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SUCCESSION planning guide

INTRODUCTION

While all employees contribute to an organization's success, some positions are more critical. The loss of employees in these positions can be devastating. These positions are called key positions, as they are the key to an organization's success. Unfortunately, you can expect increased turnover among employees in these positions over the next few years, as many of these employees are approaching the ends of their careers. As they possess critical knowledge and skills that you can ill afford to be without for long periods of time, planning must occur to ensure that employees are prepared to replace them when they leave. This planning effort is called succession planning. Predicted labor market shortages in many occupational areas increase the criticality of succession planning as external recruitment will be difficult. In addition to key positions, succession planning also covers identifying hard-to-fill positions and preparing internal employees to fill them to avoid costly, time consuming, and often futile recruitment efforts. In addition to preparing employees to replace departing employees, succession planning also includes: · plans to recruit externally when it is not feasible to prepare internal employees. · temporary plans so that critical work can continue during the recruitment and selection process. · alternate approaches such as reorganization, or the use of contractors when filling a key or hard-to-recruit position, is not practical. To summarize, succession planning is a systematic process to identify key and hard-to-recruit positions, identify the critical competencies that employees in those positions possess, and prepare for their replacement to ensure the continued ability of an organization to meet its strategic goals and supporting objectives. This guide will take you step-by-step through a yearly succession management process. As all organizations are different, you may need to modify the process or the tools provided to work better for you. The following diagram outlines the yearly succession planning process:

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STEP 1: organize succession planning efforts

In this section, the need to gain top management support is emphasized. A Succession Planning Committee, made up of line managers, is described. The Succession Planning Committee manages the succession planning process and reports back to top management. The Talent Management Team concept is also introduced. Members of Talent Management Teams are subject matter experts who analyze data and make succession-planning decisions for groups of similar positions. The role of the Human Resources Office as coordinator, information gatherer and facilitator is described, as well as the role of managers and employees.

STEP 2: identify and prioritize succession problems

In this section, key and hard-to-recruit positions are identified and grouped with similar positions, risks are assessed, and problems are prioritized.

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STEP 3: identify critical competencies for key and hard to recruit positions

The goal of succession planning is not to replace employees with employees exactly like them. Agency strategic plans, goals, and objectives, and occupational job change must be considered to make sure that replacements have the knowledge, skills and abilities to perform the jobs of the future and move the organization forward. In this section, critical competencies required by key and hard-to-recruit positions are identified.

STEP 4: identify and evaluate applicant pools

Mapping the historical flow of internal employees into key and hard-torecruit positions is the first step. However, this historical flow might be too limited. Alternative internal applicant sources should be considered. In this step, applicant pools are identified and determinations are made on whether or not applicant pools are sufficient to fill future key or hard-torecruit vacancies. Any gaps, between competencies required and competencies that employees in the applicant pools have, are identified.

STEP 5: identify and implement strategies and programs for succession

Descriptions of programs to prepare potential replacements for key and hard-to-recruit positions can be found in the Development section of the Performance Solutions website. Talent Management Teams should recommend programs that would contribute towards improving their applicant pool and recommend them to the Succession Planning Committee. In turn, the Succession Planning Committee should compile recommendations from the Talent Management Committees and make overall recommendations. This step also includes developing temporary coverage plans while positions are vacant and recruitment plans so that recruitment can begin immediately when a position becomes vacant. Employees in the applicant pools need to know what the key or hard-torecruit positions are and what competencies are needed to compete for them. They also need to know about special developmental programs and opportunities that will be made available to them. Managers over these employees need to have the same information, as it is their responsibility to encourage employees to develop to meet future organizational needs.

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STEP 6: evaluate the program

Ideally, succession planning should follow a yearly cycle with a formal program evaluation occurring at the beginning of each cycle. In addition to the yearly review, a mid-cycle review is described as a check to see if applicant pool development programs and strategies are being implemented as expected and are working properly. These major steps are further broken down into sub-steps. The Succession Planning Plan mirrors the steps described in the Succession Planning Guide and can be used to develop a detailed Succession Planning plan.

STEP 1.0 - organize succession planning efforts

The following table identifies the players in the succession planning process and their roles: Player Executive Management Responsibility

· Set strategic direction. · Support succession management efforts. · Manage the succession planning process. · Define the scope of succession planning efforts through identifying and prioritizing issues. · Identify Talent Management Teams and coordinate their efforts. · Develop strategies and identify programs to improve the readiness of replacement employees. · Evaluate progress . · Identify competency requirements of key and hard-to-fill positions. · Identify and evaluate applicant pools. · Identify programs and strategies to strengthen applicant pools. · Prepare temporary coverage and recruitment strategies. · Gain support for succession planning efforts by presenting a business case for succession management to executive management. · Organize the Succession Planning Committee and Talent Management Teams and provide support by preparing them, collecting and summarizing data and implementing development programs that are within their area of responsibility. · Evaluate employees in applicant pools. · Develop their employees so that they are ready to fill key and hard-to-recruit positions as they become vacant. · Develop themselves so that they are ready to fill key and hard-to-recruit positions as they become vacant.

Succession Planning Committee

Talent Management Teams

Human Resources

Managers

Employees

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Step 1.1 - Gain Executive Management Support

As a key player in the succession planning process, Human Resources is responsible for initiating succession management efforts. Human Resources must make the case to executive management that succession problems are real and that efforts must begin immediately to ensure smooth transition as key and hard-to-recruit positions begin to become vacant at a quicker pace. This can be accomplished through presenting a business case for succession planning. If the business case convinces executive management of the need to embark on a succession planning process, they will want to know some high level details like who will be involved, how much time they will be involved, and when that involvement will occur. A model Business Case for Succession Planning and a High Level Succession Planning Plan are available to assist you in convincing executive management to support succession-planning efforts. The Business Case for Succession Planning should be customized with information from your agency prior to use. Step 1.2 - Establish a Succession Planning Committee After you get the go ahead from executive management, a Succession Planning Committee needs to be selected. At a minimum, the Succession Planning Committee should include mid and high-level managers from organizational units where succession management issues are suspected. The ideal committee should have representation from all of the major departments in an agency. It is suggested that the leader of the Succession Planning Committee be a manager, as management needs to own the succession planning program, not Human Resources. Step 1.3 - Conduct a Kick-off Meeting with the Succession Planning Committee After Committee selection, a kickoff session should be held to present the business case for succession management, outline the succession management planning process and review the committee's responsibility and time commitment. The following tools are available for your use: Business Case for Succession Planning, Succession Planning Committee Responsibilities, and a Succession Planning Plan. Step 1.4 - Develop a Succession Planning Plan After the kick-off session, the Succession Planning Committee should develop a detailed plan using the Succession Planning Plan as a model.

STEP 2.0 ­ identify and prioritize succession problems

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The Succession Management Committee is responsible for gathering information to identify succession management problems, evaluate their criticality, and select those issues that will be addressed first. Due to the number and magnitude of succession problems, it is possible that Succession Management Committees will address only the most critical problems the first year. Step 2.1 ­ Establish a Definition for Key and Hard-to-fill Positions Key positions are positions that include responsibility for performing mission-critical work that is necessary for an organization to achieve its business goals. Key positions include responsibility for planning, designing, delivering or managing the flow of essential services. A vacancy of over one week in a key position would have a negative impact on the delivery of services because of the criticality of the work. A position's location near the top of an organizational chart does not necessarily mean that it is a key position. Considerations include duties assigned, the work assignments/projects, geographical location or the incumbent's unique skills. Employees who possess knowledge/skills that are crucial and unique often fill key positions. These unique skills and knowledge are critical to the success of the unit/organization and are not found in other employees' positions in that role. Or, the role is altogether unique and key to the organization and has significant influence on performance outcomes. The Succession Planning Committee should establish a working definition of a key position using the above information and the Tips for Identification of Key Positions document. Likewise, a working definition needs to be developed for hard-to-fill positions. Positions are typically hard to fill if they are characterized by shortages of trained workers and high wages relative to State pay scales. These factors often lead to extended recruitment and reposting periods and, sometimes, an inability to fill a position. Step 2.2 ­ Identify and Group Key and Hard-to-recruit Positions Using the working definitions of key positions and hard-to-fill positions, the Succession Planning Committee should identify positions, gather basic information on them and enter the basic information in the Key and Hardto-fill Risk Analysis Spreadsheet. The Tips for Identification of Key Positions document provides information on how to designate positions in BEACON. Once key positions have been identified, designations can be entered into the BEACON system so that information can more easily be extracted and entered into the Key and Hard-to-fill Risk Analysis Spreadsheet. A key metric for succession planning is the number of key positions that have at least two replacements available within the organization. To select positions for inclusion in the Key Position Risk Analysis Spreadsheet, it is suggested that you initially designate positions as not having replacements available and then change the designation as more information becomes available. Hard-to-recruit positions can be identified by reviewing information in the Occupational Outlook Handbook.

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In addition, position histories, turnover information, information from agency recruiters, and information from management can be used to identify these groups. Hard-to-fill positions cannot be designated in BEACON, so alternate means will need to be used to enter basic position and employee information into the Risk Analysis Spreadsheet. After basic information is entered into the Risk Analysis Spreadsheet, key positions and hard-to-fill positions should be grouped for further analysis. For example, there might be key leadership positions, key middle manager positions and key technical positions. These groups might be further divided by occupational area. 2.3 ­ Conduct a Risk Analysis and Identify High Risk Areas to Initially Address Information in the Key and Hard-to-fill Risk Analysis Spreadsheet includes employee age, years of service and projected retirement date. Considering these factors, an overall risk assessment number can be determined for each position. For example, a risk assessment number of 1 might indicate a critical risk that the employee will leave within the next year, while a number of 3 might mean that the employee may leave within 5 years. The Succession Planning Committee should agree on an appropriate scale. The risk assessment numbers can be used to identify groups of positions and individual positions within those groups that are the most critical, and which should be addressed first. 2.4 ­ Establish Talent Management Teams Further analysis of each key and hard-to-fill position group is likely to require more specialized knowledge. It is suggested that the Succession Planning Committee establish a Talent Management Team for each group of positions identified in Step 2.3. In some situations, the Succession Planning Committee could take on the role of one of the Talent Management Teams. Talent Management Teams should include members who understand the types of jobs included in each group, the organizational structure around the groups and labor market conditions. 2.5 ­ Conduct a Kick-off meeting with the Talent Management Teams As with the Succession Management Committee, one or more kick-off sessions should be held with the Talent Management Teams. The following tools are available for your use: Business Case for Succession Planning, Talent Management Team Responsibilities, and a Succession Planning Plan.

STEP 3.0 ­ identify critical competencies for key and hard-to-

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recruit positions

Key and hard-to-recruit positions require a variety of knowledge, skills and abilities. However, only some of these competencies are critical and contribute to a position being key or hard-to-fill. Efforts should focus on identifying these critical competencies. These competencies will later be used to evaluate employees in potential applicant pools. Step 3.1 ­ Gather Competency Information Competencies can be identified through collecting information directly from employees through interviews, questionnaires or focus groups. A Critical Competency Interview Guide and a Focus Group Guide for Gathering Critical Competency Information are available to assist in gathering competency information. Many competencies have already been identified. The Certified Public Manager Competency Model and Career-banding competencies are available for consideration. CareerBanding competencies can be found at www.osp.state.nc.us/CareerBanding/Competency%20Dictionary.doc. Step 3.2 ­ Identify critical competencies When information is gathered from employees, the resulting information will reflect existing competencies. For many agencies, additional competencies may be needed to meet future challenges. These critical competencies can be identified by reviewing agency strategic plans, goals and objectives; occupational trend information; and interviewing agency leaders. In selecting critical competencies, consider those competencies that set the key or hard-to-fill positions apart from the rest. Competency information can be summarized by role through using the Key and Hardto-fill Position Profile. Step 3.3 ­ Define competencies and identify behaviors that demonstrate them In addition to identifying competencies, definitions of competencies and lists of employee behaviors that you might expect should be written for clarity. Leadership and Career-Banding competencies can be used as examples. Helpful information can be found in the Certified Public Manager Competency Model and Career-Banding competencies referenced in Step 3.2.

STEP 4.0 ­ identify and evaluate applicant pools

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Once critical competencies have been identified for each group, the next step is to determine whether a sufficient number of applicants are available to fill vacancies as they occur. This is accomplished through identifying and evaluating an applicant pool for each key position or hardto-recruit group. Step 4.1 ­ Identify historical and new applicant pools Applicant pools can be identified through reviewing organizational charts to get a visual of potential employee progression routes. Histories of employees in key and hard-to-recruit positions can be reviewed to determine previous roles. Such reviews will identify historical applicant pools only. Relying solely on what has happened in the past may not be sufficient. New and perhaps broader applicant pools should be identified. Step 4.2 ­ Collect information on competency levels of employees in applicant pools and identify competency gaps After applicant pools have been identified, competency information should be gathered on employees in the applicant pools as a first step in determining if employees in the applicant pools have the right competencies to replace employees in key and hard-to-fill positions as they leave and to identify employee developmental needs. If your applicant pool is relatively small, information could be collected from each potential applicant through the use of the Employee Profile. If the applicant pool is large, collecting information from each employee might be too time consuming. In these cases, you should consider a survey of supervisors over employees in the applicant pool to gather their opinions on the readiness of their employees to move into key or hard-tofill positions through the use of the Applicant Pool Readiness Survey for Supervisors or the Emerging Talent Grid. Managers rate each potential employee on each critical competency. Using the Emerging Talent Grid, managers over employees In the applicant pool summarize employee readiness using a matrix considering performance and competencies. Whether the profile, survey or grid is used, resulting information can be summarized and used to determine if there is a sufficient supply of employees prepared to enter key or hard-to-recruit positions and what gaps exist in the applicant pool between competencies they possess and competencies needed in key and hard-to-fill positions. If development activities are in order, information gathered could be used to determine the extent of development activities that will be required. In some cases, competency gaps are obvious and extensive analysis is not necessary. 4.3 ­ Update key position information in BEACON After evaluating the applicant pools, key employee information in BEACON regarding whether or not replacements are available for each key position should be updated.

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STEP 5.0 ­ identify and implement programs and strategies for succession

As it takes less time to fill a position from within and employees promoted internally are more likely to succeed, succession planning focuses on developing applicant pools so that a ready supply of replacement employees is available for each key position. For each competency gap, programs and strategies should be identified to close competency gaps and reduce the impact of a key or hard-to-recruit position vacancy. Step 5.1 Develop recruitment plans and temporary strategies for getting work done during vacancy periods Agencies cannot afford to leave key positions vacant for long periods of time. One of the identifying criteria for a key position is that an agency's ability to meet critical goals and objectives is diminished if the position remains vacant for longer than one week. As any key position could become vacant at any time, a Vacancy Readiness Plan should be completed and ready to put into operation for the most critical key positions and hard-to-fill positions where turnover is heavy, if not for all positions. Recruitment information can be found in the Recruitment section of the website. Ideally, readiness plans should be available for all key and hard-to-recruit positions. The Vacancy Readiness Plan includes steps to take to temporarily get the work done while a key position is being filled and recruitment strategies. Step 5.2 - For each competency gap, identify strategies and programs to increase the competency level of employees in applicant pools The following are examples of developmental activities: · Career Development Plans ­ Career development plans should be in place for all employees who might be future candidates for key or hard-to-recruit position vacancies. Information can be found in the Career Development Planning section of the website. · Temporary assignment ­ An employee is assigned for a definite period of time to another job to learn that job. · Job Swapping ­ Two employees switch jobs for a definite period of time to cross train them. · Job Shadowing ­ An employee observes another employee while that employee performs a task. · Mentoring ­ An employee is assigned to provide guidance, advice and assistance to another employee. · Job Rotation ­ An employee is moved from job to job over a period

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of time to broaden skills. · Classroom or on-line training ­ An employee attends a formal classroom or on-line class. · Stretch assignments ­ An employee is given an assignments that is more complex than those that the employee typically performs. · Observe a role model ­ One of the most effective ways of improving some employee's skills is by role modeling. If customer service is important in a job, how the supervisor handles customers sets the tone for the organization. · Attendance at conferences and seminars ­ These are especially useful when an employee works in an occupational area where knowledge evolves · Self study ­ Study of policies, manuals, instructions, etc. · On-the-job training ­ Specific job related training provided by a more experienced co-worker or supervisor. · Knowledge Transfer ­ The transfer of knowledge from an employee in a key position who is at-risk of leaving to other employees. More information can be found in the Knowledge Transfer section of the website. · Formal leadership development program ­ If significant gaps exist in leadership competencies, a formal leadership development program should be considered. Information can be found in the Leader Development section of the website. In addition, steps could be taken to retain employees in key and hard-torecruit positions. Information can be found in the Retention section of the website. A Succession Management Solutions Matrix is available for your use in identifying and recording solutions and those responsible for implementing them. Implementation responsibilities often fall to Human Resources or other organizational units. Step 5.3 - Establish metrics and targets for developing applicant pools The main metric for succession planning programs is the percent of key positions that have at least two replacements available. A reasonable target should be established considering the current percent. The statewide goal is for 80% of key positions to have at least two replacements available. As it might take more than one year for your agency to meet that goal, a reasonable target should be established to track your progress. There are no statewide metrics for the percent of hard-to-fill positions that have at least two replacements available. It is suggested that you set a goal based on your key position goal. Additional information on establishing additional metrics can be found in the Metrics

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section of the website. Some possibilities might be the percent of employees in the applicant pool with development plans in place or the percent of succession problems that have been addressed. Step 5.4 - Communicate Opportunities to Managers and Employees Supervisors over employees in the applicant pool are responsible for developing a sufficient number of employees to fill key and hard-to-recruit vacancies to ensure smooth succession. Competency requirements and development activities identified in Step 5.2, as well as information on the number of key positions and hard-to-recruit positions, should be made available to them. Because employees in the applicant pools are responsible for their own development, they should be made aware of key positions, their competency requirements, and developmental activities that are available to them. The success of succession management efforts lies with employees in the applicant pools and their supervisors.

STEP 6.0 - evaluate the program

Formal succession planning is typically a yearly effort. At the beginning of the each yearly cycle of succession planning, repeating Step 2 ­ Identify and Prioritize Succession Problems, will give you a picture of the progress that you have made. Information gathered on applicant pools can be used to update positions with replacements available. However, it is useful to evaluate progress about mid-year and adjust, delete or add programs if required. Step 6.1 - Review progress towards reaching targets and adjust programs and strategies if necessary Information from supervisors over employees in the applicant pools is required to complete an evaluation of succession planning efforts. A Supervisor's Survey of Development Activities has been developed for use in collecting information on development activities.

www.performanceSolutions.nc.gov/staffingInitiatives/successionPlanning/SuccessionPlanningGui de.pdf

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