# How To Develop an Effective Succession Planning Process | Capterra > Learn how to develop an effective succession planning process to help your organization identify and hire high-potential employees for key job positions. Source: https://www.capterra.com/resources/succession-planning-process --- Employee EngagementHuman Resources # How To Develop an Effective Succession Planning Process To Retain and Engage Talent Written by: Katherine McDermott Katherine McDermottAuthor Katherine McDermott is a writer and marketer specializing in product marketing and B2B software and technology. She is a frequent contributor to trusted busi... [See bio & all articles](https://www.capterra.com/resources/author/kmcdermott/) Published November 28, 2023 8 min read Table of Contents - [Benefits of succession planning](#benefits-of-succession-planning) - [How to develop a successful succession planning process](#how-to-develop-a-successful-succession-planning-process) ## An effective succession planning process can help you attract and retain top talent, who can ensure business growth. Most small-and-midsize-business leaders feel frustrated when they have to hire new team members or have vacant job positions with no talent in the pipeline. As onboarding and training process of new employees can take months, having a succession planning process can save your time and resources. If you are a small business and HR leader concerned about a lack of employee engagement and high turnover, you should can curate an effective succession planning process to improve employee morale and engagement. A well-designed and executed process can help you to retain top talent. In this article, we’ll explain how to develop a successful succession planning process, how to make it transparent to improve the employee experience, the benefits of succession planning, and more. ## What is succession planning? Succession planning is the planning and management that ensures that when someone takes over an area of the business, the transition occurs smoothly and with little interruption to business operations. It prepares organizations for a change in leadership before it even happens. It ensures that recruitment pipelines are in place, so that top talent can take charge when needed. For small businesses, succession planning is extremely crucial as there is little opportunity for other team members to pick up the slack, and lost productivity can prove to be detrimental. As businesses expand, leaders may move on to other companies to meet personal career progression goals, unfortunately leave the existing team in a quandary. In such a situation, the existing team may not be able to function smoothly. The absence of a recruitment pipeline may imply negative consequences on the HR leaders. A search for the right team member could take multiple months, and it may take even longer for that person to fully ramp to 100% productivity. For a small business, a succession plan helps retain the top talent at the company. It gives employees an opportunity to prove their caliber and helps organizations improve diversity in the leadership roles. ## Benefits of succession planning Lack of employee engagement and increasing burnout often makes employees feel less valued at work. This creates a sense of disengagement with their current roles, encouraging them to look for a more fulfilling job elsewhere. Here are some benefits of succession planning to potentially solve these problems. ### 1\. Identifies future leaders Future leaders are most likely the top-performing employees within a company, so early identification of qualified individuals is important. When employees are identified early, leaders can help them nurture their skills and craft cordial relationships with their team. This will prepare the employees for individual career progression, and help the company fill talent gaps easily. ### 2\. Future-proofs your business Leaders and their team members may look for new opportunities due to multiple reasons. While change is inevitable, and succession planning can reduce the impact of these changes by making them less disruptive and detrimental. With an effective succession planning process, individuals can seamlessly move up into roles they’ve been nurtured for, and the overall business productivity can remain unaffected. ### 3\. Proactively addresses talent gaps Leaders can ask questions like, “What would we change about this role if the individual left today?” to quickly uncover talents and skills gaps within the organization. For example, if small business leaders choose a Head of Marketing with more advertising and demand generation experience, they might realize maybe that skill is lacking within the marketing department. With succession planning, they can plan for a future change and consider hiring a mid-level demand generation manager to ensure smooth operations . ### 4\. Improves employee engagement Succession planning shows employees that there is a path for further growth and development. This encourages them to perform better and seek new growth opportunities within the organization instead of looking elsewhere. Engaging talented employees will help companies to become more productive and save money, otherwise spent on recruiting and onboarding new employees. ### 5\. Attracts top talent High-caliber talent in every organization is keen to know if there are internal opportunities for growth as they care about promotions and moving up in their career.  Encouraging promotions is a powerful recruiting lever for your business. This can be a big differentiator when a candidate compares your business with the others at the time of recruitment. ### 6\. Saves on hiring costs It’s often significantly more expensive to hire from outside the organization than it is to promote from within. Not only is the salary most likely higher for an outside individual, but time and productivity are lost while the new employee onboards. Companies save money on hiring costs when they’re able to implement a successful succession plan that keeps top talent within the organization. ## How to develop a successful succession planning process There are three key components to creating a successful succession planning process. First, small business leaders must acknowledge that change is inevitable, and the best way to create and nurture a pipeline of diverse talent is to build networking and advocacy programs. Additionally, company-wide visibility is incredibly important as it allows everyone to explore their interests and stay engaged with the company. Here’s how you can develop a successful succession planning process. ###    Build a plan for change in the process Roles and responsibilities within a growing business continue to arise, adapt and shift as the company matures over time. Gartner’s research shows that almost 66% of HR leaders are struggling with talent shortages and turnover.[\[1\]](#sources) Without a succession planning process in place, top talent is put at risk, and employee engagement can drop. It’s critical to build in regular assessments. Engaging in adaptive succession planning helps maintain the pace of change and disruption. Leaders should think critically about roles and ask questions like, “If this person left today, what would we change about this job description?” Small business leaders and HR managers should regularly ask such questions and continue to evaluate and reevaluate their organization’s succession plans. For it to be fully effective, strong succession planning should be dynamic, fluid, and discussed in real time. ### 2\. Establish networking and advocacy programs to ensure equitable succession planning Succession planning also offers the opportunity to engage and retain existing top talent. With the opportunity to create and nurture a pipeline of diverse talent, companies not only save time and money by hiring internally but also boost employee morale and engagement. To incorporate diversity into top leadership levels, executives must know about the diverse, talented individuals within their company. As remote or hybrid work schedules or different team structures might prevent senior leadership from having an extremely close eye on top-performing employees, it’s important that team members are given adequate opportunities to advocate for themselves. Also, employees must know that they can be considered for vacant job roles, and they should enhance their skills to grab the right opportunity when it comes ahead of them. ### 3\. Make the process transparent to improve the employee experience Most employees want to grow and flourish within their existing company. When team members believe they have a chance to further their career and goals at the organization, they are less likely to look for a new job. They are more likely to stay engaged in their current role, work productively, participate in work culture events, and eventually put their candidacy forward for a new position. This is why it’s incredibly important for the succession planning process to be visible and transparent across all levels of the organization. To maximize retention and retain high-caliber talent, managers should be having career aspiration and growth discussions regularly with team members. Succession planning should align with the employee’s overall goals, but only 29% of HR leaders share with successors how the process actually works.[\[1\]](#sources) On the flip side, when employees believe there is no room for further growth, they tend to start looking for a new job elsewhere. Their productivity and efficiency levels are likely to drop, and their overall engagement can fall as well. ## Create a strong succession planning process For small businesses focusing on growth, having a go-to pipeline of top talent is critical. Succession planning is an important strategy to encourage and support promotions within a company. It helps maintain productivity while also retaining and engaging top talent. The formal succession plan crafted by small business leaders and HR managers should be visible and advocated for throughout the organization. Leadership should keep close tabs on diverse candidates with high potential within the organization, and should help employees put their candidacy forward in an easily accessible way. Succession planning is just one piece of the puzzle in improving employee engagement and maximizing retention, but it’s an important component in making employees feel valued and engaged. It helps businesses future-proof their organization, proactively address talent gaps, increase employee engagement, and save money when it comes to hiring costs. **Check out these resources for more information on optimal talent management:** - [What is Workforce Planning? Examples and Tips for Small Businesses](https://www.capterra.com/resources/examples-of-workforce-planning/#) - [Retain Talent and Reduce Turnover With Career Pathing](https://www.capterra.com/resources/what-is-career-pathing/) - [Employee Engagement Software Directory](https://www.capterra.com/employee-engagement-software/) ## Capterra's 2026 Software Buying Trends Report ### Download our 2026 Software Buying Trends Report to see how successful software adopters avoid disappointment and how your business can, too. * * * Sources 1. [Strategies to Improve Succession in a High-Disruption Environment](https://www.gartner.com/en/documents/4308499), Gartner * * * ### Was this article helpful? * * * ## About the Author [### Katherine McDermott](https://www.capterra.com/resources/author/kmcdermott/) Katherine McDermott is a writer and marketer specializing in product marketing and B2B software and technology. 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