There is a common saying that best summarizes the benefit of having a succession plan: If you fail to plan, you plan to fail.

However, when your business is thriving, when the pipeline looks sturdy and the economy looks secure, it can be difficult to stop and consider what might happen to the company if the business owner suddenly weren’t there.

The objective of succession planning is to make sure a company always has the right leaders in place if a change happens out of the blue.

By failing to create an orderly plan for succession, the company may find themselves falling behind much quicker than expected after a key personnel leaves the company or passes away.

Since none of us can anticipate when a serious illness, accident, disaster or pandemic will happen, what we can do is to prepare for what the company can implement should it happen.

Here are 3 benefits of succession planning:

1) Disaster-proofs your business

We buy insurance to protect the company from accidents like floods and fires or install security systems to prevent theft. Things like backing up data to safeguard your business’s proprietary information are small securities that  business owners get busy with in the event of an accident.

Yet most of them fail to make succession planning a priority. Especially owners who are still young and may think it is unlikely they will be hit with a serious illness. Or they forget that a key worker (or several of them) could be lured away by a competitor that needs their skills and is willing to pay top dollar for them. Any of these scenarios can leave a business in a vulnerable state quickly.

2) Succession Planning Can Save You Money

If the company wasn’t prepared for an unexpected vacancy, they risk incurring significant costs. Not only are they likely to be inefficient in the search for replacement, they may also end up needing to apportion a larger budget for the salary of the person they need to hire since it costs money to attrace qualified people away from their current jobs.

Instead, having a well-documented succession plan in place for several key positions in the company can often save the costs associated with hiring external people for leadership roles. Having a plan for promoting from within will help avoiding the a premium to fill an important position when you need to.

3) Continuity Planning Helps Maintain Board & Shareholder Trust

Maintaining the trust of the Board and shareholders is critical to a company’s success.  Being able to present a clearly defined succession plan demonstrates to them that the leadership is proactively managing the company and planning for the future.

Some stakeholders mandate that the CEO must name a successor, but the same should be mandated about the other key leadership positions. Sudden departures of other decision-makers can create a confusion and a great sense of loss in direction for the rest of the company. An unexpected vacancy in key positions can distract a business from focusing on growth and creates unnecessary distractions that clouds the business focus.

ABOUT ENABLE CONSULTING

Established in 2013, enable Consulting is a specialised hr consulting firm.

We believe that having a strong and robust HR function is a key driver for continuous growth in any successful business. It is on this belief that we have built many successful partnerships with clients across different industries.

We are a people business and it is our talent pool that defines us. Each and every one of our consultants is highly professional with many years of experience in HR management consulting and services.

Our Consultants are PMC certified to further be able to help local SMEs improve and optimise their HR operational efficiency through Singapore Grants. enable is about offering affordable, high value adding solutions to improve business performance; while at the same time nurturing and inspiring a fair and respectful working environment. But above all, enable is about enabling you.

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