What’s holding back growth in the economy, when tax cuts tempt business to expand? In part, the talent gap: the lack of qualified candidates for open positions, and the fear that as employees retire or leave for greener pastures, the ability to maintain, much less grow, headcount is uncertain.

The talent gap is real, and businesses are feeling its crunch from the C-suite down to the front lines. Succession planning — for all positions — may be an important part of overcoming the skills gap, allowing businesses to grow.

A trilogy of benefits

The belief that a company is ready to plan career growth for each hire even before they make it to their first payday is a powerful incentive for applicants.

Succession planning can have the same effect on retention. Making it clear that there’s room to advance within the company can be a tool in helping employees stay the course. Engagement can see major bonuses, as well, experts previously told HR Dive; employees who know the company is invested in their development take pride and ownership in their work.

Succession planning has gone far beyond the C-suite. Even the entry-level employees want to know where they can grow, and succession plans can map out the pathway for them. For businesses to maintain a strong management pipeline, internal succession plans and career pathways are mission-critical.

The brain drain is upon us

As the baby boomer generation continues to age and opt out of the workforce, businesses that plan for their exodus can be well-prepared for the brain drain. But succession planning need not account for their total absence. Some companies work with boomers to ease the transition with phased retirement, consulting and mentoring plans that both engage older workers and help the next generation take the reins. Succession planning has morphed into a range of strategies to help businesses (and employees) succeed today and into the future.

"Companies are suffering from a skills shortage, threatening any plans to expand operations in the wake of corporate tax cuts implemented this year, and in some cases, causing work-slowdowns," Andrew Challenger, VP at Challenger, Gray & Christmas told HR Dive in an email. One of their recent surveys revealed 76% of businesses are using professional development opportunities as a retention tool. 

"Employers need to focus equally on retaining and engaging existing employees and integrating succession planning into employee training and career development programming so employees are ready to take on increased roles and responsibilities," Sandy Mazur, division president at Spherion Staffing, told HR Dive via email. This will require a mix of training strategies based on different positions as part of the overall succession plan.

Planning ahead

Succession planning involves more than just the HR department or managers. There must be a top-down commitment to planning for growth as well as minimizing talent shortages. A culture of growth and "an environment where employees are engaged and committed starts at the top," Challenger said. Commitment will do more than avoid staffing challenges, he added: "A company that is focused on developing a healthy culture will earn their employees’ trust and build a reputation of being a place people want to work."

Getting started requires working cross-functionally with multiple stakeholders. Identifying career paths for categories of employees as well as individuals is a first step. Identifying skill sets and capabilities that can translate across departments, even across the company, can open possibilities for growth previously not considered. A critical eye to job descriptions can be enlightening in this regard.

Beyond HR and managers, it’s vital to maintain open lines of communication and understanding about the evolving needs of the business and new skills requirements along with the expectations and career plans of employees. "You can’t plan for what you don’t know, so being in touch with both the business and the employees you rely on for success is essential," Mazur said.

A wide variety of roles are ripe for succession planning, but some companies are starting to plan at the skills level, not the job level, Bhushan Sethi, of PwC’s Workforce of the Future, told HR Dive via email: "What are the 'no regrets' skills we need, regardless of job, as inevitably job tasks and jobs themselves will change through automation and AI?" He defined "no regrets" skills as both management (creativity, agility, problem solving, relationships, etc.) and technical (analytics, tech, etc.). 

The domino effect

Training younger workers to take on more senior roles must be planned for continuously, not just when a position opens up, Mazur said. When someone at the top leaves the organization, it can create openings down the food chain. "I call this the 'Domino Effect,'" she said, "and companies must plan for each and every role throughout the organization to avoid challenges in filling 'holes' created by this effect."

It’s important, too, that all roles be planned for and supported with a strategic training program and succession plan based on career paths, not individual positions, she said.

Marshaling resources

Working with external groups and schools can provide a critical pipeline for talent. As paths are created, employers have to be ready to fill the void. Most talent pipelines begin with entry-level graduates, Challenger said. Companies that recruit from this pool have an opportunity to shape people early as well as increase brand awareness and recognition if those graduates are job seeking later in their careers.

Spherion, for example, partners with local schools to train students from high schools, technical schools and colleges on job search skills. It's working to equip students with the skills to successfully identify and secure internships, part-time jobs and ultimately full-time positions with area employers.

Talent pools can be highly effective when an organization requires a group of trained employees with similar skills, roles and responsibilities, such as technical specialists and similar management roles, Mazur said. "Talent pools can be used very strategically to train and upskill talent on an ongoing basis," she said. "We look at talent pools as important investments in employees and in ensuring companies have the talent resources they need when they need them."

Succession planning certainly isn’t a one-and-done operation. It requires a commitment of time and resources. Sethi recommended reviewing plans at least quarterly — even monthly in faster changing environments or if facing a specific event. Planning for the future can put businesses in a position to go beyond maintaining staffing levels, crafting a path to growth for both the company and its employees.