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Ready to Retire? Prepare with a Succession Management Plan

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Part I

RISMEDIA, Feb. 5, 2008–(careerbuilder.com)–Bring active planning for the future of your company and the careers of your employees together by developing a quality “Succession Management” plan. Use this article as a resource for your company to discover and take the best steps toward successful Succession Management.

As the workforce ages and the competition for skilled employees become even tighter, the need to be proactive and implement a Succession Management plan is imperative to the future success of your small to medium sized business.

Too often, however, Succession Management or Succession Planning is left to the last moment when the process should start with the selection and retention of employees occupying key roles within your business and where a vacancy causes negative effects on your bottom-line. Having the right people positioned for succession ensures short-term success and the longevity of your business.

What is Succession Management?
Succession Management or Succession Planning is the preparation for the replacement of one high ranking employee by another, usually prompted by retirement or resignation. Succession Management involves preparing the new employee before the old one leaves, possibly with training or through work shadowing. At a senior level, management succession should be accomplished as smoothly as possible to avoid organizational crises caused by absent or inadequate top management.

Why Succession Management?
According to labor economist Douglas Braddock, “Over the 1998-2008 period, more job openings are expected to result from replacement needs (34.7 million) than from employment growth in the economy (20.3 million).”

When the EDGE survey was conducted in 2005, 42 percent of hiring managers reported it was difficult to recruit qualified employees 12 months prior and 32 percent felt it was even more challenging at that time.

In the Employment Dynamics and Growth Expectations (EDGE) Report developed by Robert Half International (RHI), the world’s largest specialized staffing firm, and CareerBuilder.com, hiring managers are voicing concern over their ability to fill vacant positions with skilled staff. When the EDGE survey was conducted in 2005, 42 percent of hiring managers reported it was difficult to recruit qualified employees 12 months prior and 32 percent felt it was even more challenging at that time.

Nine out of ten employers said finding good workers was more difficult today than compared to a year ago, and roughly the same number believe it will be equally or more challenging to recruit qualified candidates 12 months from now. Fifty-two percent of hiring managers attributed the difficulty to an overall shortage of qualified workers, up from 47 percent last year.

Employers are having the hardest time recruiting staff-level employees. Thirty-seven percent of hiring managers said they are struggling to find these candidates while 15 percent reported difficulty filling director, manager, and team leader positions. In particular, there are shortages filling the following roles:

Sales Representatives
Engineers
Nurses
Technicians
Accountants
Administrative Assistants & PA’s
Drivers
Call Center Operators
Machinists
Management/Executive

Developing Your Own Succession Management Plan
The concept of Succession Management has become an important part of many companies’ strategic planning, but not all companies. Too many think of Succession Management as having application only in large conglomerates. When in reality, Succession Management should be a part of every business’s strategic plan or vision of where your business is going in the future.

Succession Management is much more important than the time many businesses devote to it would indicate. Virtually every key position and key person in an organization is a candidate for a succession plan.

The important impact is that it is nearly impossible to successfully promote someone unless there is a trained person to take over the position being vacated.

The important impact is that it is nearly impossible to successfully promote someone unless there is a trained person to take over the position being vacated. To effectively implement a succession plan, one needs to include/consider a number of elements, including:

- What is the long-term direction of your company?

- Who are the key people you want to develop and nurture for the future?

- How does the concept of Succession Management fit into your current strategy?

- What are the career paths that your most talented people should be following? Is each path customized to fit the abilities and talents of the employees involved? (The reason for this question is that you must be sure that the employee you have in mind shares your vision of them and their role with your company.)

- Should you wait for positions to open up before promoting someone or should you make opportunities for each individual as they grow and mature to keep them challenged and stimulated and avoid losing them to a possibly faster growing company or your competition?

(Your plan should be proactive, with people moving into different areas for experience and training before they are needed in critical positions, rather than reactive – waiting for openings to occur, then scurrying around to find an appropriate candidate at the last second.)

There is no one answer or one Succession Management plan that works for all small to medium sized businesses. There are different approaches which may be used, depending on your situation. In some cases, a business may have to move some people along quickly to expose them to a broad range of experiences, and possibly to fill vacancies.in some cases, your ability to educate and promote depends on the capabilities and strengths of the people who currently occupy your key positions and your plans for them for the future – where do you see them, what are you preparing or grooming them for?

In others, a deeper involvement in selected departments or disciplines may be indicated. This depends on your business’s culture and processes in place as much as anything else. However, in some cases, your ability to educate and promote depends on the capabilities and strengths of the people who currently occupy your key positions and your plans for them for the future – where do you see them, what are you preparing or grooming them for?

Every small to medium sized business should have a Succession Management plan in place. To find out more on how to strategically set up a plan for your business, read Step B on “Building a Succession Management Plan for the Small to Medium Sized Business.”

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