Succession planning at lower levels: How important is it?

Succession planning is a critical aspect of talent management that focuses on identifying and developing future leaders within an organisation. Traditionally, succession planning has primarily been associated with top-level executives and key leadership positions. However, the dynamic business landscape and the need for a sustainable workforce have brought attention to the significance of succession planning at lower levels.

Benefits of succession planning

“Succession planning for lower-level employees is crucial for organisations to ensure a continuous talent pool and maintain a smooth workflow. While this may not have been a common practice in the past, it is becoming increasingly important for organisations, especially in the knowledge and consulting sectors,” says Emmanuel David, senior HR leader.

Knowledge preservation: Talking about benefits,  Thabitha David, CHRO, Sterling Holiday Resorts,  shares, “One of the primary benefits of succession planning is the preservation of knowledge and expertise within the organisation.” Every employee contributes in their own way, and their absence can significantly impact the value chain and delivery of services. With a well-defined succession plan, organisations can mitigate the risk of losing critical skills and knowledge.”

Business continuity

Implementing succession planning at the lower levels  ensures business continuity. Organisations rely heavily on the contributions of their employees at all levels to achieve their goals and objectives.

“Succession planning for lower-level employees is crucial for organisations to ensure a continuous talent pool and maintain a smooth workflow. While this may not have been a common practice in the past, it is becoming increasingly important for organisations”

Emmanuel David, senior HR leader

Succession planning at lower levels helps build a talent pipeline that can step into key positions seamlessly, ensuring a smooth transition and minimising disruptions to operations.

Speaking from the perspective of an HR head, Gautam Srivastava, VP and head of HR at The Leela Palaces, Hotels, and Resorts, admits that it is crucial to address the high attrition rates experienced post-pandemic and the intense competition for talent across industries, particularly in the service and food sectors. The talent shortage in the market has resulted in more job opportunities than qualified candidates.

“To tackle this challenge, it is essential to establish a talent pipeline starting from the entry-level positions. Building a succession plan that identifies and develops individuals at the bottom rung and first-time managers is vital to ensure business continuity,”

To attract fresh talent from external sources, collaboration with colleges and talent pools is necessary. This investment in their development fosters loyalty to the company and benefits the overall workforce in the long run.

Retention of institutional knowledge and experience

Employees at lower levels possess valuable institutional knowledge and experience specific to their roles and responsibilities. When these employees leave the organisation, their knowledge and expertise leave with them, creating a knowledge gap.

Development & engagement: Succession planning at lower levels provides employees with a clear path for growth and development within the organisation. It sends a strong message that the organisation values and invests in its employees, promoting a sense of loyalty, engagement and motivation. Employees who see opportunities for advancement are more likely to stay with the organisation, reducing turnover rates and associated costs.

“Building a succession plan that identifies and develops individuals at the bottom rung and first-time managers is vital to ensure business continuity”

Gautam Srivastava, VP and head of HR at The Leela Palaces, Hotels, and Resorts

Employee morale & commitment

When employees see that the organisation invests in their development and provides a clear roadmap for their career progression, it boosts their morale and commitment. Succession planning at lower levels demonstrates that the organisation recognises and rewards high-performing individuals, and fosters a positive work environment.

Cost savings and increased efficiency

Succession planning at lower levels can yield significant cost savings for organisations. By identifying and developing internal talent, organisations reduce the need for external recruitment and associated expenses, such as advertising, interviewing and onboarding. Additionally, promoting from within enables a shorter learning curve, as successors are already familiar with the organisation’s culture, processes and systems.

In agreement, Srivastava adds, “In terms of cost savings, implementing succession planning at lower levels can be highly advantageous. The cost associated with losing an employee is approximately eight times their annual salary, including both tangible and intangible costs. Many employees leave due to internal processes and policies related to compensation and promotion.”

According to Srivastava, organisations can address this by customising career paths based on individual capabilities and providing growth opportunities within six to eight months rather than waiting for two or more years. By eliminating rigid structures and embracing flexibility, organisations can retain top talent, prevent knowledge and experience loss, and reduce hiring and training costs.

Is succession planning practical?

Thabitha David believes that having cross-skilled and fungible employees at lower levels is preferable, as it eliminates the need for succession planning for lower-level positions.

“Cross-skilling serves as a buffer against attrition and brings simplicity to the system, although managing a large number of employees can be time-consuming. Succession planning becomes more critical at higher levels, where job descriptions are unique and specific”

Thabitha David, CHRO, Sterling Holiday Resorts

“Cross-skilling and maintaining balance within shifts can be achieved by ensuring multiple employees possess the necessary skills and knowledge. Cross-skilling serves as a buffer against attrition and brings simplicity to the system, although managing a large number of employees can be time-consuming. Succession planning becomes more critical at higher levels, where job descriptions are unique and specific,” explains Thabitha David.

She suggests that for lower-level positions with a high enrolment percentage, succession planning may not be practical due to the limited pool of suitable candidates. Upskilling and cross-skilling are vital for lower-level roles, as skills are easier to train and maintain at the senior level.

E. David points out that there are potential risks and challenges associated with implementing sufficient succession planning for lower-level employees.

One challenge is the risk of employees developing a sense of entitlement or overestimating their competency, which can hinder their growth and learning. This can be addressed through effective communication and performance management practices.

E. David expresses that without a proper plan in place, leadership may struggle to respond to changing circumstances, leading to reputational damage and difficulties in adapting to business fluctuations.

Most HR leaders feel that succession planning at lower levels is no longer a luxury. It has become a necessity for organisations seeking to build a sustainable workforce. Ultimately, succession planning at lower levels lays the foundation for long-term success and strengthens the organisation’s competitive advantage in a rapidly evolving business landscape.