Succession planning is important for all business owners. Working out exactly who should take over from you when you retire, or if you pass away, and setting out a process for that succession helps build stability within the company and avoid a power struggle later on. However, it’s also a useful way to ensure that the business retains its top talent.
Research by the HR Innovation Practices Observatory found that many employers are reliant on a traditional ‘career ladder’ structure, with talent moving vertically within the business based on length of service. However, this research found that this structure risks alienating multi-talented members of staff who can thrive across different sectors and specialisms.
This alienation can result in these employees losing motivation and exiting the business, leaving business owners facing significant expense in trying to replace them.
So how do you set in place a proper succession plan, to ensure that you hang onto the most valuable members of staff?
Get a plan in place early
The earlier you set out your succession plan, the better. Who is best placed to take over once you step down? Who is best able to do the job, not simply the person who has been there longest?
Don’t simply assume they want the responsibility. Speak to them about their own career ambitions and how they would like to help the business after you step away.
Don’t leave training to the last minute
Make sure your chosen successor is able to step into the job at any point. That means giving them proper training – a taster of what the day-to-day process of running the company is.
Speak to everyone
A succession plan doesn’t work if it is kept secret. Speak to everyone in the business, set out exactly why they have been chosen to take over and a clear timetable for that transition.
Planning for the future and establishing exactly what you want to happen with your business, your home and your assets, should you pass away is incredibly important. It can bring stability and avoid upset for your loved ones at an already upsetting time. Getting advice from an expert and putting together a proper Will is the best way to do that.