Succession Planning: A Practical Guide for HR Leaders

What Succession Planning Is, and What It Is Not

Succession planning is the ongoing process of identifying the roles an organization cannot afford to leave empty and deliberately developing people who could step into them. The output is not a list of names. It is a set of people who are more ready next year than they are today.

It is often confused with two neighbors:

You need the first for business continuity, and the third makes the second much easier. Our article on How HR Builds Strong Leadership Pipelines covers the broader development system; this guide concentrates on the succession plan itself.

Which Roles Need a Succession Plan

Planning for every position spreads effort too thin. Planning only for the C-suite misses the roles that actually stop operations. Rate each role against a few criteria and plan for the ones that score high.

A role is critical when most of the following are true:

• A vacancy would quickly affect revenue, safety, compliance, or customers.
• The knowledge or relationships involved are hard to document or hand over.
• The external market for the skill is thin, or hiring takes a long time.
• The role holds a license, registration, or signing authority the business needs.
• There is a single incumbent with no obvious backup.

Seniority is not on that list. A payroll lead, a controls engineer, or the one person who understands the legacy billing system may be more critical than a vice president. Start with ten to twenty roles, not the whole chart, and link the selection to your workforce planning for future business needs so that roles the business will need in three years are included alongside roles it has today.

The Succession Planning Process in Seven Steps

1. Get the sponsor and the scope

Succession planning that HR runs alone becomes a filing exercise. The CEO or business-unit head should own the decisions; HR owns the process, the data, and the follow-through. Agree in advance on which roles are in scope and who sees the results.

2. Define success in each critical role

For each role, write a short success profile: the outcomes the role must deliver, the experiences that prepare someone for it (for example, having managed a budget, led through a layoff, or run a multi-site team), and the knowledge or credentials required. Base it on the role as it will be in two or three years, not on the current incumbent's personality.

3. Identify potential successors

Collect nominations from managers, but do not rely on them alone. Managers tend to nominate people who resemble themselves and people they see every day. Add objective inputs: performance history, relevant experience, and the employee's own stated interest. Ask the person. A successor who does not want the job, or cannot relocate for it, is not a successor.

4. Assess readiness

Hold a calibration meeting where leaders discuss each candidate against the success profile and assign a readiness rating. A simple scale works:

Many organizations also use a 9-box grid, which plots current performance against assessed potential on a three-by-three matrix. It is a useful conversation aid, with two limits. Potential ratings are subjective unless you define the term in observable behaviors, and a box label can stick to a person long after the facts have changed. Treat the grid as an input to discussion, review it at least annually, and record the reasons behind each placement.

5. Build development plans

This is the step most plans skip, and it is the only one that changes readiness. For each successor, name the specific gap and the specific experience that closes it: a stretch assignment, a rotation, leading a project, acting in the role during a leave, a mentor, or formal training. Our article on How HR Supports Career Development has more on structuring these plans, and our Leadership Training page lists course options for the formal component. When the successor in question is an HR manager being prepared for a director role, the Strategic HR Leadership Certificate Program is designed for experienced HR professionals preparing for leadership roles.

6. Decide what to tell people

Organizations differ on transparency. Telling employees they are in a succession pool supports retention and lets them engage in their own development; it also creates expectations. Staying silent avoids the expectation and risks losing the person to an employer who was more forthcoming. A workable middle ground: tell people the organization is investing in their development toward larger roles, be specific about the development, and avoid promising a particular job or date.

7. Review on a schedule

Revisit the plan at least once a year and whenever a critical role turns over, the strategy changes, or a successor leaves. Fold the review into the annual planning cycle so it is funded and scheduled; the HR strategic plan template in this series includes a section for it.

A Successor Profile Template

The names and facts below are fictional and for illustration only.

One page per critical role is enough. If the profile needs more, it is probably recording opinions rather than evidence.

Measuring Whether Succession Planning Works

Report outcomes, not the existence of the plan. Useful measures, with example numbers:

• Bench strength = critical roles with at least one ready-now successor ÷ total critical roles × 100. Example: 9 of 20 critical roles have a ready-now successor, so bench strength is 45%.
• Internal fill rate for critical roles = critical-role vacancies filled internally ÷ total critical-role vacancies filled × 100.
• Successor retention = identified successors still employed after 12 months ÷ successors identified at the start of the period × 100. For context, see Employee Retention Strategies for HR Leaders.
• Development plan completion = planned development actions completed on schedule ÷ actions planned × 100.
• Roles with a single point of failure: a simple count of critical roles with no successor at any readiness level.

There is no universal benchmark for these, and published figures vary widely by industry and by how "critical role" is defined. Track your own trend. These measures fit naturally on the people-capability section of the scorecard described in HR dashboards and scorecards.

Legal Cautions

Succession decisions are employment decisions. Selection for development programs, stretch assignments, and promotion is covered by the same anti-discrimination laws as hiring. A few practical points, stated generally; consult counsel for your situation and state.

• Age. The EEOC explains that the Age Discrimination in Employment Act forbids age discrimination against people 40 or older in any aspect of employment, including promotions, job assignments, and training. Do not exclude someone from a successor pool because of age or an assumption about how long they will stay, and do not label older incumbents as flight risks on that basis alone.
• Retirement questions. Planning for a vacancy requires some idea of timing, which makes this area sensitive. It is generally safer to ask all employees in a role category about their career plans in a neutral, voluntary way than to press individual older workers about retirement. Consult employment counsel on the approach; state law may differ.
• Subjective criteria. "Potential," "executive presence," and "fit" invite bias when undefined. Tie each rating to documented, job-related evidence.
• Who gets nominated. If the successor pool looks markedly different from the eligible population, find out why before anyone outside the company asks. A periodic adverse impact review of nominations is prudent; consult counsel about method and privilege considerations.
• Leave and disability. Do not lower a readiness rating because someone took protected leave or has a medical condition.
• Promises. Avoid written or verbal statements that could be read as a guarantee of a future position.

Common Mistakes

• Treating the plan as an annual form rather than a development program.
• Naming one successor per role, who then leaves.
• Naming the same strong person as successor for four roles.
• Planning only for executives.
• Cloning the incumbent instead of preparing for where the role is going.
• Keeping the plan so confidential that the successors never receive any development.
• Leaving out the CEO and the HR leader's own role.

Frequently Asked Questions

The Bottom Line

Succession planning works when it is narrow, evidence-based, and tied to development. Pick the roles that would hurt most to lose, define what success in them requires, assess people against that definition with documented reasons, and then spend most of your effort on closing the gaps. A list of names with no development behind it will be out of date before the first vacancy.

Getting leaders to fund and participate in the process is its own skill; see our article on presenting an HR business case to executives. The Strategic HR Leadership Guide gathers the related planning and metrics articles, and unfamiliar terms are in the Glossary of Strategic Thinking Terms. If you want to practice the underlying skills with an instructor, the Strategic HR Leadership Certificate Program includes an exercise on evaluating an internal leadership development program, along with modules on strategic planning, aligning HR goals with business goals, and metrics. Its course page lists developing future leaders among the skills participants take back to work, and the program carries 12 SHRM and HRCI recertification credits.