Key Issues in Succession Planning

Type: 
Best Practice
Approved by GFOA's Executive Board: 
February 2011
Background: 

Many governments face the challenge of ensuring continuity and consistency of service delivery due to employee turnover. In instances where large numbers of government employees are eligible to retire, there is a concern that not enough qualified or available workers will be prepared to replace them.

Recommendation: 

GFOA encourages governments to address the following key issues and develop strategies concerning succession planning.

  • Develop an integrated approach to succession management. Organizations with an integrated, rather than “just-in-time,” approach to succession management experience higher retention rates, increased employee morale, and an environment that stimulates innovation and orga¬nizational change. There are some positions in an organization that are more critical than others. A successful succession plan should place a high priority on planning for a smooth change in such positions.  Key components of an integrated succession man¬agement approach include: workforce planning, succession planning, knowledge management practices, and recruitment and retention practices.
  • Continually assess potential employee turnover. Making career planning discussions a part of a regular and ongoing performance review process assists in assessing potential turnover. Department heads are a good resource in helping to identify employees that may be planning to leave.
  • Provide a formal, written succession plan as a framework for succession initiatives. Without a formal plan, workforce/succession planning tends to take place in a haphazard fashion. A formal plan identi¬fies risks and strategies, thereby providing a guiding framework for specific succession initiatives, including how employees are eligible to participate and what being part of the succession plan means. Plans that have been thoughtfully articulated and communicated to the organization are more likely to be suc¬cessful. Additionally, having a formal plan indicates organization and lead¬ership commitment to succession management, which is critical for success and for sus¬taining successful planning across political and leadership transitions. The Budget Department and the Human Resources Department should work together to develop this plan, along with other departments as needed.
  • Develop written policies and procedures to facilitate knowledge transfer. Knowledge transfer is a critical component of succession management. There should be written procedures in place to formalize the knowledge transfer. A meeting should be held with departing staff to document job responsibilities.  
  • Development of leadership skills should be a key component of any succession planning initiative. When leadership development occurs, the organization benefits from developing a leadership pool for other positions.
  • Encouragement of personal professional development activities should be a key part of the succession planning effort. Personal profession¬al development benefits the organization over the long term by helping employees gain the skills they need to assume increased responsibilities.
  • Design of better recruitment and retention practices may aid in the succession process. Many organizations will focus more on recruiting the new employee and less on orienting the person to the position and the ongoing development of the employee.  Making sure pay levels are competitive with the market place is one means of retaining employees. Providing career advancement opportunities for employees is another means of retention.
  • Consideration must be given to collective bargaining agreements and how those agreements fit in with the overall succession plan. The engagement of bargaining units for cross training opportunities is encouraged.
  • If early retirement programs are offered by your entity, it should be done in conjunction with a succession plan.  GFOA strongly recommends that governments use considerable caution when considering the implementation of early retirement plans (see GFOA’s Advisory:  Evaluating the Use of Early Retirement Incentives).   If an early retirement program is offered, that might provide a window of opportunity to look at technology, potential to streamline, or rethinking the way services are provided, managed, and/or administered.  
  • Consider non-traditional hiring strategies. Options such as part-time work, job-sharing, volunteers, and flexible schedules and flexible-place arrangements are providing mechanisms to both meet the needs of the organization and employees.
Committee: 
Governmental Budgeting and Fiscal Policy
References: 
  • GFOA's Generational Change Task Force Report, 2010.
  • GFOA Advisory: Evaluating the Use of Early Retirement Incentives, 2004.