Succession planning and management guide

For human resources professionals

Succession planning and management is an essential component of broader human resources planning and is key to delivery of Public Service renewal. Effective succession planning and management helps organizations to identify, develop and retain capable and skilled employees in line with current and projected business objectives.

This guide will help you incorporate succession planning and management into your human resources planning process.

What is succession planning and management?

Succession planning and management involves an integrated, systematic approach to identifying, developing and retaining employees in line with current and projected business objectives.

It is about developing pools of talent to fill key areas and positions that are critical to an organization's ongoing operations and long-term goals. Succession planning helps employees to acquire the skills and competencies they need to compete for these positions when they become available. It does not entail guaranteed promotions for individual candidates.

Executives, managers and human resources professionals all play important roles in succession planning and management. So do employees, who are responsible for expressing an interest in career advancement, having learning plans and participating in opportunities to acquire capabilities in certain areas.

Currently, federal public sector organizations are at different stages in their approach to succession planning and management. Before beginning the planning process, you should assess the state of succession planning in your organization, including the need to reflect key values. Several key principles can help you tap into the advantages of succession planning and management.

Key principles

Succession planning and management is aligned with business plans and broader human resources planning process and linked to performance management; training, learning and development; staffing and recruitment; diversity and employment equity; official languages.

Succession planning and management extends to all levels: Succession planning and management considers all key areas and positions within an organization: it is not limited to executive-level positions.

Succession planning and management is about creating a pool of talent: Planning for current and future needs involves helping employees to develop the skills and competencies to ensure that the organization has a pool of talent for key areas. It is not about identifying individual candidates for specific positions.

Succession planning and management is values-based and well communicated: There is collaboration among key players, the process is well communicated and fair, accessible and transparent.

Succession planning efforts are monitored, measured and evaluated: Processes are established to monitor performance and progress in achieving the objectives outlined in both the succession plan and employees' learning plans.

Advantages

The benefits are wide-ranging, including:

• improved employee engagement and resulting cost/benefits
• development of a qualified pool of candidates ready to fill key areas and positions
• better appreciation of employees on the part of managers
• strategies to transfer corporate knowledge
• gains toward meeting employment equity and official languages goals
• increased ability to achieve business goals
• a more efficient and effective Public Service

The business case

Departures and retirements
Based on departure trends, around 25 percent of indeterminate public servants are forecast to leave the Public Service over the next five years (2008 to 2013). In 2008, two-thirds of all departures were attributable to retirement. Because retirements will occur over a period of time, this is a manageable issue; however, it requires strategic planning. Effective succession planning ensures that the federal government will have a supply of candidates who are qualified for leadership roles and other key areas and positions when these become vacant.

Competition for skilled employees
In a survey by the Canadian Labour and Business Centre, over two thirds of public sector managers reported current or expected shortages of skills and identified succession planning as the top action needed to address these shortages. Succession planning helps to retain skilled talent by ensuring that employees are provided with challenging assignments that support their career objectives.

Increasing diversity of the workforce
Immigration was the source of 70 percent of recent labour force growth, according to Statistics Canada, and projections are that it will be 100 percent by 2011, resulting in higher workforce availability of visible minorities. Without a systematic succession planning process, job incumbents tend to identify and groom successors who are remarkably similar to themselves in appearance, background and values. Effective succession planning ensures that strategies are in place to meet employment equity goals, and therefore that the Public Service reflects the Canadian population it serves.

Need to retain corporate knowledge
When employees leave, organizations may face not only loss of skills but also loss of corporate knowledge. Effective succession planning ensures that strategies are in place for knowledge transfer.

Career development leads to higher levels of employee engagement
Employees who are given opportunities to develop their careers are more likely to report higher levels of engagement. In other words, they are more likely to be committed to the organization, to take pride in their work and to work hard at what they do, resulting in cost benefits.

Approach to succession planning and management

There is not a "one-size fits all" approach to succession planning—what works in one organization may not work in another, given different contexts and resources. Moreover, an approach may evolve over time as an organization learns what works and what needs to be improved.

Different organizations are at different stages in their approach to succession planning. You can use the following chart to assess the state of succession planning in your organization. The information you gather can be used to build a more comprehensive, leading approach to succession planning.

Traditional Approach

Replacement Planning

• Focus is limited to executive-level positions.
• Focus is on identifying immediate and short-term replacements.
• Plans are limited to identifying one or two potential successors for senior positions.
• Plans are linked to individual job requirements.
• Potential candidates are identified based solely on feedback from their immediate supervisor.
• Succession planning is done in isolation from other HR disciplines (e.g. diversity initiatives, recruitment, and learning, training and development).

Leading Approach

Succession Planning and Management

• Focus is on key areas and positions at different levels.
• Focus is on the development of talent for the longer term.
• Plans include developing pools of talent for key areas and positions.
• Plans are linked to building competencies and skills that are required to achieve current and future business goals.
• A systematic process is used to assess candidates based on feedback from multiple perspectives and sources of information.
• Processes are in place to integrate succession planning with other HR disciplines.

Assess the state of succession planning and management in your organization

Current state

• Is succession planning currently done? If so, how?
• To assess the current state, consider starting discussions among key decision makers and stakeholders, establishing a committee or conducting a survey.
• What areas need improvement?
• Is succession planning linked with the broad human resources planning process and aligned with business planning?

Desired state

• How will you involve representatives from other human resources disciplines (e.g. performance management; training, learning and development, staffing and recruitment; and employment equity and official languages) to ensure succession planning is integrated with the broad human resources planning process?
• How will you involve representatives from program planning (e.g. corporate and strategic planners) to align succession planning and to minimize the impact of any organizational changes (e.g. changes in priorities, restructuring).
• Have you defined the business case and communicated it to enhance engagement of key stakeholders (e.g. managers, employees and bargaining agents)?
• Have the roles and responsibilities of stakeholders been determined and clearly communicated?
• Which aspects of the succession planning process will be decentralized to the business unit level and which will be kept at the corporate level?
• Is there a communications plan, including key messages (e.g. that succession planning does not guarantee promotions for individual candidates)?
• How will you ensure the transparency of the process?
• What data and technology are needed?
• What resources (e.g. financial, human, technological) are needed?
• What tools (e.g. procedures, templates) are needed to support the process?
• Have you considered implementing a pilot project?
• How will effectiveness be tracked, monitored and reported?

Key values: transparency, fairness and accessibility

Succession planning and management must reflect the core values of fairness, access and transparency. These are fundamental values of the Public Service Employment Act (PSEA).

It is important to ensure that:

• the succession planning process is transparent and well communicated to all employees;
• candidates are assessed objectively, without personal favouritism;
• employees who express an interest in career advancement have a reasonable opportunity to be considered for future positions; and
• appointments are based on merit.

Succession planning and management should ensure that employees who express an interest in and who have the potential to fill key areas and positions are provided with appropriate opportunities to acquire the necessary skills and competencies to compete for these positions when they become available. Succession planning does not entail guaranteed promotions for individual candidates. It is important that organizations carefully identify capabilities for key areas and positions and manage employee expectations to avoid misunderstanding.

Although the focus of succession planning and management is on key areas and positions, development initiatives should occur alongside more broad-based learning initiatives. In other words, all employees should be encouraged to have learning plans and participate in learning, training and development opportunities to further their careers. However, the analysis of key areas and positions may suggest that developmental programs and activities be tailored to build competencies for certain areas.

Roles and responsibilities

Executives

• Ensure that succession planning is integrated with human resources planning and business planning
• Communicate and champion the importance of effective succession planning and management
• Participate in the succession planning process and talent review meetings for executive level positions

Managers

• Participate in identifying key areas and positions
• Identify capabilities (knowledge, skills and abilities) required for key positions
• Identify critical or emerging gaps and communicate these to employees so that they can better tailor their learning plans
• Consult with stakeholders, including representatives of bargaining agents and employees
• Reserve time to discuss career development with each employee.
• Provide employees with opportunities for development
• Conduct performance reviews and assist employees to determine needs for further development
• Participate in talent review meetings and in developing succession plans for key positions
• Link succession planning strategies to program and financial planning to minimize the impact of developments such as expenditure reviews
• Promote a transparent approach by communicating succession planning initiatives
• Evaluate the effectiveness of succession planning initiatives and amend the succession plan as required

Human resources professionals

• Develop human resources tools for managers and employees
• Provide timely advice and guidance to managers, e.g. by helping to identify vulnerable positions (e.g. for which incumbents will be retiring or leaving for other reasons within the next several years) or key areas and positions
• Engage in and ensure ongoing discussions with bargaining agents
• Ensure ongoing discussions with corporate planners and ensure that links are made to program management
• Facilitate Performance Management Program exercises and talent review meetings as requested
• Consult with functional communities (e.g. financial management, information technology) that can provide a horizontal, Government-wide perspective on identifying current and future human resources needs
• Help managers to evaluate succession planning initiatives
• Help communicate key areas and positions to employees

Linking succession planning and management with the human resources planning process

The five-step process for planning and managing succession is a component of broader human resources planning. As part of human resources planning, a gap analysis may identify key areas, one of which may be succession planning. Other areas may include recruitment, change management, employment equity and official languages. Your succession plan should be incorporated into your human resources plan.

Five-step process for succession planning and management

• Step 1: Identify key areas and positions
• Step 2: Identify capabilities for key areas and positions
• Step 3: Identify interested employees and assess against capabilities
• Step 4: Develop and implement succession and knowledge transfer plans
• Step 5: Evaluate effectiveness

Templates

Templates have been developed to help you prepare and support your succession planning strategies which will be included in your human resources plan. You can use these templates in whole or in part to supplement your organization's existing planning processes. They are not intended to replace any that your department or agency may already have in place.

STEP 1— Identify key areas and positions

Key areas and positions are the focus of your succession planning and management efforts. For example, succession planning activities may be geared to developing talent for certain occupational groups (e.g. executives, foreign service officers) or functional communities (e.g. financial management, the human resources community), or they may focus on increasing representation of persons in a designated group.

Key positions are those that exert critical influence on the operational activities or strategic objectives of the organization. This means that without this role, the organization would be unable to effectively achieve its business objectives.

Executives and managers need to play a primary role in identifying key areas and positions because they are linked to the operational activities and strategic objectives of the organization. However, human resources professionals can play a supportive role by providing criteria to help managers in this role.

In this step, managers should:

• Use the results of the environmental scan and of the gap analysis to identify key or vulnerable areas.
• Link identification of key areas and positions to current and future business objectives.
• Communicate the key areas and positions to employees so that they can tailor their learning plans to acquire these capabilities.

Questions to consider when identifying key areas and positions

• Which positions, if left vacant, would cause major difficulties in achieving current and future business goals?
• Which positions, if left vacant, would be detrimental to the health, safety or security of the Canadian public?
• Which positions will be difficult to fill because they require particular expertise and/or because the incumbents possess a wealth of corporate knowledge?
• Is there a current or projected labour market shortage for necessary skills in your branch or sector?
• Which positions have traditionally been difficult to fill?

Step 1 — Template: Key positions profiles

The following template will help you prepare the profiles of your key positions.

Template in RTF format

Note: This template is available here in Rich Text Format. If it is not accessible to you, please contact TBS Web Services by e-mail or for assistance telephone (613) 957-2400 to obtain other formats such as regular print, large print, Braille, audio cassette or other format.

STEP 2—Identify capabilities for key areas and positions

It is important to identify the capabilities needed for key areas and positions for guiding learning plans. Capabilities may also serve as the basis for self-assessment tools. Moreover, knowing the required capabilities is necessary for setting clear performance expectations, assessing performance and for selection purposes. For the purposes of this guide, capabilities may consist of knowledge, skills and abilities (KSAs) or competency profiles.

Whether your organization uses KSAs or competency profiles, it is important to incorporate capabilities for key areas and positions into strategies for succession planning and management. This practice will allow you to better assess gaps and focus development efforts.

Definition of capabilities

For the purposes of this guide, capabilities may consist of knowledge, skills and abilities (KSAs) or competency profiles.

Knowledge, skills and abilities (KSAs)

This guide defines these terms as follows:

• Knowledge is a body of information that allows a person to perform a task successfully (e.g. budgeting and accounting principles)
• Skill is an individual's level of proficiency in performing a specific task (e.g. statistical data manipulation)
• Ability is more general than skill and refers to an enduring trait or capability in performing tasks (e.g. the ability to analyze)

Competencies and competency profiles

Many organizations define competencies as knowledge, skills and abilities demonstrated through behaviours that result in superior job performance. Some definitions include personal qualities, values or traits. Examples include interpersonal effectiveness, teamwork, technical ability and reliability.

A competency profile is a set of competencies typically applied to groups of positions such as occupational groups (e.g. executives) or functional communities (e.g. information technology, finance). Some organizations also have a set of core competencies that are aligned with the organization's mission and values and that apply to all employees in the organization.

Competency profiles facilitate the alignment of succession planning and management with other human resources disciplines, such as recruitment and performance management, by using a common framework and language.

How to identify capabilities?

Once you have identified key areas and positions, create a list of the most important capabilities needed for each by using information from job descriptions and merit criteria, and by interviewing incumbents and stakeholders.

How to develop competency profiles is beyond the scope of this document, but you can consult Additional Sources of Information in the Succession planning and management resources and key documents section for more information.

Questions to consider when identifying capabilities

• Have you identified the relevant knowledge, skills (including language), abilities and/or competencies needed to achieve business goals, for instance, by speaking with incumbents or by using information from job descriptions and merit criteria?
• Does your department or agency have any leadership profiles, or are you using the revised Key Leadership Competencies Profile?
• Have you communicated information about key areas and positions, as well as skills needed for these areas and positions, to employees so that they can consider this information when they are developing their learning plans?
• Can you leverage knowledge from functional communities or other departments and agencies that have developed competency profiles for similar key areas and positions?

STEP 3—Identify interested employees and assess them against capabilities

The main purpose of this step is to identify which individuals are interested in and have the potential to fill key areas and positions so that employees can acquire the skills and competencies they need to fill the gaps when these positions become available.

Organizations typically use a combination of approaches to identify and assess such individuals. For example, the Public Service provides an Executive Talent Management framework to support the ongoing development and retention of executives.

If your organization is considering a more formal process of identifying internal talent for accelerated development, be careful to manage expectations to avoid the presumption of guaranteed promotions and so as not to alienate those not selected. It is important to inform employees who are not initially considered for accelerated development that they can be considered in the future with further career development or that there are alternative opportunities (e.g. through an assignment or a deployment).

Approaches to identify and assess employees

Self-identification

As a starting point, many organizations give employees the opportunity to express their interest in leadership roles, career advancement or lateral moves. You can do this in various ways, including:

• encouraging discussions about learning and careers between employees and managers and summarizing information from these discussions for the senior management team
• conducting a survey
• soliciting applications for a more formal process of identifying internal talent for accelerated development
• creating a skills inventory database or employee profile that provide information on employees' career interests, skills and competencies

Assessment methods and instruments

You can use a variety of tools to assess an employee's potential for leadership or other key areas and positions. These include:

• performance reviews
• talent review meetings
• assessment centres
• 360-degree feedback
• written examinations
• behaviour-based interviews
• in-basket exercises
• simulation exercises or role-playing
• aptitude tests
• employees' résumés
• reference checks

Talent review meetings

Some organizations use talent review meetings to identify the capabilities required for leadership and key areas and positions, assess the potential of employees to fill those positions and find out what further development candidates need.

To prepare for these meetings, some organizations create an employee profile. These profiles provide important information, including career aspirations, strengths and weaknesses, performance ratings, willingness to relocate, projected date of retirement and learning plans.

A key position profile will provide valuable information on time lines, language, capabilities, corporate knowledge, challenges and strategies for replacement and a rating of the importance in achieving business goals.

This information helps to balance the career aspirations of employees with organizational needs for talent to fill key areas and positions.

Effective talent review meetings:

• begin by measuring an employee's progress against his or her learning plan
• encourage participants (e.g. deputy heads, all levels of management, employees, human resources) to offer their input on employees so that assessments are based on multiple perspectives
• encourage honest and frank discussion
• include discussions on employees' learning and development needs
• are led by a skilled facilitator
• allow sufficient time for discussion
• provide for follow-up on items requiring action within a specified time limit

Questions to consider when identifying and assessing interested employees

• Have you spoken to each of your employees to discuss their career plans and interests? Have you identified those who wish to move to more senior positions or who are interested in leadership positions? Have you identified those who are interested in alternative opportunities (e.g. an assignment or a deployment)?
• Do you know which key areas and positions are vulnerable (e.g. which incumbents will be retiring or leaving for other reasons within the next several years)? Do you have enough candidates who are ready to advance or whose skills and competencies could be developed in that time frame?
• Is there a sufficient pool of bilingual candidates, as well as members from designated groups, in feeder groups for key areas and positions?
• Have you identified an interim or temporary back-up for each key area and position with the appropriate knowledge, skills (including language) and abilities to carry out the responsibilities in the short term?
• Have you addressed potential barriers to the advancement of employees from designated groups?
• Have you conducted a risk assessment for key areas and positions? The assessment should evaluate the time lines based on when the position may become vacant; the impact on current operational activities and achieving business goals; and whether there is a shortage of qualified candidates or a shortage of skills.
• Does your management team meet to discuss the requirements of key areas and positions, and what further development potential candidates need?
• Do you use multiple perspectives and sources of information (e.g. talent review meetings, assessment tools, performance reviews) to identify and assess employees who are potential candidates to fill key areas and positions?
• Have you considered building an inventory of employees' skills, experience and career aspirations?

Step 3 — Template: Employees profiles

The following template will help you prepare the profiles of your employees.

• Template in RTF format

Note: This template is available here in Rich Text Format. If it is not accessible to you, please contact TBS Web Services by e-mail or for assistance telephone (613) 957-2400 to obtain other formats such as regular print, large print, Braille, audio cassette or other format.

Step 3 — Template: Key positions analysis

The following template will help you prepare the profiles of your employees.

• Template in RTF format

Note: This template is available here in Rich Text Format. If it is not accessible to you, please contact TBS Web Services by e-mail or for assistance telephone (613) 957-2400 to obtain other formats such as regular print, large print, Braille, audio cassette or other format.

STEP 4—Develop and implement succession and knowledge transfer plans

Research has shown that experience-based learning is more effective than classroom training in preparing potential candidates to assume future roles. It is important to incorporate strategies for learning, training and development and transfer of corporate knowledge into your succession planning and management.

Strategies for learning, training and development

Stretch assignments allow employees to "stretch" beyond their current abilities. Some examples include chairing a committee or meetings, leading a special project or being assigned a challenging new task.

Acting assignments can be a good opportunity for employees to get experience at a more senior level by temporarily taking over another employee's responsibilities while they are absent.

Job rotations give employees the opportunity to work in different areas of the organization and acquire experience in different disciplines or functions. The employee remains in his or her substantive position but is exposed to different aspects of work.

Mentoring and coaching provide opportunities for employees to obtain ongoing guidance and support from more experienced employees. Arrangements can be formal or informal.

Formal training, including language training, may include classroom training, web courses and the pursuit of higher education.

Strategies for transferring corporate knowledge

Explicit knowledge and tacit knowledge are different and require different strategies. It is important to incorporate strategies that track and retain both kinds of knowledge. Explicit knowledge can be tracked and codified in manuals, directories and procedures. On the other hand, tacit knowledge, which makes up 80 to 85 percent of an organization's knowledge assets, encompasses people's insight, judgement and know-how. It requires strategies that rely on interpersonal interactions such as coaching, mentoring and job shadowing.

While many of the strategies described under learning, training and development also apply to corporate knowledge, the following options specifically address transfer of corporate knowledge:

Documentation of critical knowledge: Job diaries and other records contain a wealth of knowledge, including contacts, networks, resources, best practices and answers to frequently asked questions. Consider using a template to facilitate recording this information.

Special Assignment Pay Plan: Employees below the executive level can be appointed to classified or unclassified positions for periods of up to three years. This option allows the incumbent of a key position to be assigned under the special assignment pay plan (SAPP) and remain in the organization, thereby creating a vacancy. Following staffing of the position, the former incumbent is still available to transfer corporate knowledge to the new incumbent.

Exit interviews: Employees who are leaving the organization voluntarily complete an interview or questionnaire that captures critical information.

Communities of practice: These are groups of people who share a common purpose or concern. Potential candidates can benefit from their exchange of ideas and thus tap into another source of corporate knowledge.

Pre-retirement transition leave: Under this arrangement, employees who are within two years of retirement may reduce their work week by up to 40 percent without affecting their benefits and pension. This may be used as a retention strategy to allow more time for transferring corporate knowledge.

Questions to consider when implementing succession and knowledge transfer plans

• Have you defined the learning, training and development experiences that your organization requires for leadership positions (e.g. see Executive Talent Management) and other key areas and positions?
• Do employees have learning plans that are linked to the appropriate knowledge, skills (including language) and abilities required for current and future key areas and positions?
• Have you discussed possible means of passing on their corporate knowledge with your employees?
• Have you explored different options to support your employees' career goals, including stretch assignments, acting assignments, mentoring arrangements, job shadowing, formal courses and language training?
• Do you encourage employees to work in teams and to cross-train other employees to help transfer corporate knowledge and broaden employees' skill sets?
• Have you asked whether employees who are planning to retire within the next few years if they are interested in participating in a mentoring arrangement?
• Have you explored options that allow you to bring in a new employee while the incumbents remains in the organization to help transfer corporate knowledge (e.g. SAPP, pre retirement transition leave)?
• Have you considered offering professional development courses or establishing a professional development and apprenticeship program that is tailored to identifying and developing talent in key areas and positions and among designated groups?

STEP 5—Evaluate effectiveness

To ensure success, it is important to systematically evaluate and monitor your succession planning and management efforts and make adjustments as needed. This section provides some indicators and methods that assess effectiveness, as well as questions to consider in evaluating effectiveness.

Assessing the results of succession planning and management also helps you to determine future priorities and decide on the allocation of resources.

Examples of indicators to assess succession planning and management

The following can be used to measure progress:

• the number of vacant key positions
• average days elapsed for each key position vacancy
• statistics for turnover within key areas (look at change over time)
• the percentage of key positions that are filled internally
• the ratio of key positions for which no internal replacement can be found relative to the total number of key positions (otherwise known as "bench strength")
• average performance ratings of new employees in key positions
• drop-out rates in more formal accelerated development programs
• representation of designated groups among feeder groups and participation of designated group members in more formal accelerated development programs
• number of complaints to the Public Service Staffing Tribunal under the PSEA;
• questions from the Public Service Employee Survey (e.g. the percentage of employees satisfied with promotion opportunities)
• the People Component of the Management Accountability Framework, which outlines accountabilities in human resources management for deputy heads and managers, includes some indicators (e.g. external hires as a percentage of total hires)

Other methods to assess the effectiveness of succession planning and management initiatives

In addition to qualitative measurement of outcomes, it is also useful to measure and monitor the quality of professional development and apprenticeship programs and other initiatives by determining satisfaction with development programs and monitoring progress on individual learning plans.

Various methods can be employed to evaluate these initiatives, including the following:

Program logic models map the key activities or components of a program and how they link to short-, medium- and long term objectives. You can use program logic models to evaluate both processes and outcomes.

Cost-benefit analysis is a technique used to quantify and compare the costs and benefits of a program. Costs may be direct (e.g. money spent on an assessment centre) or indirect (e.g. time spent away on training).

Surveys can be used to measure satisfaction with different aspects of your succession planning and management process or development program.

Questions to consider when evaluating effectiveness

• Do all key areas and positions have succession plans?
• Are key positions filled quickly?
• Do new employees in key positions perform effectively?
• Do you have a pool of employees who are qualified to compete for key areas and positions?
• Are members of designated groups adequately represented among feeder groups for key areas and positions?
• Do you review your succession plan following organizational changes (e.g. changes in priorities, restructuring)?