Succession planning is a strategic process that ensures the long-term sustainability of an organisation by identifying and developing future leaders from within the company.

While succession planning involves various stakeholders, the HR department plays a pivotal role in driving this process. HR professionals bring their expertise in talent management, organisational development, and employee engagement to design and implement effective succession plans.

“There is an increasing number of businesses now saying they can’t find the people in the market that they want to hire,” Amplify HR Founder Karen Kirton said.

“This is where succession planning becomes really important, and it is one of the key ways that HR can add value to a business by helping the managers or the owners of the business to review the different employees across the business. It looks at each role in terms of the individual, their performance and their leadership potential but also in terms of the role itself and the importance of that role to the business.”

Building a succession planning process

One of the primary responsibilities of HR in succession planning is to collaborate with senior leadership to identify key positions within the organisation. These positions are crucial for the company’s continued success and require a smooth transition when vacated, according to Ms Kirton.

HR professionals work closely with executives to analyse job roles, responsibilities, and the competencies necessary to excel in these positions. By understanding the core competencies required for success, HR can build a framework to assess potential candidates and identify skill gaps that need to be addressed.

Once key positions and competencies are identified, HR plays a vital role in creating a talent pipeline that nurtures high-potential employees. HR professionals employ various talent management strategies such as mentoring, training programs, and development initiatives to groom individuals for future leadership roles. By offering growth opportunities, HR helps in attracting and retaining top talent, fostering a culture of continuous learning and development.

Performance management is also a critical aspect of succession planning, and HR is responsible for aligning performance evaluation processes with long-term talent development goals.

In addition to identifying and developing potential leaders, HR ensures the smooth transfer of institutional knowledge from outgoing executives and talent to their successors. This involves creating structured knowledge-sharing programs, encouraging mentoring relationships, and leveraging technology platforms to capture and disseminate critical information.

“I think the role of HR is not only to focus on succession, but it’s also about identifying who are the people that are performing really well and have leadership potential and how do we grow them through the business,” Ms Kirton said.

“Whether they end up in a role or not down the track, during that succession plan, what we’re doing is we’re making sure that we’re growing and developing them so that they’re more productive in the business through that period, but they’re also more likely to stay with the business because we know that growth and development is the key driver of engagement.”

Talent shortages

With recent talent shortages seen across businesses, succession planning is becoming more essential for the long-term success of any organisation, and the HR department plays a central role in driving this process.

Ms Kirton said the challenge is that there is still some hesitancy to take up a succession planning process, especially for smaller businesses, as they don’t think they are big enough to necessarily offer career paths or to be able to identify someone as a successor.

“I think instead the role of HR is really to show the benefits of the process that it’s not just an exercise or another form,” Ms Kirton said.

“It’s actually operationalising and bringing to life what this means for each individual in the organisation no matter the size and to get those actions for each person with the manager and what they’re going to do to develop those people into potentially new roles or increase productivity overall.”

Ms Kirton said that succession planning is one of the key tools that can be used to grow a business’s own talent internally so they’re not as reliant on the external market.

“It is a really important process but potentially more so at the moment where we still have skill shortages and a pretty low unemployment rate,” Ms Kirton said.

“A full succession plan should be done once a year, and then it should be looked at each quarter to just make sure that any actions that they put on the plan are happening.

“The business should also be committing the budget, resources and time to be able to do that as well because if there’s no action based on the plan, then people will feel it’s a waste of time, and they won’t want to do it again in the future. I think it’s really important to make sure that these things are allocated up front and that everyone is committed to be able to do these actions.”

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