The term replacement planning is often thrown into conversations about succession planning. But they're two different things. A replacement plan identifies "backups" for positions. Traditionally, it focuses on top-level positions, but it can be done for any key position in the organization.
Replacement planning comes up along with succession planning because it identifies individuals who can assume roles at some point in the future and shows how ready they are for that role. But replacement planning doesn't have to be defined as a subset of succession planning.
Today, finding talent remains a challenge for businesses. Having individuals identified as backups just makes good business sense. In 2016, the Society for Human Resource Management (SHRM) reported that average cost per hire is $4,129 and time to fill is 42 days.
Those numbers don't factor in that over 10,000 people each day reach retirement age, according to Pew Research. In addition, voluntary termination is at its highest level in 9 years. Finally, as much as we don't like to mention it, employees sometimes become unexpectedly ill or have an accident. The organization needs to find someone to take over their responsibilities...even if it's only temporary.
A certain amount of turnover is healthy for any organization. Certain types of turnover are good, such as the dismissal of a toxic employee. But organizations don't always get to control the timing and circumstances, so having a backup plan (a.k.a. replacement plan) makes sense.
7 Steps to Developing a Replacement Plan
Developing a replacement plan doesn't have to be a daunting task. It's possible you already have some of the pieces in place, it's just bringing them together. For example, If your organization has a formal succession plan, you might already have replacements identified. Or if you're using talent pools, the organization knows who the future replacements are, just not the roles they might assume. But if you're starting from ground zero, here are seven steps that can guide a replacement planning activity:
- Identify key positions. While every job is important, these are roles within the organization that would significantly impact the business if left open for a long period. If the average is 42 days, what positions must be filled in less time? Ideally, we'd like every job to be filled quickly, but identify those that must be a priority. Those key positions are a place to start.
- Identify the critical skills for each position. List the qualities that someone holding this position must have. Not a wish list - remember this is a replacement plan. If someone has the basic skills, then they can learn the other skills or knowledge required.
- Assess the skills of current employees. Hopefully, this information is already available in the form of training records, performance reviews, coaching feedback and 9-box grids. It might also be helpful to look at the skills of contingent workers or former employees who might be interested in returning.
- Match the critical skills to the current skills of employees. It might be tempting to think that backup employees are currently in the department. However, a recent transfer might be interested in returning to their former department. Focus on skills, not current job titles.
- Pay attention to jobs that don't have matches. It's possible this exercise will surface some jobs that need immediate attention, meaning there's no replacement available. While that's not a place anyone wants to be, it's better to find out while planning than when you're trying to fill an opening.
- Develop a plan to address gaps. This might include development programs, mentoring, coaching and contingent staffing - or all of the above. With replacement planning, the organization doesn't have to identify a single replacement. If you have them, use talent pools to develop transferrable skills for many positions.
- Evaluate the plan. Evaluate the plan on a regular basis to make sure the company's needs can still be met. For key positions, the individuals currently holding the roles can be help identify and train their replacement. This goal could be included in their performance review.
While organizations are working hard to hire, engage, and retain the best talent, it would be naïve to think employees never leave. Replacement plans provide the organization with comfort that a last-minute resignation, retirement, or employee illness will not leave the company disadvantaged.
Replacement plans do one other thing: They give the organization a sense of the investment they will need to make should a "backup" be necessary. Whether it's temporary or long-term, employees asked to assume greater responsibilities need support. Regular replacement planning activities make the organization keenly aware of the support the employee will need to be successful.