Most companies know that succession planning is essential today, but very few have automated their process. According to a November 2006 Aberdeen Group report, only 7 percent of companies had a fully automated and integrated succession planning process. IT needs to recommend succession planning technologies that help senior managers make data-driven decisions on worker deployment and replacement, says David Foster, director of human capital management practice at Aberdeen. Why is an automated process key? Without a bridge to connect divisions, you basically have a bunch of little companies, Foster says.

If employees can’t see a career path for themselves and “they don’t see anywhere to move within the company, they get jobs outside of the company,” Foster says. Half the companies Aberdeen surveyed used succession planning as a retention strategy.

The problem: Succession planning doesn’t work well unless leaders can see an inventory of skills by category and job classification. You have to identify leadership potential before you can stop it from walking out the door.

“Talent inventory” software from vendors like PeopleBoard and HRCharter can give leaders a better view of the organizational chart and employees’ capabilities, but if that information isn’t included in the succession planning program, the system has to connect to HR’s management system to include performance data, Foster says. “Most companies are in the infant stages. They might have the HR/IS connection, but performance data will be on paper in a file cabinet,” he says.

But you can’t create a proper succession plan without all the data. The first step: Automate the HR database so it can be part of the strategic planning, he says.

Best Practices

Be proactive. Don’t wait until someone leaves to look into his or her replacement. Once you have a succession planning program, review it regularly. If it doesn’t positively affect retention, it’s not working.

Combine efforts. Include talent and performance management and compensation in the succession planning process. Succession planning should be directly linked to areas like training. Invest in software that ties in these processes, and includes a reporting and analytics component.

Enact the plan across the company. Succession planning isn’t just for executives anymore: Make sure the plan touches every level of the organization.

Succession Planning Needs Work

Most companies know the value of having a formal succession plan

73% have a plan, or have budgeted to start one within 12 months

26% do not have a plan

But few companies have automated the succession planning process

62% use a paper-based process