Succession Planning – Risk Management for your Human Resources

Posted on 11/14/2011 at 08:00 am

Imagine these scenarios:

  • You look at your workforce statistics and realize that 2/3 of your technical experts are at or soon to be at retirement age and you have no idea what their plans are for a continued career at your organization.
  • Your three top performers in the organization decide it is time to move on to “do their own thing” and you are left with a big vacancy in your leadership pipeline. 
  • You just found out that a long-time employee who is the exclusive source of key subject matter expertise in a mission critical function is sick and taking an indefinite leave of absence.
  • Due to recent regulatory changes, your organization’s mission is going to change over the next three years and a whole new set of skills will be needed to accomplish the organization’s objectives.

While these scenarios may sound drastic, they are real challenges that both federal government and private industry organization’s can face at any point in time.  If any one or more of these events should come true, an organization could be at risk for any or all of the following:

  • Inability to meet short and/or long-term business objectives
  • Lack of internal talent capable of stepping into key leadership roles
  • A workforce without the necessary skills to meet future requirements
  • Loss of key institutional and technical knowledge about the organization
  • Lack of continuity in customer/client service

Many organization leaders ask themselves how they can proactively seek to minimize the risks noted above.

The answer is - SUCCESSION PLANNING.  Succession Planning is risk management for your human resources.

Business Directory.com defines risk management as the identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. 

This is exactly what succession planning is – identifying, analyzing, and assessing current and future human resource requirements. Proper succession planning ensures that an organization manages, avoids, minimizes or eliminates the risks of not having the right people, with the right skills, at the right time, to accomplish the organization’s mission and ensure continuity of operations. 

Let’s explore the concept of succession planning as risk management in a bit more detail.  Below is a typical approach to succession planning:

 

Applying the definition of risk management to this approach, it is easy to understand the concept of Succession Planning as risk management:

- Steps 1 – 3 are all about identifying the risks and answering these key questions:

  • What is the current and future mission of the organization?
  • What mission-critical roles, knowledge, skills and competencies are required to fulfill current and future organization goals and objectives?

- Step 4 is about assessing and analyzing the risks and answers these key questions:

  • What is the longevity of the current workforce?  
  • What does the current workforce look like in terms of knowledge, skills and competencies they possess?  
  • What is the potential and interest of the current workforce to assume mission-critical roles in the future?

- Step 5 and 6 are about controlling, avoiding, minimizing or eliminating the risks and answer these key questions:

  • What development strategies can be put in place to close the gap between the knowledge, skills and experience of the current workforce and the leadership and technical competency requirements for the future?
  • How can we retain mission-critical knowledge within the organization?
  • What are the most effective strategies to identify and bring on board new employees with the mission-critical skills we need to accomplish our future business objectives?   

Open and transparent communication throughout the succession planning cycle, as well as continuous evaluation of the succession planning outcomes are also essential to manage the risks associated with internal acceptance of and support for the succession planning activities.

In summary, while some risks in life may seem unavoidable, the human resource risks associated with changing organization goals and objectives, vacancies left by retiring or departing employees, loss of key institutional or technical knowledge or lack of leadership continuity can be managed through strategic and deliberate succession planning.  

- Wendy Myers, Senior Consultant

Tags: Risk Management  Succession Planning  

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