No company should be without a succession plan. These plans not only review employee performance but guide your employees along their chosen career path (ideally with your company). Succession planning should be a commonplace for every business.
According to the U.S. Department of Labor’s Bureau of Labor Statistics, there are currently 7.4 million job openings in the United States and nearly 6 million workers are either leaving or starting a new job. Simply put, employees won’t hesitate to leave your company because another opportunity is waiting just around the corner.
If that wasn’t reason enough to have a succession plan, here are three more to consider.
Succession Plans Decrease Employee Turnover
Employees want opportunities to grow with your company. With 78 percent of employees stating they’d stay with a company if they see a career path, having a succession plan in place allows you meet that goal.
Succession planning helps companies develop professional development and career advancement opportunities, like training and advancement, for their employees. Your employees will stay longer because they’ll be invested in your company and want to contribute to its success.
A Strong Succession Plan Reduces Risk
How many of you have gone through this scenario – a longtime, essential employee decides to retire early, leaving your other employees scrambling to determine who will take over the employee’s responsibilities? The problem is as stress levels rise, production drops and you’re left with unhappy employees.
Having a succession plan in place reduces risk. Succession planning helps identify talent gaps, filling any large holes left when an employee retires or leaves, minimizing the effects on company culture and function.
Having a Succession Plan is Cost Effective
The facts are employee turnover costs companies billions of dollars. In 2018, employers paid about $600 billion in turnover costs and that number is expected to increase to $680 billion by 2020. Not only do succession plans promote employment development, making for happy, loyal employees, but when positions are filled internally, the expenses associated with hiring, onboarding and training a new employee are saved. The bottom line is strong succession plan helps protect your company’s bottom line.
Arcoro HR understands the need for effective succession planning and has several solutions, such as the Arcoro HR Performance Management System and Arcoro HR Succession to help simplify the succession planning process. Contact our team today to learn about which tailored solutions will best meet the unique needs of your organization.