4 Signs Your Business Should Be Using Succession Management Software

How to Know Whether You Need Succession Management Software

Succession management is the systematic process of building a pipeline of talent that is ready at a moment's notice to step up to the mantle when an organizational need arises. Whether driven by position vacancies, organizational re-structuring, or simply career development for staff, succession management is a future-oriented activity that should not be left to chance. Take the C-suite succession stories of business giants such as Wal-Mart, McDonalds, and General Electric (GE) for example; for each of these companies, succession management became a core competency of their respective businesses' performance strategies for quite different reasons. Wal-Mart faced succession management issues after financial improprieties forced a CEO resignation. McDonald's on the other hand had its bench strength tested through the rapid successive deaths of 2 CEOs in the early 2000s. And GE's former CEO Jack Welch developed an exhaustive list of CEO leadership qualities for his would-be successor years prior to his resignation—effectively launching a succession management campaign that GE has adopted for all levels of its company.

While each of these stories may have stemmed from a different business scenario, currently at the heart of each of these businesses' efforts though, is succession management software—an HR application which provides both the structural processes and technology automation to enable these businesses to build and maintain a cadre of world class talent. Of course for the abovementioned companies with 2.1M+, 385K+, and 305K+ respective employees, the business case for leveraging succession management technology is not a hard one to make. But, at what point should other businesses start looking into succession management software? When they reach 50, 500, or 5K+ employees? Or are there other elements that mark an organization's readiness for this HR planning application? While not easily pinned to a specific number, we believe there are actually several business performance signs that indicate a company may need to start using succession management software sooner rather than later.

Succession Management Software Sign # 1: Turnover Trouble

Employee turnover as a performance metric reflects a broad number of figures that pertain to employee attrition, including: voluntary (e.g. quitting); involuntary (e.g. terminating); planned (e.g. retiring); and un-planned (e.g. death) turnover. While not all employee turnover is bad for business, any level of attrition in critical areas (or high turnover in any area) can lead to significant organizational issues such as talent/skills gaps as well as sizeable incurred costs. Indeed, turnover (regardless of type) signifies a need for succession management software to help pinpoint the problem areas. While the steps to take for the succession management plan may be clear, each of the above-referenced turnover areas represents a separate data stream which must be parsed and maintained—a task that is all but impossible for middle to large organizations to conduct manually. Deploying succession planning software allows for data on potential turnover issues to be analyzed at a near real-time pace—an exceptionally important benefit from an organizational preparedness perspective.

Succession Management Software Sign # 2: Promoted Role Failures

Aside from potential talent shortages and the staggering costs associated with replacing any employee (even a bad one), companies should also remain cognizant of the organizational tendency to fill these gaps with ill-prepared internal employees. In fact, Harvard Business Review has shown that there is a 40%-60% failure rate for new managers during the first 18 months in a management role. Should data indicate a high failure rate in your promoted roles, then this can suggest that managerial selection, training, and development are inadequate. Cue succession planning technology. Because nearly all succession planning software vendors have built solutions based on best practices, not only will this type of HCM application provide data visibility, but organizations can also benefit from the technical tools to effectively achieve and improve upon succession management over time.

Succession Management Software Sign # 3: High External Position Filling

While no business can fully escape the need to hire externally for specific positions or certain scenarios, an inordinate amount of positions being filled from outside of the organization can suggest an under-developed talent pipeline. Given the fact that nearly one third of all U.S. companies are struggling to hire employees with the right skill-sets, this external fill strategy could be a real problem, and signify that it's time for succession technology to step in.

Leveraging succession management software can allow for a greater grasp on organizational bench strength, as well as internal staff competencies, capabilities, and proclivities—insight which can lead to drastic reductions in external hiring. For example, Novartis managed to reduce their company's external hiring dependency from 79% down to 16% as part of a succession planning software program and process. However, organizations should also be aware of what an externally-driven hiring strategy can unintentionally communicate to internal staff. That is to say that, if your employee satisfaction surveys are revealing a degree of dissatisfaction in your staff relating to the transparency and fairness of promotion within the business, there may be a problem with the way you identify, train, and develop high potential staff. Used correctly, succession planning software will help bring more rigor and order to the process; allowing for a greater likelihood of uptake, acceptance and engagement of the talent pipeline.

Succession Management Software Sign # 4: Population Under-representation

While identifying high potential staff is of course an utmost desire that succession management software can achieve, equally necessary is insight into populations that are under-represented. Aside from the regulatory implications, as with the previous sign, should females, minorities or other diversity groups feel that the succession process shows a lack of fairness; engagement will be hard to come by. Succession management software can provide the business intelligence needed to stem this tide—providing a robust and transparent method for setting up a talent pipeline that factors in as many conceivable variables as necessary.

The Way Forward With Succession Management Software

As is the case for countless other HR and HCM software initiatives, understanding when to leverage these particular technologies can be challenging. Identification and subsequent development of successor staff however, has become a business need that is not likely to die down any time soon. Further, with the recent innovations that have pushed out additional models such as succession management via Software-as-a-Service (SaaS), clearly the industry is continuing development efforts. As such, organizations should consider closely whether the abovementioned signs apply to their companies; and, if so, should begin a measured and diligent process to ensure that succession management software is selected, implemented, and maintained. Plus, going further, as Aon-Hewitt enumerates, good succession planning will ultimately deliver "greater shareholder return for your business".

  Categories: Succession Management Software

  Tags: Succession Management

  Permalink: www.hrlab.com/succession-management-systems.php

 Author: Kazim Ladimeji

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