees’ capabilities, whilst ensuring they view their long-term futures with that company.

As a result, staff can be promoted quickly and the cost and burden of recruiting new staff reduced, all whilst improving staff loyalty as they gain the comfort that their futures are being considered and looked after.


Related articles:


Does my business need a succession plan?

While the smallest businesses may not feel as though a succession plan is required, it is here where the largest impact is usually felt when an important team member leaves.

In fact, more than one in seven companies cite the departure of a senior executive as the biggest threat to their business, while one in six are concerned about the potential of a whole team leaving.

Moreover, only one in ten could confidently say their business didn’t need a succession plan because no staff member was indispensable and couldn’t be replaced, with a further one in six not expecting any key employees to depart in the short term.

What are the main benefits?

Effective succession planning can bring advantages for both the business and its employees.

Of the 39% of survey respondents who currently have a succession plan in place, two in five say they already know who would fill each senior position should that person leave. This ensures any disruption to the business is minimised and staff can simply ‘step into the role’.

Part of the process will include a review of your existing staff and their skillsets, which will also help to identify areas they could benefit from additional training or gaps in your business that need filling.

But more importantly it will demonstrate to your staff that you care about their development and give them plenty of motivation to excel, in the knowledge that their hard work and loyalty will one day be rewarded with a more senior and higher paid job.

This is a significant factor given the challenges and cost of recruitment nowadays, where it can be difficult to find the right candidate.

Six tips for succession planning

  1. Make your plan clear, well-communicated and supported by senior management
  2. Consider your business’s medium and long-term strategy
  3. Identify the most critical and vulnerable roles within the organisation
  4. Remember to look at an employee’s potential as well as performance
  5. Don’t forget staff don’t always want to move upwards; consider that some employees’ skills may lie in other ‘sideways’ roles within the company
  6. Align your plans with other HR functions, such as recruitment, training and performance reviews

Did you find this article useful? Don’t miss 13 ways to recruit and retain happy employees.

Comments

No comments yet - be the first!

Funders we work with

  • PNC Business Credit
  • Leumi ABL
  • Ultimate Finance Group
  • Creative Capital
  • Barclays
  • Outsauce
  • Secure Trust Bank
  • Bibby Financial Services
  • Santander Corporate & Commercial
  • Calverton Finance
  • Nucleus Commercial Finance
  • Catalyst Finance
  • Roma Finance
  • Invoice Cycle
  • iwoca
  • Royal Bank of Scotland
  • Davenham Asset Finance
  • Regency Factors
  • 1pm
  • GapCap Cashflow Finance
  • Assetz Capital
  • Factor 21
  • Platform Black
  • Skipton Business Finance
  • ABN AMRO Commercial Finance
  • Pulse Cashflow Finance
  • Close Brothers Invoice Finance
  • Asset Advantage
  • Lloyds Bank Commercial Finance
  • IGF Invoice Finance
  • Partnership Invoice Finance
  • Amicus Commercial Finance
  • Innovation Finance
  • Aldermore Invoice Finance
  • Davenham Trade Finance
  • Woodsford Tradebridge
  • Working Capital Partners
  • Trade Finance Partners
  • Shawbrook Business Credit
  • Metro Bank SME Finance
  • Everline
  • Positive Cashflow Finance
  • Henry Howard Cashflow Finance
  • Market Invoice
  • Ashley Commercial Finance
  • Hitachi Capital Invoice Finance
  • Team Factors

Authorised and regulated by the Financial Conduct Authority (FCA number 730445)
We are a credit broker and not a lender and offer credit facilities from a panel of lenders

Our website uses cookies. For more information about managing cookies, visit our Privacy and Cookie Policy. Continue