When experienced employees leave, they often take years of knowledge, relationships, and decision-making experience with them. That can leave businesses struggling to fill important roles, maintain productivity, and keep teams moving in the right direction.
The challenge grows even when no one knows who could step into those roles next. Rushed hiring decisions and sudden leadership gaps can affect both employees and day-to-day operations.
This blog explains how to create a succession plan, what a strong plan should include, and how businesses can prepare people for important roles so transitions are smoother and less disruptive.
What is Succession Planning?
Succession planning is the ongoing process of preparing employees to step into important roles before those positions become vacant.
Unlike regular hiring, succession planning starts well before a vacancy appears, giving potential successors time to build the skills and experience they need.
The Small Business Administration also includes succession planning as part of broader business exit planning.
It takes a longer-term approach by developing talent in advance, reducing disruption & helping the organization stay prepared for future changes.
The Fundamentals of Succession Planning
These fundamentals create a strong foundation for succession planning and help ensure the process stays practical, focused, and effective over time.
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Fundamental |
What It Means |
|---|---|
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Get Leadership Buy-In |
Senior leaders should support the succession planning process from the start and stay involved as priorities and talent needs change. |
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Build a Company-Specific Plan |
Create a plan based on the company’s structure, goals, workforce, and future needs, rather than copying another organization’s approach. |
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Focus on Critical Roles |
Identify positions where a vacancy could disrupt operations, weaken leadership, or create a major knowledge gap. |
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Review the Plan Regularly |
Revisit the plan at least once a year and update key roles, potential successors, and development needs as the business evolves. |
How to Create a Succession Plan
Building a succession plan takes six steps: find key roles, spell out what each role needs, size up possible successors, build a growth plan for each one, then check it on a set date. Each step builds on the one before it.
1. Identify Key Roles
Start by listing jobs where a sudden gap would stop work or put revenue at risk.
Don’t just list titles at the top of the chart. A shift supervisor, a lead engineer, or one worker with a rare license can matter as much as a vice president. Rank the list by impact. Then spend the rest of the plan on the roles at the top.
2. Define the Skills Each Role Needs
For each key role, write down the exact skills, know-how, and ties the job needs.
Don’t pull a generic list from a job post. Ask the person now in the role. They know which parts of the job never make it into the write-up. This list becomes the yardstick for judging each possible successor later.
3. Identify and Assess Possible Successors
Name two or three people for each key role. Look inside the company first.
Compare each one against the skills list from the step above, and write down the exact gaps, not just a general score. Some people will be ready in months. Others may need a few years, and you should write down that timeline, not guess at it.
4. Build Growth Plans for Each Successor
Turn each gap into action: a stretch project, a mentor, a course, or time spent watching the current role holder work.
SHRM’s own succession template ties each growth plan to a set date and a named person to check progress. That keeps the plan from stalling once the initial interest fades.
5. Document and Share the Plan
Put the plan in writing. List who’s covered, the timeline, and what happens if someone leaves sooner than planned. Share it with the top team and, where it fits, with the successors themselves.
A plan no one knows about helps no one on the day it’s needed. Keep a copy with HR, and one with legal counsel if the plan involves ownership transfer.
6. Review and Update the Plan Often
Pick a fixed date, once or twice a year, to look at the plan again. Roles change, people leave, and needs shift. A list built two years ago may no longer fit the business.
Treat the review like any other task on the calendar. Don’t wait for a resignation letter to show up first.
Best Practices For Succession Planning
These best practices can help businesses build a succession plan that stays effective, flexible, and aligned with future leadership and workforce needs.
- Start Planning Early: Begin succession planning three to five years before an expected leadership change to allow enough time for development and preparation.
- Identify Multiple Successors: Consider more than one potential successor for each critical role in case the preferred candidate leaves or declines the position.
- Assess Readiness Fairly: Evaluate employees based on their skills, performance, experience, and development gaps rather than simply their seniority.
- Keep a Long-Term Focus: Separate succession discussions from regular performance reviews so the focus remains on future roles and readiness.
- Review the Plan Regularly: Treat succession planning as an ongoing process and update the plan as employees, roles, and business needs change.
The Bottom Line
A succession plan only works if it gets used, not just written. Start with the roles that would hurt the most to lose. Match each one to real people already on staff, and give them a clear path to get ready.
Check the plan every year so it keeps up with the business instead of falling behind it. If you’re not sure where to start, pick one key role this week, name a possible successor, and write down what they’d need to learn before day one.
That’s a succession plan in progress, not just an idea.
Frequently Asked Questions
Is Succession Planning only for Large Businesses?
No, Small businesses also benefit, especially when key employees hold critical knowledge or responsibilities.
Should Employees Know They Are Potential Successors?
Sometimes. Transparency can support development, but companies should avoid guaranteeing future promotions.
Can Succession Planning Improve Retention?
Yes. Clear growth opportunities can encourage employees to stay longer.
Who Manages Succession Planning?
Usually HR, senior leaders, and department managers share responsibility.
