If your payroll manager of 12 years announced they were leaving in 2 weeks, would you have a plan?
Succession planning is designed to help you answer this question with a resounding yes. Finding a suitable replacement for your departing top talent is much easier when you’ve devoted time to scouting and training potential successors in your organization.
Think of it as a contingency plan for your talent pool. When Plan A (valued employee in an important role), decides to leave/retire, Plan B (recruit the next payroll whiz) must be put into action. Timing is crucial. Waiting too long to fill a talent void can put your company at risk, so it’s important to be prepared.
Employee turnover is inevitable
Critical roles are present at every level of an organization, and companies try their hardest to retain employees in these positions. Change is inevitable. Roles can change abruptly and integral employees can leave a gaping hole in your organization – taking with them their specialized knowledge, their valuable interpersonal relationships, and their contributions to your company’s success.
When your valued employee is on the brink of departure – whether it’s an arranged exit or an impromptu retirement plan announcement – the last thing you want to do is hire someone too fast. Promoting or hiring a new employee last-minute doesn’t make for an effective, smooth transition from one employee to another.
It’s important to examine your organization’s vital roles ahead of time and recognize what qualities you’ll want to cultivate in potential replacements. You’ll also want to keep your eye out for potential future hires by keeping your talent pipeline full.
Each of your employees is as valuable as the next – they all bring something unique to your organization. Succession planning helps you come to the important realization that one day even the leaders in your organization will move on. It’s hard to envision, but necessary to plan for.
3 fundamental steps to creating a succession plan
Don’t get caught off guard. Be proactive about succession planning for your organization with these essential starting points:
1. Preparation is key
Succession planning starts with – you guessed it – planning. You need to have proper processes in place in case any of your key employees leave suddenly.
Your succession plan should take into account the impact of the employee’s role in their department, and in the organization at large.
Why is their work so valuable?
What specializations make them hard to replace?
Don’t be afraid to dig deep, even if that requires asking their manager a few questions or examining their position and their day-to-day activities more closely.
Consider this, if a valued team member leaves the organization, how would it affect your daily operations and your company’s overarching goals? Best guess, significantly. If you can answer these initial questions, you’re halfway there.
Now that you’ve acknowledged the importance of these employees in your company, how will you choose a suitable replacement?
2. Identifying potential candidates
When creating a succession plan, you don’t want to limit your search to one internal candidate. Instead of concentrating time and energy on a single employee, take this opportunity to expand your talent pool.
You may have people in mind within your current team for soon-to-be-vacated roles, and the idea of a clear-cut, internal line to these key roles may seem logically sound, but is it a bulletproof strategy? Not so much.
As a business leader, it’s natural to think it’s better to hire and promote from within. You may already have potential employees plotted in your org chart because their succession seems like the next best choice.
There are several reasons why you shouldn’t pin your hopes and plans onto just one prospect. Their goals and plans for the future might not align with your company’s objectives, they may be looking for new opportunities or entertaining offers from competitors, or simply, a change in position is not what they want.
Either way, your recruitment efforts should include a few carefully considered options. It reduces the risk of placing too much responsibility on a single employee who might not meet your expectations.
Keep an eye out for promising employees. If an employee possesses the skills you seek to replace but you’re doubtful of their capability in a senior role, don’t overlook them – perhaps an opportunity may arise for them to prove themselves.
You can’t really proceed with anything further until you know that the idea of moving into a new role is of interest and excitement to your chosen candidates. So what do you do? Well, here comes the easiest step – get to know them. Talk with them about their personal goals, their thoughts on professional advancement, and propose the tentative idea of stepping up to a new role. Remember that you’re not guaranteeing anything, so make that clear in your chats.
Once you’ve got a good selection on your hands, how will you make sure they’re prepared?
3. Invest in training
As future leaders, employees targeted for succession need opportunities to learn, grow, and develop their skills. According to the Canadian Payroll Association, payroll professionals should both upskill and reskill to perform their roles successfully. They should also be equipped with deep industry knowledge, as well as analytical, problem-solving, and people skills.
Your succession choices are ideally well-versed in their field and have a grasp on these qualifications. Now, it’s time to enhance their skills through training and professional development.
- Have them assume more responsibilities
This helps you assess what areas of improvement and development are needed. Whether it's taking on a few of their manager’s key duties, or shouldering more responsibility in their department, it’ll help them gain relevant knowledge, experience, and offer optimized training.
This lets your candidates experience a range of activities, increasing their organizational know-how and involvement. The CPA confirms that rotational programs also create employee engagement and excitement, both in their current role and in the possibility of advancement.
If you see their worth, other companies will too. Assuming you’ve had the chance to sit down and chat about their goals, you’ll have an understanding of what gets your candidates going. Provide those intrinsic motivators, show them the road to their advancement, and let them know they’re valued.
How does succession planning fit into your hiring strategy?
You’ve spent a lot of time pondering the implications of identifying, training, and motivating the highest-caliber individuals to occupy key roles in your company. But when you promote a potential successor, who will fill the position they leave behind?
That question opens another can of worms – namely, the can we just explored. Succession planning is a cycle, so be prepared to coordinate your internal recruitment efforts with your overall hiring strategy to fill the gaps in talent as quickly as possible.
Knowing where to direct your future recruitment efforts in advance is just one of the many benefits of succession planning.
Curious how payroll will evolve in the future and what that means for your organization?
Join us on June 23, 2021, at 11 am MDT for a live conversation with Avanti Co-CEO, Amin Lalani. Amin will revisit some of the big topics from his panel discussion on The Future of Payroll at this year’s Payroll conference.