Creating a solid talent infrastructure is one of the most important elements of any business. This entails having people in place to prepare for when there are inevitable changes within the organization. One way to prepare for such changes in talent is through succession planning. This strategy typically works to identify high-potential employees within the organization that could fill leadership positions. In many cases, companies also focus on upskilling their employees to develop and grow the company from within. This dynamic talent strategy helps them prepare more people in the company as new jobs are created while filling skill gaps to allow for both employee and company growth.
During succession planning, the management team starts looking for employees who could be a potential fit for vacant roles when the need arises. One of the ongoing challenges with this strategy is that people are constantly either retiring, quitting, or moving out of the workforce. In fact, 47 million Americans quit their jobs voluntarily in 2021. In February 2020, the percentage of retirees was 18.3% and this number has started quickly increasing. By August 2021, the retiree rate was 19.3%.
With the digital transformation evolving in full force, skills are rapidly changing, creating gaps as people leave former positions. This is costing companies money, and these changing skills are limiting hiring for vacant positions. Skill gaps can be challenging to identify and companies must begin to define their current workforce skills and use tools, like upskilling and succession planning, to anticipate what they will need in the future.
The 2022 Global Digital Skills Index by Salesforce indicates that 75% of people believe they don’t have the resources to learn the career skills employers want and need. Contributing factors to the skills gap are the higher percentage of low demand degrees being earned, while employers are consistently seeking more engineering and science majors. This results in smaller work pools to pull from for in demand job roles. Additionally, with digital transformation happening at a faster rate than ever, the time that high-value skills are relevant is constantly shortening.
Succession planning provides opportunities for employers to figure out which employees are a close match that can be developed over time. Upskilling can be a strategic way to be proactive for upcoming or unexpected changes identified through the succession planning process.
What is upskilling?
Upskilling involves learning new skills, but also involves elevating the existing skills employees already have. This allows your talent to develop for specific career paths. These career paths can change based on aspiration or the knowledge that their skills or expertise could be better utilized in another area. This means the company must get involved on a cultural level to really get employees on board. An effective upskilling plan involves different techniques that enhance internal skills and any external resources. When upskilling employees, it’s important to meet them where they are in terms of learning style and individual needs. Sending employees to a class, whether virtually or online, microlearning opportunities, and internal lunch-and-learn sessions are good examples. Having mentoring and shadowing programs is also a good way to upskill employees.
Creating a succession planning strategy
How does succession planning work? There are six steps to being successful in a succession plan:
- Identify key areas and positions
- Identify the needs and capabilities of those positions
- Identify viable candidates and interested employees
- Create professional development plans and opportunities
- Integrate the plan into the hiring strategy and evaluate the effectiveness
How can succession planning be used differently?
Companies can start succession planning from the very beginning when they hire new talent. By using it in the recruiting strategy, they will be able to hire talent that has the skills or can be developed for future success in the company. It is important to realize that succession planning is a focused process for having continuous talent in the pipeline. This takes time and usually unfolds within 12- to 36 months.
Strategically, the succession planning process is key in facilitating upskilling for employees. It’s important for managers to look at their current workforce to see who can be tapped for new roles, and the HR department should work with those managers when hiring to fill those vacant positions. This should be the norm across the organization to achieve true talent mobility.
Planning for the future
Employers have several challenges to consider when creating a viable succession plan. The biggest challenge is not having the right resources available to be able to tackle the rising number of skill gaps. In a McKinsey survey, 9 of 10 global leaders and executives indicate their companies are currently facing a skills gap or is expected to develop additional gaps in the near future. These skill gaps vary, but are all essential to companies moving forward in the digital transformation.
Placing an emphasis on closing these skill gaps and developing employees for success helps ensure long-term benefits for both employees and your organization. Companies that upskill their employees have better productivity, increase loyalty to the company, and help create well-rounded teams. This assists companies in moving their workers up the career ladder which creates an investment mindset for all. For these reasons, upskilling employees also helps to increase retention within the organization. Employees increase their strength in skills and grow in understanding of the company culture and processes as they are developed over time. This allows for a larger talent pool of dedicated and well-educated employees to choose from when succession planning decisions must be made. Upskilling is a necessary investment now, and for the future workforce to be able to meet the skill needs of the next set of leaders.