Talent Acquisition

The Role of Talent Acquisition in Succession Planning

Businesses are constantly evolving and looking for ways to protect and grow revenue. Innovations that came to life during the internet’s evolution are driving new service delivery and customer engagement models, which are revolutionizing how goods and services are exchanged.

The world is also still reeling from the historic disruption brought by the pandemic. These events are forcing talent acquisition and talent management teams to pay closer attention to the growing number of leadership exits from organizations to ensure that transitions are seamless - from an operational perspective.

When a leader in a vital role departs the organization, it is absolutely necessary for operations to continue as normal with minimal disruption. As we learned in 2020, even the smallest disruptions to a business can have a negative impact. A senior executive’s reasons for leaving can vary but mirror many of the reasons that junior staff depart for another position. Yet the impact can be significant, given the responsibilities of senior roles, the complexity of the positions, and the difficulty of finding the right replacement.

While it is far from ideal for a senior executive to leave the organization, it should also be taken as an opportunity to examine why the executive is leaving (e.g., not being challenged, lack of autonomy, inability to add value, insufficient goals) and if there are changes that can be made to prevent similar departures in the future.

For leaders who intend to leave on a positive note, it is essential for them to be transparent about their responsibilities so that a handover to colleagues is smooth. In the event that a handover is not possible, having an action plan to refer to can ease a difficult transition period. Prolonged disruptions to normal operations can have a devastating impact on employee morale and investor confidence - in addition to the business model.

While this is more often discussed from the perspective of technology, avoiding disruption of any kind is a near impossibility in today’s business landscape. What’s important is how the organization responds, and how talent acquisition plays a critical role in ensuring their talent pool is ready to take over.

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This is where the long game of succession planning can make all the difference when it is built into talent acquisition strategies. This process prepares an organization for the retirement or departure of senior executives by continuously identifying potential internal candidates and preparing them to become leaders in the organization.

This blueprint for the future strengthens business resiliency by enabling teams to continue operating at a high level when an executive departs and shows the rest of the employees that business leaders are investing in the long-term health of the organization.

Companies should see this as a win-win scenario. On the one hand, the business is prepared for the transition and can look to its employees to identify a replacement before expanding the search to external candidates.

On the other, employees - seeing the investment in the future - are encouraged to remain at the organization for longer tenures. Yet, despite its importance, many companies in the United States do not have a formal succession plan. In a survey of 580 HR professionals, only 21% reported having a formal plan in place.

Family businesses in the US fared only slightly better, with a third of companies having a formal plan - according to a PwC report. Why would organizations open themselves up to a scenario that could result in employees spending countless hours and resources filling the gap from an executive’s departure?

No one likes to imagine what would happen when a critical member of the team leaves, which is understandable. However, without an effective succession plan, employees are prone to uncertainty about the direction of the organization - and their potential role in it.

This sentiment can grow and fester for years until it distracts from daily operations and creates strife among colleagues. Practically speaking, if no one knows how to do the leader’s job, the entire team will suffer.

Additionally, if the talent acquisition team is required to look outside the organization for a replacement, the time to fill the role can be lengthy and burdensome for employees who have taken on the extra workload. Investor confidence can also be shaken with the departure of a senior leader if the situation is not handled with care. Failing to prepare employees to take on senior roles also sets up a potential loss of institutional knowledge when a leader departs. An episode of the TV show, “Succession” offers several examples of why this kind of uncertainty is far from ideal.

As today’s leaders leave for new positions or retire, it is essential to think about succession plans from the talent acquisition stage - and not just when an executive resigns. This sets the standard that candidates will be strategically recruited and trained as employees to take on key leadership positions.

Let’s look at some ways that HR teams can contribute to their organization’s succession plan through the talent acquisition and management processes.

How a succession plan guides talent acquisition and management

Building an organization with engaged, long-tenured employees who have the potential to succeed as future leaders begin with the HR department’s hiring strategy. Talent acquisition professionals who are well versed in the succession plan can approach their hiring responsibilities with the goal of attracting and retaining individuals who bring new skills to the organization and can be trained to take on greater responsibilities.

As explained in another blog post, recruitment and talent acquisition activities address different hiring needs, although both are effective in identifying candidates.

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It is important to note that HR teams that are focused mainly on recruiting - or simply filling vacant positions - are likely not applying a strategy to their efforts or considering the future needs of the organization. It is more of a reactive and tactical approach that is useful for filling temporary or entry-level positions. Taking a more proactive approach to hiring through a talent acquisition strategy enables the HR team to attract professionals who will contribute to the organization in a meaningful way over the long term.

The organization can lay the groundwork for an executive departure before it happens if HR professionals are constantly thinking about attracting, hiring, and retaining professionals whose skills match up with the long-term needs of the company. Formulating a hiring strategy based on an established succession plan empowers HR professionals to target and build relationships with the most qualified people and look at ways to reduce turnover.

After acquiring the right talent, a succession plan can advise HR teams about what information to include in employee training programs to facilitate the acquisition of new skills and the transfer of institutional knowledge.

Employees who take advantage of these career development opportunities may remain with the company for a longer period because of the training they received. The International Institute for Management Development concluded that there are four benefits to continuous engagement with employees in alignment with a succession plan.

The 4 Key Benefits of a Succession Planning

  1. There are more qualified individuals at the company who are capable of filling a vacancy for a senior position.
  2. Looking within the company to fill a vacant role saves time and resources that are typically used for lengthy external executive searches.
  3. When a qualified professional steps into the role, the risks from a senior executive’s departure are minimized.
  4. Selecting an individual to fill a vacant position can be better planned than many of the ad hoc selection processes that take place when a senior executive leaves abruptly.

Picking the right HR technology to meet the organization’s talent management needs

HR technology solutions are valuable resources that can help teams organize their talent acquisition activities and standardize successes across the organization. Applicant tracking systems (ATS) like Manatal allow HR professionals to cast a wide net to identify the most qualified candidates based on your specific criteria for each role as well as your immediate and long-term hiring objectives.

The hiring and onboarding process is streamlined by using a cloud-based solution. This allows the team to focus on the candidate's experience and improves decision-making capabilities by allowing them to easily identify the most qualified individuals who have the potential to be a lasting hire.

HR teams can also use ATS platforms to track metrics such as employee tenure and cost-per-hire to understand how well talent acquisition strategies are working - or if there are issues that need to be addressed. So much data is generated from HR solutions that it can be difficult to harness the wealth of information for effective and efficient decision-making. With a succession plan, it is simpler to formulate a winning strategy that aligns with immediate and long-term business objectives.

Succession planning empowers HR teams to make meaningful contributions to the organization’s business objectives. Businesses that create and continuously operate in line with succession plans are not only in a better position to manage an executive departure but they are also encouraged to invest in their employees to make transitions as smooth as possible.

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Why begin succession planning now

There are a few key reasons to consider developing a succession plan now if your organization does not currently have one. If the pandemic has taught us anything over the past couple of years, it is that a company can experience a sudden departure at any time.

As professionals reconsidered their priorities and made changes in their careers to align with the way they wanted to live, companies were pressured to make adjustments and move quickly to replace employees at various levels of the organization. This phenomenon was not limited to rank and file employees, as company leaders are also departing their positions in large numbers. According to Challenger, Gray & Christmas, CEO exits in the first quarter of 2022 were up 29% compared to the same period in the prior year, totaling 395. It is also the highest quarterly total since Q1 of 2020.

Another reason to turn to succession planning is to manage the rapidly aging workforce in developed countries like the United States. As more of the Boomers retire, they are leaving a gap in personnel as well as in institutional knowledge that won’t be easily filled. HR professionals have the difficult job of creating a strategy that prepares the organization for the retirement of personnel in crucial roles by tailoring talent acquisition goals to fill gaps and implementing internal programs that facilitate career development and knowledge transfer. Failure to prepare for this eventuality will ultimately threaten productivity and stunt innovation across the organization.

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If employee retention is a concern at your organization, a formal succession plan tied to career development programs may strengthen loyalty. As management consultants from Oliver Wyman have observed, employee loyalty has been “in decline for two decades” - and the pandemic has not helped.

The health crisis was the final straw for many employees who have spent most - if not all - of their careers juggling family responsibilities, heavy workloads, and tone-deaf employers who did not always show loyalty to them in the tumultuous years since the financial crisis reduced job options. Even today, the majority of employees are not enthusiastic about - or engaged with - their job. According to a Gallup study, only 21% of workers worldwide were engaged with work after marginal improvement for almost a decade.

For companies, it is not sustainable to continue weathering changes of this magnitude without a plan that seeks to attract talent with new skills, retain high performers who have the potential to lead, and leverage employees with deep institutional knowledge. Implementing a succession plan, communicating it to employees, and using it as a guide for career development investments dispels uncertainty and can also encourage employees to remain with the company for a longer period.

If your organization does not currently have a succession plan in place, now is a great time to engage the C-suite to create one and begin aligning your team’s hiring and talent management strategies to support this plan. Although executive departures are unavoidable, utilizing a succession plan to guide hiring decisions can make all the difference to the health and welfare of the organization. This investment in the future will always be rewarded when it is time to make an executive transition.

On the path toward perfect succession planning, implementing a tool like Applicant Tracking System can help smoothen your ride while ensuring that a solid recruitment strategy is laying on the table. 

Manatal is an ATS tuned to help organizations strengthen their recruitment while laying a strong foundation for sustained growth. Start your 14-day Free Trial now to explore our innovative features and find out how you can leverage your succession planning within a few clicks. 

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