Your ability to serve your community is directly impacted by your ability to find and retain qualified employees.
Succession planning is one effective process financial institutions can use to shore up their talent pool. A solid internal development process shows people you care about their career goals and helps them envision a long-term future in your organization.
Research from Glassdoor shows that career growth is essential to talent retention. People with opportunities to learn and advance are more likely to stay than employees who stagnate in the same job.
This isn’t just about your key leadership positions. Succession planning can take place at every level of the organization, creating career paths that engage employees and equip them with the knowledge and skills your financial institution is going to need today and into the future.
Your organization stands to benefit from succession planning in several ways:
- Creating a pipeline of talent
- Promoting equity and inclusion
- Preserving institutional knowledge
- Reducing employee turnover
- Advancing a growth and development culture
- Investing in your community by investing in your employees
Part of succession planning means looking out to your larger team and showing employees how they can grow and advance within the organization. Financial institutions need to build a talent pipeline that matches organizational long-term strategic goals. In order to do this, the human resources strategy needs to align with the organizational strategy to ensure proactive, intentional and targeted development efforts.
Your succession planning to-do list
Succession planning is an ongoing process. To be effective, review employee career paths at least once a year to ensure people are engaged and on track. Here’s a quick succession planning to-do list to get you started:
Step one: Strategic plan
Building a succession plan starts with your strategic plan. You have to know who you are as an organization and where you’re headed.
Look at your planned future-state and figure out what positions and mission-critical skills you’ll need to execute on that vision. Clarifying what you need today and into the future is critical to the process.
Step two: Organizational structure
Consider your organizational structure. In consideration of your strategy, determine how should the organization be structured to ensure effective communication, decision-making, alignment of roles and responsibilities within and across functional areas — particularly if you will be adding new position to the structure. If your financial institution strategy is evolving to adjust to changing priorities, this further underscores the importance of evaluating your organizational structure. Alignment is critical.
Clearly outlining your structure also signals to employees what opportunities might be available to them as they grow within the organization and is an important part of the career pathing process.
Step three: Job descriptions
Once you’ve outlined the critical positions needed for future success, outline the responsibilities, accountabilities, knowledge skills and abilities needed for each position. Comprehensive job descriptions serve as the foundation for effective talent management — particularly succession planning.
Ensure managers and employees have access to your job descriptions. By allowing managers and employees to see job descriptions across the organization, they can better use that information for performance coaching and career planning.
Step four: Talent assessment
Assess your current employees to identify high-potential talent and key contributors. A nine-box matrix, like the one shown below, is one common tool used to capture employee performance and potential.
Step five: Understanding employee career interests and readiness
Ask employees about their career goals and interests to ensure the institution’s investment in development is targeting employees who have interest and passion. Succession planning processes should always include discussions with employees to understand what future they aspire to.
Knowing the readiness of potential successor candidates is critical to the planning process as well. Understanding readiness can help identify employees’ strengths and development needs and track who is immediately ready to assume a role, who may be able to serve in an interim capacity, and those who may be ready over time for key/critical roles.
Create personal development plans for employees interested in growing with the organization. Plans could include:
- Skill building, steps to achieve competency
- Practical experience
- Coaching and/or mentoring roles
- Reviews, feedback and recognition
Recognize that most employees need some sort of challenge in order to stay motivated and engaged at work. Even employees that aren’t interested in management should be given opportunities to learn and grow.
Step six: Career pathing
Develop a formal career pathing process. Communicate the organization’s priority to develop internal talent. Let employees know how career pathing will take place and how career options will be managed within the organization.
A formal career pathing process is essential to help employees feel empowered and in control of their own careers. Career pathing engages and motivates employees because they see how to align their talents and interest with the institution’s overall needs and objectives. Career pathing is a partnership and joint responsibility of both the manager and employee.
Ensure your career pathing process makes it possible for employees to grow without moving up the managerial ladder. Lateral, or lattice-style, moves may help employees be more effective in future roles. But you need to help them see value in such career shifts.
Succession planning and financial institution staff development
Succession planning is a proactive, intentional investment in developing your bench strengths and future leadership. Effective planning isn’t solely focused on financial institution leadership but takes an organization-wide approach to employee development.
Organizations who are successful take the time to evaluate their future needs against their current talent makeup and take a long-term approach to aligning individuals to the appropriate roles at the appropriate time.
Wipfli can help you identify your talent needs, plan for key roles and optimize your talent. Get to know more about our talent and change solutions, or continue reading:
How a talent assessment helps you retain employees
Align performance management and compensation systems
Succession planning: A critical talent retention strategy
HR strategy: Create a proactive people-plan that speaks to your leaders’ real goals