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Succession planning is a key strategy for any organisation that aims to ensure sustainable, long-term success. While traditionally seen as a tool for larger organisations or those looking to replace C-suite executives, its benefits are equally powerful for smaller organisations and extend far beyond top-tier roles. This blog explores the core benefits of succession planning, its impact on various organisational levels, and why it’s critical for companies of all sizes to invest in this strategic process.
What is Succession Planning and Why is it Important for Organisations?
Succession planning is a strategic process where organisations identify and develop employees from within their workforce to step into key roles in the future. In a world of rapid, far-reaching change, effective succession planning goes beyond preparing for the retirement or departure of senior executives; it focuses on building an organisation-wide talent pipeline, ensuring employees have the necessary skills to support organisational priorities and remain fully engaged in their work.
Succession planning is essential because it helps businesses stay ready for leadership transitions, retain top talent, and reduces the risk of being unprepared to meet current and future skills needs. By proactively nurturing internal talent, companies can position themselves to tackle future challenges and continue to thrive without disruption. This approach expands traditional succession planning into a more comprehensive and inclusive talent management process.
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Developing a Business Case for Succession Planning
Benefits of Succession Planning
In this blog, we outline the key benefits of succession planning, with a focus on a broader and more inclusive talent management approach, to help you build a business case for either establishing or strengthening your current strategy. The benefits cover various perspectives, so it’s important to select the arguments that will most resonate with your organisation’s senior leadership team, as their support will be crucial in making talent management successful within your organisation. Understanding the key drivers and concerns of your top team will also help you shape the conversation around succession planning effectively.
If you want to dive deeper into what succession planning entails and how to implement it effectively, read our detailed blog: Succession Planning: A Comprehensive Guide to Securing Your Company’s Future.
1. Enhances Business Continuity and Stability
One of the most significant benefits of succession planning is that it safeguards business continuity. Every organisation faces inevitable turnover, whether due to retirement, resignations, or internal moves.
Sudden resignations or retirements without a ready successor threaten business continuity by causing a loss of critical knowledge and skills, leading to inefficiencies and gaps in decision-making. Operational disruptions often follow as remaining team members absorb additional responsibilities, which can increase stress and lead to further turnover. This strain can impact customer relationships and damage the organisation’s reputation, while delaying strategic initiatives and escalating recruitment costs to quickly replace the role.
With a strong succession planning approach in place, companies can avoid such disruptions. Instead of scrambling to find a replacement, there are already previously identified, prepared candidates ready to step into a vacant role which helps to maintain operations seamlessly.
Key takeaway: By identifying and developing internal talent, companies can reduce downtime, and ensure smooth transitions, mitigating the risk of losing key talent suddenly.
Supporting statistics:
Succession planning ensures organisational stability and growth by proactively developing future leaders, maintaining leadership continuity, and mitigating risks from sudden leadership changes, fostering a culture of growth and long-term success.
When to use:
In organisations recently affected by instability from widespread change or sudden leadership turnover
Where there is a shortage of readily available talent for key roles
When the senior team is concerned with continuity, stability, or reputation amidst frequent leadership transitions
For more insight on ensuring business stability through succession planning, read our detailed blog: Succession Planning as a Path to Retention Success Beyond the C-Suite.
2. Reduces Recruitment Costs and Increases Likelihood of Success
Building on the previous point, unexpected departures without successors in place not only cause disruption but also often require fast external recruitment. Recruitment can be costly, especially when it involves sourcing specialist or senior-level replacements. By implementing a succession plan, organisations can tap into their internal talent pool to fill key roles.
With targeted development support, employees with the interest and potential to step up can be prepared to take on new roles as the need arises, reducing reliance on urgent external hiring, which can be both time-consuming and expensive.
Internal candidates also benefit the organisation by requiring shorter onboarding periods, as they are already familiar with the company’s culture, operations, and expectations. This allows the organisation to maintain momentum without the delays typically associated with external hires adjusting to a new environment. Finally, it lowers the risk of a new hire failing in the role due to a lack of organisational fit or delays in expected performance from adapting to an unfamiliar setting.
Key takeaway: Succession planning can significantly reduce recruitment costs, shorten hiring timelines, and ensure better role fit by leveraging internal talent.
Supporting statistics:
Research indicates that internal hiring can reduce recruitment time by up to 20 days, highlighting the efficiency of promoting from within.
A study by Deloitte revealed that companies with structured succession plans experience 40% less turnover at senior levels and report a 20% faster time-to-fill for leadership roles, ultimately reducing the costs and operational downtime linked to external hiring.
When to use:
In organisations with high recruitment costs or lengthy hiring processes
Where the senior team values cost savings and operational efficiency
In environments where organisational fit and quick onboarding are essential
Discover how to future-proof your workforce—download our Business Case present on our website!
3. Strengthens Talent Retention and Engagement
Succession planning is closely tied to talent retention. Employees are more likely to stay loyal and engaged when they see a clear path for career progression within their organisation. Providing opportunities for personal and professional growth is a powerful motivator. Succession planning also encourages open conversations about employees' long-term career goals, ensuring they feel valued and see a future within the company.
While smaller organisations with fewer people may feel they know all their talent well, this doesn’t reduce the importance of career conversations and succession planning. Managers may believe they understand their team’s ambitions but are less likely to have real insight into mid- and long-term career goals without dedicated career and talent conversations. Additionally, smaller organisations may have fewer opportunities for formal promotions or career moves, making it even more essential to identify development and career-enhancing opportunities proactively. Sideways moves, additional stretch tasks, or task force participation can be instrumental in developing employees for their next role, even if that role lies further into the future.
This structured approach not only retains high-potential employees but also nurtures a culture of development and continuous learning.
Key takeaway: Succession planning is crucial for organisations of all sizes, including smaller ones where promotion paths may be less formal. Actively engaging in succession planning enables organisations to create growth opportunities through sideways moves, stretch tasks, and task forces, which support talent retention, prepare employees for future roles, and foster a culture of development, engagement, and continuous learning.
Supporting statistics:
According to the 2023-2024 SHRM State of the Workplace report, 81% of organisations identified maintaining employee morale and engagement as a top priority, highlighting the critical role of development opportunities in retention strategies. SHRM
Research from McKinsey indicates that organisations with effective succession planning are more likely to outperform their peers, underscoring the link between employee development and organisational success. McKinsey & Company
When to use:
In organisations experiencing high employee turnover or low engagement levels
Where the senior team is focused on retaining top talent and fostering a committed workforce
In smaller organisations with limited formal promotion paths, necessitating proactive development strategies
Explore how organisations can use succession planning to enhance talent retention and employee engagement in our blog: The Secret Sauce of Succession Planning.
4. Develop a Strong Leadership Pipeline
While we advocate that succession planning should become an inclusive, organisation-wide talent management process, succession planning is of course also vital for securing a strong leadership pipeline. It extends beyond merely replacing outgoing leaders; it's about cultivating a sustainable leadership pipeline. By identifying and developing future leaders early, organisations ensure a steady flow of qualified individuals ready to assume leadership roles as needed.
Internally developed leaders reinforce the company’s culture, values, and vision, fostering consistency in team operations and interactions. This approach strengthens organisational culture, as new leaders uphold established principles. Additionally, leaders nurtured from within possess deeper insights into the company’s needs and are often more responsive to change. Early development of future leaders encourages adaptability and innovative thinking, equipping them to address the unique challenges facing the business. This agility is especially crucial for smaller, fast-growing organisations.
As organisations scale, having a ready pool of future leaders ensures sustainable growth. Early development enables these leaders to step confidently into new roles, supporting expansion without compromising quality or efficiency.
Key takeaway: A well-executed succession plan provides organisations with a robust leadership pipeline that supports long-term growth and organisational resilience.
Supporting statistics:
SHRM reports that companies prioritising internal leadership development experience up to 50% lower turnover among high-potential employees, emphasising the role of succession planning in retention and pipeline sustainability.
When to use:
In organisations focused on growth or expansion
Where leadership continuity and culture reinforcement are priorities
In fast-paced industries needing adaptable, innovation-driven leaders
Learn how to develop future leaders through experiential development and key experiences in our Handbook: 9 Key Experiences to Develop Future-ready Leaders
5. Fosters Employee Development and Learning
Succession planning is closely tied to employee development. By actively evaluating employees' potential and performance, organisations can create tailored development plans to bridge skill gaps and prepare individuals for future roles. This deliberate focus on growth fosters a culture of continuous learning and adaptability.
Linking career and development conversations to organisational talent management or succession planning ensures these discussions aren’t seen as optional but as essential components of the organisational process. This integration makes the data visible at the senior leadership level, adding weight to these conversations—particularly when the top team values succession planning and demonstrates support by reviewing data, acting on organisation-wide development needs, and providing personal development opportunities for emerging leaders through stretch assignments or mentoring by senior leaders.
At the heart of succession planning is the recognition that development is dynamic. Whether employees are moving from individual contributor roles to management or from functional leadership to broader business leadership, they are given opportunities and support to grow. Succession planning ensures that this support extends beyond a single supportive line manager, with the organisation as a whole providing the necessary resources to enable meaningful development.
Key takeaway: Succession planning promotes a culture of development and growth by equipping employees with the skills and experiences needed for career advancement.
Supporting statistics:
According to the 2023-2024 SHRM State of the Workplace report, 53% of organisations have identified upskilling or reskilling the current workforce as a top priority, highlighting the emphasis on employee development.
When to use:
In organisations focused on enhancing employee engagement and retention
Where the senior team values a skilled, adaptable workforce
In fast-changing industries that require agile, well-prepared leaders
Discover how high-impact development programmes can develop employees at key career stages in our guide: High-Impact Development Programmes: From Early Careers to Senior Leaders
6. Improves Organisational Agility and Innovation
This last point takes us full circle back to the first benefit for succession planning: ensuring business stability and continuity. Within a stable organisation, however, there needs to be agility and innovation, too. The more stable an organisation is, the more attention can be paid to innovation.
And robust succession planning can further enhance an organisation's agility and capacity for innovation. By nurturing employees and providing them with diverse experiences, organisations cultivate fresh perspectives and creative solutions to business challenges. Effective succession planning ensures that leadership transitions are seamless and infuse new energy and ideas into key roles.
Continuous talent development and exposing high-potential employees to various facets of the business foster a culture of innovation. Employees become better equipped to think critically and act decisively when confronted with change or uncertainty.
Key takeaway: Succession planning enhances organisational agility by ensuring that employees at all levels are prepared to lead and innovate.
Supporting statistics:
A McKinsey study found that organisations with effective succession planning are 1.5 times more likely to outperform their peers, highlighting the link between leadership development and organisational agility. AB Academies
Research published in the Journal of Management indicates that companies prioritising leadership development through succession planning experience a 22% increase in organisational innovation.
When to use:
In industries undergoing rapid change or facing disruptive market forces
Where the senior team prioritises adaptability and responsiveness to market dynamics
In organisations aiming to foster a culture of continuous improvement and innovation
Succession planning offers numerous benefits that contribute to both short-term operational success and long-term organisational growth. From enhancing business continuity to fostering employee engagement and innovation, its impact can be transformative for companies of all sizes. By investing in the development of internal talent, organisations can secure their future while retaining their best employees and maintaining a competitive advantage.
For more detailed insights and practical advice, download our Succession Planning Handbook, or explore our other informative blogs on succession planning and talent development.
For more inspiration to see how other organisations have developed and rolled out inclusive, intuitive, yet highly effective succession planning processes, read our case studies about Informa and Chugai Pharma.
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