As baby-boomers head for retirement, companies are starting to realise, sometimes belatedly, that a fair amount of corporate knowledge goes with them. Who is going to fill those shoes and effect a smooth transition? Leaving aside family-owned businesses, there are both pros and cons of succession-planning in an organisation.
• Great way to make sure there is a smooth transfer from person to person.
• The person stepping into the role has been trained on the job and knows the organisation – no lead-in time for orientation.
• Corporate knowledge is not lost
• Better the devil you know – you know what you are getting with the internal successor.
• Can be a great motivator for the person chosen as a successor – they know there is a promotion waiting for them if they do the right thing. This may be a great way to keep a specific talent with the organisation.
• The person identified for succession now may not be the best person for the job in five years’ time. Another person more suited may have joined the organisation.
• The job and its skill requirements may change between when you decide upon a successor and when they are ready to move into the job.
• There may be a negative effect on other employees not chosen for the role – if there is no possibility of promotion they may go elsewhere.
• The chosen successor may not be motivated to try hard but instead plot a “safe” course, because they know that providing they don’t make a mistake, they will get the promotion.
• You miss out on the opportunity to recruit new blood and new ideas into the organisation.
• If the chosen successor goes elsewhere or proves not to be the right person – then what?
• An employee choosing their successor will have a subjective opinion of potential candidates – and may also have an ulterior motive or hidden agenda.
• When the change-over happens, it doesn’t look like an open merit-based, fair and equitable process for appointing the successor. This may be a negative for other staff, other candidates, shareholders and clients.
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