This document discusses best practices for succession management and employee retention. It explores current trends showing many upcoming retirements and skills shortages. Effective succession management focuses on individual development aligned with organizational strategy. It identifies high potentials and provides career development, rather than just filling positions. Regular talent reviews and leadership assessments help develop successors and retain top employees. Measuring outcomes ensures the process works to prepare internal candidates for future leadership roles.

1. Best Practices ofBest Practices of
Succession ManagementSuccession Management
and Employee Retentionand Employee Retention

2. Questions To Consider...Questions To Consider...
What % of your employees will
retire in the next 5 years?

3. Questions To Consider...Questions To Consider...
What % of your employees are
looking for other employment?

4. So…what are you planningSo…what are you planning
to do about it?to do about it?

5. Session ObjectivesSession Objectives
Briefly explore current trends
Understand succession management
versus succession planning – and the
alignment to employee retention
Understand best practice processes and
examine a few of the tools and
methodologies being used
Discuss the roadblocks and benefits of
implementation
Explore how to get started

6. Why the Interest inWhy the Interest in
Succession Planning andSuccession Planning and
Employee Retention?Employee Retention?
 Numbers of people retiring and numbers of
people entering workforce
 Loss of organizational memory
 Skills shortages are acute
 Retention of talent
 Future of work – different needs for generations
of employees
 What else?

7. Trends and Forecasts*Trends and Forecasts*
By 2008, more people will be leaving the
workforce than entering
44% of workers aged 45-59 say they will
retire before 65
10% of workers aged 50-59 who leave full
time jobs, move into part time within 2
years
1/3 of workers aged 50-59 who leave full
time jobs, move back into full time
* Statistics Canada research

8. Trends and Forecasts*Trends and Forecasts*
72% of companies predict they’ll have
an increasing number of leadership
vacancies over the next 3-5 years
76% of those same companies are “less
than confident” in their abilities to
adequately staff these positions
* Corporate Leadership Council research
(reported by The Gallup Organization)

9. Current Economic IssuesCurrent Economic Issues
Workplaces will lose high performers as
economy strengthens
Currently, workplaces that understand
future skills needed are having difficulty
recruiting
Recruitment strategies are strengthening
Retention of talent is increasingly
becoming a “hot” issue

10. The Internal ChallengeThe Internal Challenge
Who is going to do the work?
What knowledge are we about to lose?
What skills will we lose?
What traditions will change? Is this good?

11. The External ChallengeThe External Challenge
The market place for good talent will be
competitive
The good people will be able to pick and
choose their working environment
How do we create an organization in where
people want to stick around?

12. Who is responsible toWho is responsible to
ensure you have the peopleensure you have the people
to get the job done?to get the job done?

13. Shift from Industrial Age toShift from Industrial Age to
Information AgeInformation Age
The Old Way
HR is responsible for people management
We provide good pay and benefits
Recruiting is like purchasing
Development happens in training
programs
We treat everyone the same
Source: “War for Talent”

14. Shift from Industrial Age toShift from Industrial Age to
Information AgeInformation Age
The New Way
All managers are accountable for
strengthening their talent pools
We shape our workplace, jobs, and strategy
to appeal to talented people
Recruiting is like marketing
We fuel development through stretch jobs,
mentoring and coaching
We affirm our people, but invest differently
in A, B, and C players
Source: “War for Talent”

15. Questions To Reflect OnQuestions To Reflect On
If the dam bursts today, what is the
impact to your organization?
How would you replace the people,
knowledge, lost productivity?

16. One Approach…One Approach…

18. It’s not just about havingIt’s not just about having
the bodies.the bodies.
It’s about theIt’s about the rightright bodiesbodies
doing thedoing the rightright things.things.
Creating an organization ofCreating an organization of
which people want to be a part.which people want to be a part.

19. Retention:Retention:
What keeps employeesWhat keeps employees
happy?happy?

20. Current Retention TrendsCurrent Retention Trends
Towers Perrin (2002) Canadian study
59% are open to changing jobs
11% actively looking
45% passively looking
“To retain me, you’ve got to help me advance,
keep the good people, and provide competitive
pay….”

21. Top 15 Retention DriversTop 15 Retention Drivers
Retention Items %
1. Exciting work & challenge 48.4
2. Career Growth, Learning & Development 42.6
3. Working with great people & relationships 41.8
4. Fair pay 31.8
5. Supportive management/great boss 25.1
6. Being recognized, valued & respected 23.0
7. Benefits 22.0
8. Meaningful work, making a difference & contribution 17.0
9. Pride in organization, its mission & product 16.5
10. Great work environment / culture 16.0
11. Flexibility 13.6
12. Autonomy, creativity and a sense of control 12.6
13. Job security & stability 10.5
14. Location 10.3
15. Diverse, changing work assignments 7.7
Source: Career Systems International, 2005

22. Other ResearchOther Research
Retention Items
1. Career growth, learning and development
2. Exciting work and challenge
3. Meaningful work, making a difference and a contribution
4. Great people
5. Being part of a team
6. Good boss
7. Recognition for work well done
8. Fun on the job
9. Autonomy, sense of control over work
10. Flexibility – for example, in work hours and dress code
11. Fair pay and benefits
12. Inspiring leadership
13. Pride in organization, its mission and quality of product
14. Great work environment
15. Location
Source: Love ‘Em or Lose ‘Em, 1999

23. Understanding the DataUnderstanding the Data
Employees are looking for job growth and
learning opportunities, or they are looking
for a new job
Are you offering the items on these lists to
your employees?
As managers in your organization, how
many of these items do you believe are
within your control?

24. Understanding the Data – LinkUnderstanding the Data – Link
to Recruitmentto Recruitment
Attraction is part of retention, so this
information also informs recruitment
practices
Employees will be attracted to
organizations that have well-developed
mentoring programs, career development
initiatives, and job enrichment opportunities

25. Link to EmployeeLink to Employee
EngagementEngagement
Research shows positive correlation of
engagement scores with:
Employee attraction and retention
Engagement scores also have a positive
correlation with:
Customer satisfaction
Revenue growth and shareholder returns
Employee productivity
Employee attendance

26. What is Engagement?What is Engagement?
SaySay StayStay StriveStrive
Speak positively
about the organization
to co-workers,
potential employees
and customers.
Have an intense desire to be
a member of the
organization.
Exert extra effort & are
dedicated to doing the very
best job possible to
contribute to the
organization’s business
success.
EngagementEngagement

27. Calculating EmployeeCalculating Employee
EngagementEngagement
I would, without hesitation, highly recommend this organization
to a friend seeking employment.
Given the opportunity, I tell others great things about working
here.
It would take a lot to get me to leave this organization.
I hardly ever think about leaving this organization to work
somewhere else.
This organization inspires me to do my best work every day.
This organization motivates me to do more than is normally
required to complete my work.
SaySay
StayStay
StriveStrive
Scores from the following six questions are used to
calculate the engagement score:

29. Succession Planning:Succession Planning:
Helping you understandHelping you understand
whowho to focus onto focus on

30. QuickPoll…
Who has:
No succession planning in place?
Succession planning in place, but not sure it
is, or will be, successful?
A successful succession planning initiative?

31. The Traditional Approach toThe Traditional Approach to
Succession PlanningSuccession Planning
Often highly political
Little thought given to what kind
of leaders required in the future
Done secretly
Focus on putting names in boxes
(“replacement”)
Few conversations held

32. Results of This Approach toResults of This Approach to
Succession PlanningSuccession Planning
Strategies become academic and
administrative exercises. Change happens
and rigid plans are not applicable – a
waste of time and money
Little focus spent on the development
of individuals

33. A Different Way to ThinkA Different Way to Think
About Succession PlanningAbout Succession Planning
Succession management is a process of
ensuring there are leaders and talent that
can implement the organizational vision
It requires the systematic identification of
those individuals who have the potential
to turn the vision of the organization into
reality

34. Elements of an EffectiveElements of an Effective
Succession ManagementSuccession Management
Process*Process*
1.
Individual Career
Planning and
Development
2.
Succession
Planning
Analyses
3.
Group Discussion
and Review
* The Gallup Organization

35. Succession ManagementSuccession Management
Focus on individual development
strategically aligned to future vision
Leadership development can ensure that
the potential identified through succession
process is realized
Result is long-term leadership
sustainability through attraction, retention
and development of talent

36. Succession ManagementSuccession Management
A key strategic initiative
Cannot be done in isolation to other
cultural and people oriented initiatives
in the organization
More than just “putting names in
boxes”

37. Succession ManagementSuccession Management
Focus on integrating many elements of
organization development
High level steps need to be customized for
each organization
“Leadership Pool” approach is gaining in
popularity (identifying all potential
employees vs. positional replacements)

38. “There are no recipes or formulae, no
checklists or advice that describe
“reality”. There is only what we
create through our engagement with
others and with events.”
(Margaret Wheatley,
“Leadership and the New Science”)

40. Vision and CompetenciesVision and Competencies
Alignment to vision and strategy
Business plan for succession initiatives
Succession and leadership aligned to the
vision, critical business issues/skill gaps
Executive commitment
Develop leadership competencies
Develop a succession management
roadmap

41. Need for a RoadmapNeed for a Roadmap
Implementing succession initiatives
impacts culture
A roadmap shows how to get there
“Without a roadmap, the likelihood is that
you will focus too much attention on details
and miss the ‘big picture’.”
(William Rothwell)

42. Talent Review ProcessTalent Review Process
An interactive dialogue and discussion to
support the performance and potential of
talent in the organization
A process to look at key talent, open
positions, promotions and leadership
development
Discussion to support shared ownership
of the talent pool and development
opportunities

43. Talent Review ProcessTalent Review Process
Robust Talent Review (“War for Talent”):
Full day on-site for each division
Discuss quality of incumbents
Review individuals and the talent
strength of each unit, and discuss other
issues such as retention or recruiting
Rigorous, candid and open debate

44. Talent Review ProcessTalent Review Process
Robust Talent Review, continued:
Drive to a distribution of ratings
Specific action plans written and
followed up for each unit
As important and intense as the budget
process, with real accountability and a
performance focus

45. Talent Review RoadmapTalent Review Roadmap
QuestionsQuestions
How far down in the organization? What
groups?
High potentials or everyone?
Replacement or pool – or both?
Assess on performance and potential
Other assessments required?
Who will assess? Do they have the skills
to assess?

47. Pool versus ReplacementPool versus Replacement
Identifying “bench weakness” (e.g.
managers, technicians)
Assess individuals
Develop as pool – stretch
assignments, leadership development
Track progress

48. Folio MapFolio Map
Potential
Performance
3.6
3.6
High Performance/ High Professional
New in Position/High Potential High Performance and Potential
5.0
5.0
Outplacement
Needs Improvement
Competent/ Capable
2.6
0

49. Identifying High Potentials
High
Low High
Potential
Performance
J
J
J
JJ
J
J JJ
J
J
J
J
J
J
J
J
J
J
J
J
J
JJ
J
J
J
J
J
J
J
J
J
J
J
J
J
J
JJ
J
J
J
J
J
J
J
J
J
J
Our leadership
“Talent Pool”
The “bar” is a rating
of 3.6 or above on
potential
Must be at least
competent in each
of the Standards of
Leadership
3.6
1.0
5.03.61.0

50. Folio MapFolio Map
Permits participants to identify
specific developmental actions for
employees
Assists conversations regarding next
steps
Shows progress from year to year

51. Critical Positions/People*Critical Positions/People*
Critical Position – A critical position in the
organization that is imperative to running
the business. Key strategic importance to
have back fill.
Critical Person – A critical person in the
organization which would result in a
significant adverse impact on the
business if the person left.
* Johnson & Johnson definitions

52. Example
Multi-level ownershipMulti-level ownership
CEO
Reviews plan to monitor corporate future
President/Sr. VP
Review functional plans & Develops Company level plan
Functional Area/Company Managers
Identifies high potentials across area
Drafts succession plan
Manager
Discussion with employee & functional manager re. development/succession
Employee
Create Development Plans & Performs Leadership Assessment

53. Succession
Management
Retention
??

54. File it away…File it away…

55. Start having conversations!Start having conversations!

56. Great LeadersGreat Leaders
Make AMake A
Great DifferenceGreat Difference

57. Leadership EffectivenessLeadership Effectiveness
and Turnoverand Turnover
19
9
14
8
10
12
14
16
18
20
22
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
TurnoverPercent

58. Leadership EffectivenessLeadership Effectiveness
and Retentionand Retention
19
51
79
0
10
20
30
40
50
60
70
80
90
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
IntentiontoStaywith
Company(%)

59. Leadership EffectivenessLeadership Effectiveness
and Customer Satisfactionand Customer Satisfaction
21
50
82
0
20
40
60
80
100
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
RatingsofCustomer
Satisfaction(%)

60. Making LeadershipMaking Leadership
Development WorkDevelopment Work
 Identify, inform and invest heavily in talent
 Use 360s to build on strengths
 Set extremely high expectations for your
leaders – and measure their results
 Make leadership development a long term
process and not an event
 Use the succession process as an
opportunity to develop and measure the
leadership potential

61. Senior Management RoleSenior Management Role
 Responsible for succession process
 Approve high potentials, individual
development, leadership development
 Determine success measures, next
steps and time frames
 Determine management
accountability
 Follow-up on actions

62. MeasuresMeasures
 Define up front what you want to
achieve in the broader scope
 Then…once succession data gathered,
define specific measures, timing and
accountability. Measure regularly.
 Track development of talent, and their
progress, regularly over the long term.
Assign accountability to managers for
progress, assign mentors, reward

63. Possible SuccessionPossible Succession
MeasuresMeasures
 By ___ 90% of development actions complete
 Increase movement of high potentials to other
areas of workplace
 Increase employee engagement/satisfaction
 By year 20xx, increase high potential leaders by
x%
 Over x years, increase high potential retention by
x%
 External measures - attract high potentials

64. Employee ConversationsEmployee Conversations
What needs to happen
in these conversations?

65. Individual DevelopmentIndividual Development
PlanningPlanning
Actions
Goals and measures
Follow-up, follow-up, follow-up

66. More Best Practices (Hewitt)More Best Practices (Hewitt)
Senior management lead the charge
Maniacal focus on the best talent
High potentials are carefully identified
Compensation is highly differentiated
Assignments drive high potentials’ growth
Tracking progress is critical

67. ChallengesChallenges
Time
Buy-in
Lose sight of big picture –
administrative nightmare
Employee/manager conversations
Cultural biases
Resource issues that arise

68. Results of Implementing
Succession Management
A high-performance culture that
continuously attracts and retains the right
people
Strong leaders who can develop others
Mentors that can provide a legacy
A culture of openness and focus

69. Results of Implementing
Succession Management
No “unspoken agenda” concerning
individuals’ aspirations and potential
Investor confidence – Hay (1988) and
McKinsey (1999) studies link effective SM
to increased ROI and annual return to
shareholders

70. Keys to SuccessKeys to Success
Top management must buy-in and be
active participants
Link succession efforts to needs and
strategic objectives of the business
Minimize paperwork and bureaucracy
Make succession and leadership
development a constant preoccupation

71. Keys to SuccessKeys to Success
 Identify high potential talent early –
devise strategies to retain that talent
 Recognize that effective succession
management is not fast
 Spend time to evaluate results and
provide feedback to stakeholders

72. Keys to SuccessKeys to Success
 Ensure leaders have an opportunity to
apply the skills they are learning
 Ensure everyone is, and can be,
responsible for their own development
 Ensure effective role modeling of
leadership excellence
 Measure behaviour change

73. DiscussionDiscussion
Where should we start?
What will be easy?
What will we stumble
over?

74. ResourcesResources
 “War for Talent” – McKinsey & Co.
 “Leadership Pipeline” – Ram Charan
 “Grow Your Own Leaders” – W. Byham
 “Effective Succession Planning” – W. Rothwell
 “Love ‘Em or Lose ‘Em” – Kaye & Jordan-
Evans
 Centre for Creative Leadership – www.ccl.org
 Statistics Canada – www.statcan.ca/
 “The Extraordinary Leader” – Zenger &
Folkman