Succession planning is essential for businesses to tap their internal talent pool, and avoid the risk and expense of external hiring. Using the talent pool approach, you can drive your succession planning strategy with the much needed flexibility as your business grows, changes, and develops.
A study conducted by the Corporate Leadership Council found that 72% of companies predicted they would have an increase in leadership vacancies, while 76% were not as confident in their abilities to adequately fill these positions.
Does this sound familiar?
In our previous article, we discussed the importance of talent pools and the best practices for building one. Now that you know how to build an effective talent pool, did you know that you can integrate it into your succession planning strategies?
Ask yourself this – when a position becomes vacant, do you find yourself scrambling to evaluate potential internal talent or do you immediately source externally for candidates? What if the right candidate has been there all along and came fully equipped with all that the position required? Imagine how ideal a situation would be when a position becomes vacant, and you have a ready pipeline of talented and potential leaders ready to step in at a moment’s notice!
This is where talent pools and succession planning come into play. In our article today, we will explore the talent pool approach to succession planning and how to create one that is aligned with your succession planning strategies.
What is Talent Pool-Based Succession Planning?
Finding the right talent to fill mission-critical roles is becoming more challenging across industries as unemployment rates continue to rise. As a result, organisations are focusing on developing their internal talent through succession planning.
One way to achieve this is to build a talent pool that consists of a group of high-performing employees with the potential to lead the business and develop their skills to assume greater responsibilities. Talent pools complement succession planning strategies because:
- They provide the much needed flexibility in fast-moving industries
- They allow organisations to develop talent in areas that match critical competencies and cultural values
To evaluate the capabilities of the existing talent pool, you need to define an ideal set of behaviours and traits for their critical roles. This can be facilitated through the development of a competency framework which outlines the skills needed to meet the objectives of each role.
Once the talent pool is identified, the competencies of individuals can be rated based on what the organisation requires for future positions, such as:
- Formal training
- Career pathing
- Mentoring programs
This will allow you to improve employee engagement and loyalty, and ensure that talent is in place to fill critical roles and future skills gaps.
Why are Talent Pools Important for Effective Succession Planning?
Succession planning approaches that rely heavily on traditional org-chart replacement methods tend to be narrow in scope and time-consuming.
An ageing workforce and a shortage of skilled workers can cause many organisations to struggle with their source of talent. Some even confuse replacement planning with true succession planning, where the focus lies on people development with the goal of building overall bench strength.
This brings us to the talent pool approach for succession planning. This approach is seen as a best practice to establish a larger number of employees for promotion – employees who are likely to stay loyal and have skills that are best aligned with the organisation’s strategic business plans. The talent pool approach has a couple of benefits such as:
- External hiring may be effective in bringing new ideas, but can run the risk of not delivering what a succession planning process is designed to provide – continuity.
- The alternative of developing talents who are capable of leading change in the near- and medium-term future within an organisation’s current team of employees.
Achieving these objectives involves the careful management of your talent pool. A talent pool can be filled with internal and external candidates. It is best to fill it first with internal candidates to boost retention. Internal candidates also require less training, thus reducing the costs of recruiting and training. You can then pull in external talent when a talent gap is identified within the organisation.
Using Talent Pools to Support Succession Planning
When we think about succession plans, it is often brought up when the executive and senior leaders are leaving and causing a vulnerability in the company’s foundation. But any role that is left vacant can also create a crack in the foundation. It might not be a big one but it is still a crack that will get bigger until the position is filled.
A Blueprint by McLean & Company
According to James Alexander, Senior VP, Client Success at Info-Tech Research Group, “The leadership environment has changed, and succession planning must change with it. While succession planning is characterised by long-term commitment, business no longer is.”
The blueprint, Use Talent Pools to Support Flexibility in Succession Planning, by McLean & Company reinforced this by revealing that “talent pools are a source of potential successors for a specific role group that consists of more than two individuals”.
The blueprint also showed that the grouping of critical roles in a talent pool requires comparable competencies, such as knowledge, skills, and attributes, called a role group. Simply put, role groups can share a talent pool of potential successors who may be viable candidates for any of the roles within the group.
Mardi Walker, the executive counsellor at McLean & Company, believed that with the ongoing uncertainty and challenges in the present labour market and economic conditions, it is all the more important for organisations to have talent pools in place.
According to the blueprint, organisations can efficiently plan for succession by ensuring that the approach prevails in the rapid changes of the workplace and business environment. Using talent pools and role groups can help to broaden the opportunities for internal career mobility and improves retention.
The company’s research also explained how talent pools add flexibility to succession planning with the following benefits:
- A database of qualified candidates
- A better candidate experience
- Improved diversity, eq unity, and inclusion
- Reduced time to hire
- Decreased cost per hire
- Access to potential passive candidates
6 Best Practices for Building a Succession Planning Talent Pool
Developing a strong and diverse talent pool takes a long-term commitment. Here are six best practices to help you position your talent pool as a useful tool for succession planning, and identify potential successors across your organisation.
1. Continually forecast your succession planning needs
Succession planning is about developing talent for the near future. Therefore, it is wise to regularly forecast the future needs of your organisation and work out what competencies and traits are required for a potential leader.
To develop a solid plan, start by thinking about your business strategy, the evolving capabilities your organisation may have, and the competitive landscape in that you operate. Will the market or the customer’s needs change? Will there be a requirement for a new set of skills?
You will also need to stay on top of the trends in your industry and be seen as progressive. For instance, you may want to consider how flexible working arrangements, paid time off, and proper onboarding can influence your succession planning model. Include these in your planning and in the training to prepare your team members for leading change in the future.
2. Work on your skills gap analysis
Your succession planning strategies should be based on the gap between the candidates you currently have and what they will need to fill the shoes of the current leaders who have stepped aside. Consider these details around:
- What roles do you need for leadership now and in the future?
- Who is in your current talent pool?
- What qualities, skills, and experiences will they need to be effective leaders?
- What training and development programs will you need to develop this pool of leaders?
- How will you consistently engage these potential leaders so they don’t leave to pursue other opportunities in other organisations?
Identifying these skills gaps and competencies can help with the learning and development of your talent pool members. Remember to include feedback from the career pathing evaluation and performance reviews.
3. Promote diversity in your talent pool
The stronger and more diverse your talent pool is, the greater your chance of finding the right candidate when you need them. Research has shown that diversity is achieved through careful planning and actions that were taken to make things happen.
Cultural and ethnic diversity is also known to alter the behaviour of a group which leads towards improved and more accurate collective thinking. Furthermore, diversity in terms of the range of experiences, both within and outside of the organisation of related industries, can lead to innovation within the company’s processes.
4. Take advantage of technology and digital tools
The right technology and digital tools can help you to manage your talent pool by keeping track of all your potential successors. These work by creating profiles of the candidates’ records, interview notes, skills and capabilities, as well as weaknesses and completed training. You should apply these to your entire talent management strategy for maximum benefit, and not just your succession planning strategies.
Taking advantage of the technology enables you to efficiently manage data as well as streamline the hiring process. Cloud-based subscription systems prevent you from becoming a slave to documentation and give you room for real-time reviewing and updating of records.
5. Create a talent development community
Your objective should move beyond preparing a single future leader. Rather, it should encompass the creation of a community of future leaders to draw from. Think of your talent pool and succession planning process as building a group of people to lead your business forward.
For external talent pools, create a communal online platform or social media hub to bring all the potential candidates together. This will not only give your candidates a window into your organisation but it will also allow you to promote its culture. It also encourages the talent pool members to learn from each other and keeps them engaged in what your organisation is building.
6. Review your progress and adjust accordingly
An integral part of your succession planning strategy should always include a review and an adjustment of your progress. Your talent pools should be monitored closely and your employees evaluated on a regular basis, including a review of the current skills shortages to ensure your goals can still be met if a key employee leaves the organisation.
If necessary, create training programs. These can help to support your employees in attaining the skills needed for critical roles. The training programs can include internal or external training, as well as management coaching and peer feedback. Mentoring can also help to coach key staff and bring with it the added bonus of improving employee engagement.
Implementing effective succession planning requires long-term organisational change, a deep talent pool, and a commitment to a strategic view of how to meet talent needs. It can be established using best practices and if done correctly, you will benefit from the competitive edge that a talent pool approach can deliver. To learn more about succession planning, visit our Succession Planning page. To view webinars and other content, check out our Events page.