Succession Planning: A Practical Guide for HR

TL;DR

Succession planning helps organisations prepare employees to take over critical roles and reduce disruption when key people leave. An effective plan identifies critical roles, assesses potential successors, addresses skills gaps and prepares for planned and unexpected vacancies. Regular reviews, employee development and clear knowledge-transfer arrangements help keep the plan relevant and useful.

When a key employee leaves, retires or moves into a new role, the organisation can lose essential skills, knowledge and leadership capacity. Succession planning helps organisations prepare for these situations by identifying employees who could take on critical roles and developing the skills they need. It covers more than senior leadership; specialist and operational roles can also put business continuity at risk when no suitable successor is ready.

This guide explains the types of succession planning, how to build a plan in seven steps, what to include in a succession planning template and the best practices HR teams can use to prepare employees for future roles.

What is succession planning?

Succession planning is the process of identifying and preparing employees to take over critical roles when current role holders leave, retire, get promoted or become unavailable. It helps organisations maintain business continuity, retain institutional knowledge and prepare internal talent for future responsibilities.

An effective succession plan identifies key roles, assesses potential successors against role requirements and outlines the development needed to prepare them for those positions.

The 4 most common types of succession plans

Organisations use different types of succession plans depending on the roles they need to cover and the circumstances that may lead to a vacancy:

• Strategic succession plan: Prepares future leaders and employees for critical roles as business goals and workforce needs change.
• Emergency succession plan: Identifies interim replacements and responsibilities if a key employee leaves unexpectedly or becomes unavailable.
• Departure-defined succession plan: Prepares for known departures, such as retirement, planned resignation or an internal promotion.
• Knowledge-based succession plan: Focuses on transferring specialist knowledge, skills and organisational experience before an employee leaves.

How to create a succession plan in 7 steps

7 Steps to Create an Effective Succession Plan

1. 1Identify critical roles
2. 2Define the skills
3. 3Identify potential successors
4. 4Assess successor readiness
5. 5Create employee development plans
6. 6Prepare for vacancies
7. 7Review and update the succession plan

Creating a succession plan involves identifying critical roles, assessing potential successors, and preparing employees to take on future responsibilities. A structured succession planning process helps HR teams address skills gaps, prepare for planned or unexpected vacancies and maintain business continuity.

Step 1: Identify critical roles

Start by identifying the roles that have the greatest impact on business operations, strategic goals and organisational knowledge. These roles may include senior leaders, department heads and employees with specialist skills that are difficult to replace.

Assess each role based on:

• The impact of a vacancy on business operations.
• The availability of employees with the required skills.
• The time and cost needed to recruit a replacement.
• The level of specialist knowledge or decision-making authority the role requires.

For example, a manufacturing company may prioritise its plant manager and maintenance engineering lead because losing either employee without a suitable replacement could disrupt production. Prioritising critical roles helps HR teams focus succession planning efforts where a vacancy would create the greatest risk.

Step 2: Define the skills and competencies required

For each critical role, define the skills, knowledge, experience and behaviours a successor will need. This creates a consistent basis for evaluating potential successors and identifying development needs.

A role profile should include:

• Technical knowledge and role-specific skills.
• Leadership, communication and decision-making abilities.
• Relevant qualifications and professional experience.
• Responsibilities that require specialist knowledge or business context.

For example, a future finance director may need experience in financial forecasting, risk management, budgeting and reporting to senior leadership. Defining these requirements helps HR teams assess candidates against the demands of the target role rather than relying only on their current performance.

Step 3: Identify potential successors

Identify employees who have the skills, experience, performance record and capacity to develop into critical roles. Consider candidates from different departments where their transferable skills and career interests align with the requirements of the target position.

Use evidence such as performance reviews, competency assessments, career discussions, project outcomes and feedback from relevant managers. Avoid selecting successors based only on tenure, personal relationships or strong performance in their current roles.

Where possible, identify more than one potential successor for each critical position. This reduces reliance on a single employee and gives the organisation more options when a vacancy arises.

Step 4: Assess successor readiness

Assess how prepared each potential successor is to take on the target role. Compare their current capabilities with the role requirements, identify any skills gaps and record the evidence behind the assessment.

A readiness assessment should consider:

• Demonstrated skills and relevant experience.
• Performance in assignments that reflect the target role.
• Leadership and decision-making capability.
• Experience with the responsibilities the employee has not yet handled.
• Development needs and the time required to address them.

How to rate successor readiness

A readiness framework helps HR teams communicate how soon an employee may be able to take on a critical role.

Readiness rating	Meaning	Recommended action
Ready now	Demonstrates the capabilities required to perform the role	Validate the assessment and prepare a transition plan
Ready within 1–2 years	Has a strong foundation but needs further experience or development	Assign targeted development activities and review progress
Ready within 3–5 years	Requires broader experience or significant capability development	Create a longer-term development plan
Not yet assessed	Insufficient evidence is available to determine readiness	Gather assessment evidence before assigning a rating

See StaffCircle’s guide to succession planning without the 9-box grid for further context.

Step 5: Create employee development plans

Create an individual development plan for each potential successor based on the skills gaps identified during the readiness assessment. The plan should specify what the employee needs to learn, how they will gain the required experience and when progress will be reviewed.

Development activities may include:

• Mentoring and coaching: Learn from experienced leaders who understand the target role.
• Job shadowing: Observe how current role holders manage decisions and responsibilities.
• Stretch assignments: Take ownership of projects that build relevant skills.
• Acting-up opportunities: Cover selected responsibilities during planned absences or temporary vacancies.
• Cross-functional experience: Work with other departments to understand wider business operations.

For example, an employee preparing for a head of operations role could lead a cross-departmental improvement project and take responsibility for a defined budget. Their manager can assess the results against the target role’s competencies and update the development plan accordingly.

Step 6: Prepare for vacancies and knowledge transfer

A succession plan should cover both expected departures and unexpected vacancies. Identifying a potential successor is not enough; the organisation also needs a clear process for transferring responsibilities, preserving knowledge and maintaining essential operations.

For each critical role, document:

• Interim cover and delegated decision-making authority.
• Key responsibilities, processes and ongoing projects.
• Important internal and external stakeholder relationships.
• Essential systems, records and specialist knowledge.
• Handover arrangements and escalation procedures.

For example, if a senior engineer plans to retire, the organisation can schedule knowledge-transfer sessions, document maintenance procedures and give the identified successor supervised responsibility for critical tasks before the departure date.

Step 7: Review and update the succession plan

Succession planning is an ongoing process. Review the plan regularly to confirm that critical roles, potential successors, readiness ratings and development priorities still reflect the organisation’s needs.

HR teams should review:

• Whether identified successors have completed their development activities.
• Whether employees have demonstrated the required competencies.
• Whether critical roles or business priorities have changed.
• Whether new employees should enter the succession pipeline.
• Whether interim cover and knowledge-transfer arrangements remain suitable.

A quarterly review can provide a useful starting point, with additional reviews after significant organisational changes, promotions or departures. The review frequency should reflect the importance of the roles and the pace of change.

Succession planning template: What to include

A succession planning template helps HR teams document critical roles, potential successors, readiness assessments and development actions in a consistent format. It gives managers and HR stakeholders a shared record of succession priorities and the steps required to prepare employees for future roles.

An effective template should include the following fields:

Template field	What to record
Critical role	Job title, department and current role holder
Business impact	Consequences of an unexpected vacancy
Required competencies	Skills, experience and qualifications needed
Potential successors	Employees being considered for the role
Readiness rating	Assessed readiness and supporting evidence
Development gaps	Skills or experience the employee still needs
Development actions	Training, mentoring, projects or job shadowing
Action owner	Person responsible for each development activity
Target and review dates	Expected completion and reassessment dates
Contingency arrangements	Interim cover and knowledge-transfer requirements

The purpose of succession planning

Succession planning is a vital process for identifying and developing potential future leaders within your organisation. Yet many businesses fail to properly implement this process, missing out on potential new leaders from their workforce.

Succession planning accomplishes a variety of objectives that help leaders reach their full potential while driving a series of benefits for the company at large. While succession planning is most often associated with developing future leaders and senior managers, it can be applied to any role within the company.

For example, certain business-critical roles which may require lengthy recruitment steps to replace will benefit a great deal from succession planning. HR leaders can adopt a targeted approach to succession planning, a generalist approach targeting a “pool” of roles, or a blended approach that encompasses a range of roles.

The benefits of effective succession planning

Well-executed succession planning brings with it a range of benefits, including:

• Reducing the risk of losing long-time employees who possess critical information and expertise vital to the company’s performance.
• Maintaining business continuity and minimising disruption by filling job vacancies quickly with personnel familiar with the organisation’s structure.
• Improving employee retention, offering a clear path for career progression where leadership potential is valued.
• Emphasising the importance of nurturing leadership throughout the company and understanding where the most talented employees are.
• Saving time and money by not looking for external candidates to fill a role, with less recruitment costs and a streamlined onboarding process.
• Motivating employees to build a comprehensive skills stack and focus on their personal and professional development.

By using these and other methods to develop potential leaders, employees can be confident their future success is a priority for the company. A transparent succession planning process builds trust and enhances the motivation to improve.

What is the process of succession planning in HRM?

For an effective succession planning process, as an HRM, you need to do the following:

• Identify the roles that are open or will be open soon
• Review the talent for people best suited to these positions
• Improve the skill gaps and provide leadership training
• Create a pipeline with multiple potential successors

With this proactive approach, you will ensure a smoother transition during management changes. Along with this, the executive succession planning process can be a career map for employees who want to seek a long-term career with your organisation.

Being a part of the succession planning process can act as a motivator. For HRM, having well-trained successors in place is a must to reduce risks and disruptions, and save on the cost of hiring new management recruits.

For better effectiveness, let’s evaluate the various approaches.

Best practices for effective succession planning

Effective succession planning requires a combination of data-driven insights and a people-centric approach. An objective and unbiased identification approach should be combined with a holistic approach to employee career development. Emerging leaders should be picked out from the crowd as early as possible, so their potential and ability can be nurtured.

There are some effective approaches to succession planning which some businesses adopt. These include:

Strategic leader development

Strategic leader development begins with identifying the company’s defining vision, then recruiting those who have the appropriate managerial skills to carry that vision out. This is an ongoing and proactive approach to succession planning, rather than one which reacts to a sudden void in a given leadership position.

Departure-defined succession

Whereas strategic leader development is a continual process, departure-defined succession activates when a leader announces their resignation. At this point, the succession process kicks into action, defining priorities and searching for a new leader. Typically, this approach to succession planning is carried out only for senior leadership positions.

Emergency succession planning

If a business leader dies unexpectedly, or otherwise vacates their position at very short notice, protocols for succession need to be in place. This is where emergency succession planning comes in. Roles and responsibilities are clearly defined so that continuity of business operations can be assured.

1. Identify talent across the organisation

Look beyond senior leadership teams when identifying potential successors. Employees in different departments may have transferable skills, specialist knowledge or leadership abilities that make them suitable for future critical roles.

Identify your rock stars

A company’s A-players can define failure or success. Understanding which employees are – or have the potential to be – A-players is essential if business leaders want to beat their competition. These star players are worth their proverbial weight in gold, responding to complex challenges, uniting teams and departments, and being able to succeed under pressure.

These A-players are also potential future leaders, so identifying them and nurturing their talent should be a top priority. Managers and team leaders can ask several questions of their employees, which can help to pinpoint who the workplace rock stars actually are.

• Have they successfully managed big projects?
• Have they been promoted at least once in the company?
• Do they demonstrate an ability to shift from one role to another notably different role?
• Are they confident and assertive without being arrogant and overbearing?
• Do they demonstrate a commitment to ongoing learning and development?
• What is their attendance record and overall commitment to the company like?
• Have they shown an ability to effectively delegate tasks to the best candidates?

Performance management software can also be used to help business leaders identify those employees best suited for leadership development. The tools available can also identify those key positions which require a thoughtful succession planning process.

Aspects of employee performance that performance management tools can evaluate include:

• Success in achieving objectives and key results (OKRs) and key performance indicators (KPIs)
• Training, qualifications and other indicators of their existing talent stack
• Absence, sickness and overtime history
• Manager-to-peer awards and recognition
• Awards and recognition from peers and colleagues
• Visual representation of employee performance and
• Cultural alignment with Success Circles (superior to the 9-box grid method)
• Position on performance leaderboards
• Level of interaction across various communications platforms
• Analytics and reports across a range of other performance-related metrics

All the above measures can, in combination, paint an accurate picture of where talent lies within the workforce. Once these high-potential employees have been identified, they can be integrated into an overall succession planning process.

Additional read: 10 Key Tools and Techniques for Performance Management

Look at your entire organisation

It isn’t always necessarily obvious who the most suitable person for a leadership role is at first glance. At the same time, in large companies, the best candidate for a role might come from a completely different team or department to the one where the position needs to be filled.

This is why effective succession planning should cast a wide net and consider potential candidates from the entire organisation. HR databases and analytics can provide a useful starting point for this process.

This can include:

• Using the HR people database to create an overview of which employees might be best suited for leadership development. Such a database will also give clear information on their attendance, appraisals and a record of their training.
• Understanding where these candidates work within the company through departmental and organisational charts. By seeing which teams and departments have the best talent, decisions about succession aren’t restricted to one area of the company.
• Performance management timelines can give a clearer understanding of which employees have been improving over time. This helps to pinpoint those who are continually improving and might be most responsive to leadership initiatives.
• Employees who are highly rated by their peers, communicate clearly and effectively, and get great feedback can be identified through HR reporting. These reports can be easily viewed through a performance management dashboard covering a wide selection of metrics.

2. Invest in continuous employee development

Identifying a potential successor is only the first step. Employees need opportunities to build the skills and experience required for their future responsibilities.

Nurturing internal talent

Identifying and nurturing talent sits at the core of effective succession planning. A program of talent retention complements this process. This ensures that A-players who are given the resources to develop their leadership potential don’t take those skills elsewhere.

There are a variety of ways leaders can build internal talent without losing business focus. These include:

• Creating a shared vision through alignment. Aligning individual goals with organisational objectives can be achieved in a number of ways. Putting together Personal Development Plans (PDPs) can be an effective method for bringing a high-performance employee’s professional aims in line with the company’s mission.
• Creating opportunities for growth through stretch assignments. Star players are at the peak of performance when their abilities are stretched to the limits. By offering them chances to work on ambitious, challenging projects, they are given additional avenues for growth.
• Communicate and coach frequently. Leadership development is an ongoing process which requires ongoing interaction to succeed. Positive feedback should flow to these employees on a daily basis, with clearly communicated objectives.
• Create a company culture which emphasises the importance of nurturing talent. One issue with succession planning can be having the perfect candidate for the role sitting right under your nose, but not realising it’s there. Employees need to be aware of the opportunities which are available to them, which includes placing the nurturing of talent front and centre in the company’s culture.

By nurturing your internal talent and developing potential future leadership, succession planning becomes a more streamlined process. When key positions need to be filled, HR leaders and managers can draw upon an internal pool of candidates who are already up to speed on what these positions entail.

3. Use consistent and evidence-based assessment criteria

Apply the same role-related criteria when assessing potential successors. Consider relevant skills, experience, performance, leadership capabilities and demonstrated readiness for the target role.

Using 360-degree feedback to gain additional insights into potential leaders

An employee’s ability to effectively lead can often go hidden from upper management. But the colleagues they work with directly can have a unique perspective on their performance. 360-degree feedback gives business leaders and senior managers much-needed insights into these qualities.

360-degree feedback is an important element of successful talent management and leadership development. Customised questionnaires can be sent to everyone who works alongside a potential leader to deliver a holistic overview of how they perform.

Such questions can include:

• Do they contribute to an environment where success is possible?
• Do they provide resources to help others achieve their goals?
• Are they effective at removing obstacles which might hinder success?
• Are they supportive and mindful of health and well-being?
• Do they consistently deliver constructive feedback?
• Is this person approachable when faced with problems?
• Do they communicate well with other employees?

Additional read: Compact Guide to 360-degree Feedback

4. Promote fairness and equal opportunity

Give eligible employees a fair opportunity to be considered for future roles. Make the required competencies and assessment criteria clear, and review whether assumptions about age, background, working arrangements or career paths influence succession decisions.

Openness, fairness and diversity

As with any hiring decision-making, succession planning should be conducted openly and fairly. A merit-based approach to diversity can also be adopted, allowing employees of all genders, ethnicities and races the opportunity to grow within the company.

Diverse leadership teams can help to build confidence and motivation within an organisation, especially when these positions are appointed based on merit rather than demographics. It shows the company recognises all talent wherever they see it, as well as a readiness to incorporate fresh perspectives.

Such diversity can also improve your company’s brand image, building a leadership team that reflects the composition of its customer base. This diversity can also help to reduce bias in decision-making processes, ensuring that potential talent within the company is identified and nurtured as broadly as possible.

Succession planning examples for UK organisations

Succession planning looks different across industries because each organisation has different operational risks, specialist skills and leadership requirements. The following illustrative UK workplace scenarios show how organisations can apply succession planning to prepare for critical vacancies.

1. Care homes: Preparing future registered managers

A care home operator needs to prepare for the planned departure of a registered manager. The role requires leadership skills, knowledge of care standards, staff management and responsibility for day-to-day operations.

Succession planning outcome: The organisation can identify capability gaps before the departure and plan a transition that supports continuity of care.

2. Manufacturing: Retaining specialist technical knowledge

A UK manufacturing business relies on an experienced maintenance engineering lead who understands specialist production equipment. Their departure could leave the organisation without the knowledge needed to diagnose faults and maintain equipment.

Succession planning outcome: The business reduces its dependence on one specialist and prepares employees to take on essential technical responsibilities.

3. Professional services: Developing future department heads

A professional services firm expects to promote a department head into a senior leadership position. The existing role requires client relationship management, team leadership, budget responsibility and operational planning.

Succession planning outcome: The firm builds a pipeline of employees with the experience needed for future leadership positions.

4. Senior leadership: Preparing for board-level transitions

A UK-listed company reviews its future leadership needs as part of its governance arrangements. It assesses the capabilities required for senior management and board roles, identifies potential candidates and considers development needs and continuity arrangements.

Succession planning outcome: The organisation has a documented approach to leadership continuity and can identify gaps to address before a transition.

These examples are illustrative, not verified case studies of specific UK organisations. Each organisation should adapt its succession planning approach to its workforce, role requirements and business risks.

Conclusion: Prepare your organisation for future role changes

Succession planning helps organisations prepare for employee departures, retain essential knowledge and develop people for future responsibilities. By identifying critical roles, assessing potential successors and addressing skills gaps, HR teams can reduce disruption and maintain business continuity.

A succession plan also needs regular reviews, clear development actions and documented knowledge-transfer arrangements. StaffCircle’s succession planning software can help HR teams track critical roles, assess employee readiness and manage development plans in one place.

Prepare your workforce for future opportunities and critical role changes with StaffCircle. Book a demo

Frequently asked questions

1. What is succession planning and why is it important?

Succession planning is the process of identifying where potential future leaders exist in the company and delivering the training to prepare them for the role. While succession planning is typically used for leadership positions, other business-critical roles can also be included in the process.

2. What are the examples of succession planning?

The principal type of succession planning is for senior leadership positions. These are the key positions that are essential for the smooth running of the organisation at the highest level.

Non-leadership succession planning can include putting in place successors for roles vital to the organisation’s success. This can include roles with a high degree of technical understanding, and other niche roles which require specialisation.

3. What are the key elements of succession planning?

Successful succession planning requires a number of key steps. These include:

• Taking a proactive position
• Understanding the requirements of the role in detail
• Identifying potential candidates
• Giving the training and resources needed to bring them up to speed
• Performing trial runs and shadowing of potential candidates
• Integrating succession planning into the company’s recruitment strategy

4. Why is succession planning useful in HR?

HR departments typically have greater clarity regarding the organisation’s strengths and weaknesses. As such, they are in the best position to help manage successful succession planning.

They can use their internal records to map where relevant skills and experience lie, shortlisting potential leadership candidates. They can also help with cross-departmental succession planning to ensure the best candidates are selected, regardless of where they are in the company.

5. What is the leadership succession planning process?

Leadership succession planning requires a deep understanding of the duties and expectations in a given leadership role. By working closely with the current post holder, business leaders can build a talent pool throughout the workplace so successors are properly equipped with the skills needed for leadership positions.

6. What is the difference between succession planning and replacement planning?

Succession planning identifies and develops employees for future critical roles. Replacement planning focuses on finding someone to fill a specific role when the current role holder leaves or becomes unavailable. Succession planning takes a longer-term view of talent development, while replacement planning prioritises immediate role coverage.

7. Who is responsible for succession planning: HR, the CEO or line managers?

Succession planning is a shared responsibility. HR manages the process, provides assessment frameworks and tracks development plans. The CEO and senior leaders identify critical roles and set priorities, while line managers assess employee capabilities, provide feedback and support development.

8. What should a succession planning template include?

A succession planning template should include critical roles, required competencies, potential successors, readiness ratings, development gaps, development actions, responsible owners, review dates and contingency arrangements. It should also record progress so HR teams can track successor readiness and address gaps.

9. How can small businesses do succession planning with limited resources?

Small businesses can start by identifying a few roles that would be difficult to replace or that are essential to daily operations. Document key responsibilities, identify employees who could develop into those roles and use mentoring, job shadowing and cross-training to build skills. Review the plan regularly and document essential processes to reduce reliance on individual employees.

10. Why do succession plans fail, and what are the most common mistakes?

Succession plans can fail when organisations identify successors without assessing their readiness, neglect employee development or fail to update plans as roles and business needs change. Other common mistakes include relying on one candidate, using inconsistent assessment criteria and overlooking knowledge transfer. Regular reviews, clear development actions and contingency plans help address these risks.

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