This is the one crucial thing all leaders should do, and nearly half don’t

Whether you’re at the height of your career, nearing retirement or ready to take on an advanced role, a succession plan is vital to your professional and company’s well-being. For managers and
executives, the considerations are twofold: You need to think about not only who will step in when you move on or up, but also those who report to you. As an added benefit, you can make it easier for your employer to promote you if you’ve prepared a colleague to take the reins.

Research suggests a large percentage of senior managers don’t make succession planning a priority. In a Robert Half Management Resources survey, 48% of CFOs reported they have not identified a successor for their position. Even more concerning is that 63% of those at small companies (20 to 49 employees) don’t have someone ready to step into their role should they leave.

Succession-less CFOs’ rationale for not having a plan? Primarily, they don’t plan to leave their position soon. This is short-sighted.

Benefits of succession planning

Part of being a leader is planning for the unknown. Even if you don’t anticipate a change happening soon, you can’t assume other issues won’t arise. Whether it’s the lure of a dream job, an organizational change or a health problem, managers and executives need to be ready for the unexpected.

Preparing for future job vacancies isn’t the only reason to have a succession plan in place. Here are five others:

1. Fostering a culture of professional development through a clear focus on in-house progression, which improves staff retention

2. Encouraging a spirit of knowledge sharing and continuous improvement among staff members

3. Protecting against the loss of institutional knowledge

4. Reassuring workers and shareholders that the business will continue to run smoothly even after executives or other key employees depart

5. Paving the way to implement succession plans for all levels in the organization

Succession planning strategy

Ready to set up or refresh your succession plan? Follow these seven steps:

1. Start early. It takes time to identify successors, and then you must prepare them for the role. Don’t wait to take this important step in your company’s talent management strategy.

2. Update the organizational chart. You should know exactly where each person fits within the company. This gives you a road map for succession planning and a bird’s-eye view of where
potential future leaders currently are.

3. Collaborate with other managers. Develop a succession plan as a management team. Everyone will benefit from hearing different viewpoints and suggestions and learning about advancement candidates from other parts of the organization. There’s also the possibility to cross-train promising individuals and have them bridge two departments, such as finance and IT or marketing and business analysis.

4. Think creatively. The best person for the job isn’t always the most obvious one. Keep a lookout for promising workers with valuable soft skills and leadership traits, no matter where
they currently are on the organizational chart. Technical training can fill in knowledge gaps.

5. Nurture top performers. While every employee deserves upskilling, your future leaders should receive special attention. This path includes mentoring to enhance business acumen and
management abilities. Their training could also include a formal education component, such as working toward an industry certification or advanced degree.

6. Let them test the waters. Give promising individuals a chance to try out higher-level positions by having them take over some of your regular to-dos. This can include a project with
advanced responsibilities or a role overseeing an interdepartmental task force, for example.

When you go on vacation, invite your protégé to lead team meetings and handle requests from the company’s senior management. They get a taste of what their future could hold, and you get
a sense of whether they can handle leadership responsibilities.

7. Have a Plan B. Yes, you should come up with a backup plan in case the plan doesn’t work as expected, such as if the successor leaves the company or turns down the promotion. You could
groom several candidates for one leadership role, or work with a staffing firm that can provide highly skilled professionals on an interim or full-time basis.

A responsible leader not only understands that change is inevitable but also takes active measures to prepare for that future. Having a succession planning strategy is a big part of ensuring your company’s continued stability and prosperity.

Tim Hird is an executive vice president at Robert Half, the world’s first and largest specialized staffing firm. Founded in 1948, the company has more than 300 locations worldwide.