Most business owners want their enterprises to continue to succeed after they and other key employees retire or leave the company. For this to happen, owners should have a plan to ensure a business is in good hands when key individuals exit.
If you are a business owner concerned about mitigating losses upon employee departure, consider the following succession planning tips.
Identifying who will take your place when you leave your business is crucial for several reasons. It can:
- Allow the parties to prepare and decide whether to accept or decline the opportunity
- Provide clarity and guidance to the workforce, who will likely worry about their jobs and future with the business
- Minimize disruption during transitions
- Ease the burden on parties who may be otherwise left to make business-related decisions without your guidance
Succession planning ensures you, your successors and your employees have the framework and direction necessary to recover from the loss of a valuable leader or owner.
Encourage the transfer of knowledge
According to statistics from the Government of Alberta, roughly 17 percent of Alberta’s workforce is over the age of 55. Further, by the year 2025, over 1 million Albertans will be 55 or older. That means that in fewer than five or 10 years, hundreds of thousands of workers will be retiring or leaving the workforce for other reasons.
Often, these workers have valuable knowledge, training and skills they developed over decades of working. Identifying these and implementing a system of sharing the information with others in an organization can help ensure all is not lost when someone leaves the business.
Age-related attrition will happen. Putting a system in place to transfer knowledge can mitigate costly losses of information.
Prioritize development plans
Effective succession planning is not a single decision – it is a process. One component of this process could involve establishing development plans.
For instance, you might implement ongoing training programs, offer periodic skills testing and foster internal partnerships to facilitate sharing of information across your business.
These systems can formalize paths to leadership and ensure there are contingencies when key parties leave the business.