Many people would be surprised to see the discrepancy between their general perception of how mature their succession plan is, and the results of the Succession Planning Checklist. In fact, most organizations believe they are engaging in succession planning, when really, they are using a strategy called replacement hiring. This typically boils down to a misunderstanding of the differences between the two. With that in mind, let’s review some of the main distinctions between succession planning and replacement hiring.
The first area of discrepancy is planning. Replacement hiring is typically employed when there is an immediate need. A leader decides to retire, a role becomes vacant, and either a subordinate fills the role, or an external candidate is hired. This typically results in a long learning curve, as there would likely not be any transition period between the incumbent and their replacement.
Succession planning, on the other hand, uses a long-term perspective to build a pool of talent before it is needed. That way, candidates are ready for a role if and when your leaders decide to step down. Candidates are developed in advance of a role becoming vacant, and long-term training, such as job-shadowing, become available options to prepare candidates for their future responsibilities. This forward-thinking perspective also allows an organization to prepare not only to replace their leadership roles, but to fill the vacancies left in their middle management roles when these individuals move into higher positions.
One of the things we often miss in succession planning is that it should be gradual and thoughtful, with lots of sharing of information and knowledge and perspective, so that it’s almost a non-event when it happens. – Anne M. Mulcahy
Given its reactive nature, replacement hiring is focused on the now, and on the immediate need of filling a vacant role. Traditionally, the goal of replacement hiring is to find a candidate that is the closest possible approximation to the leader who just left. This leaves little room for growth and future-planning for the role.
Succession planning, on the other hand, begins at the bottom and is integrated into policies throughout the organization. Employees, even at lower levels of the organization, can be hired with their long-term potential in mind. It can be integrated into performance management by asking employees about their career aspirations and ambitions. Succession planning should align with long-term strategic planning to ensure succession candidates have opportunities to grow their skills and prepare for their future in your organization. Consider the many ways you can weave succession planning into your daily operations to maximize the benefits to your organization.
Even without a mature succession plan in place, many organizations have a back-up person in mind for their most senior roles. Generally, this decision was made by “default”, and may not reflect careful planning and thoughtful decision making. Replacement hiring runs the risk of maintaining the status quo in an organization, and not capitalizing on the benefits of a systematic process to choosing succession candidates.
Good succession planning allows a company to choose potential candidates based on the requirements of the role, and their abilities to meet these requirements. A well-designed plan will use objective, evidence-based assessments to determine the right candidates for the right role, and will involve multiple stakeholders, such as the role incumbent, their peers, and members of your senior management team.
While 71% of organizations say they have a leadership bench prepared for continuity of a position, only 30% say they have a bench prepared with options.1
One of the potential drawbacks of replacement hiring only is that it may be difficult for employees to predict if they are being considered for promotion, and when that promotion may be expected. As such, it may be difficult to retain talented individuals looking to advance. Replacement hiring also does not inherently plan for employees to develop their skills or enhance their abilities, making it difficult to grow talented employees in the first place. Candidates may not be ready to take on the position they are given in replacement hiring, resulting in potential costs and delays for the organization as the new leader learns the ropes of their role.
Succession planning is developmental in nature. Even when you cannot offer a high-potential employee a promotion at that moment, by providing them with opportunities to try their hand at new tasks, gain experience on a variety of projects, or build their skills, employees will remain engaged and more likely to stay with your organization. This also has the added benefit of creating a more developed workforce for you to choose from when a position does open up in the future. The best succession planning processes are mutually beneficial for employees and organizations alike.
See below for a quick table of the differences between replacement hiring and succession planning. We also provide you with a simple checklist to determine the degree to which you are engaging in succession planning. Still not sure if your organization has a mature succession plan? Check out our Succession Planning Checklist here.
Replacement Hiring vs. Succession Planning
How SIGMA Can Help
Our Succession Planning Launch Series can help. In 30 days and less than 8 hours from your leadership team, the Succession Planning Launch Series delivers a comprehensive full-year Succession Plan customized for each member of your executive team. Find out more here.
1 Corporate Executive Board Company (2014). Succession strategies for the new work environment [PDF]. Retrieved from http://www.assessmentanalytics.com/wp-content/uploads/2014/12/CEB-Succession-Planning-Presentation-Deck.pdf