Succession planning is critical to the future of your business, yet most companies don’t plan for it.

It’s inevitable that people will retire, but most people ignore it. What is bringing this issue to the top of the “to do” list? It is the exiting of baby boomers from the market and the increase in early retirements during the pandemic, which has accelerated the exodus.

To start the succession planning process, know who will be retiring within two to five years, then identify internal high potentials whom you can prepare to take over.

When deciding who these people are, it is important to look at their past performance and to assess whether they have the capacity and willingness to move into a management role.

When you choose your high potentials, they might not be the highest individual producers. The skills and competencies required to manage and lead people are completely different.

Once you have identified your candidates and have confirmed their interest in a potential promotion, there are important next steps.

First you must assess their capacity for a new role. Second, you should benchmark their skills and knowledge to determine what they will need to work on in a development plan.

Assessments should include a “360” evaluation, a measure of critical thinking, numeric reasoning, emotional intelligence, personality inventory, and an understanding and knowledge of leadership and people management.

Putting a succession plan together not only ensures you will have future management in place, but also it will be unnecessary to go to the outside and figure out whether a candidate will fit in your culture.

The most important part of putting together a formal program will be the effect it will have on recruitment and retention of talent. If you are looking for one of the special ingredients to retention, it is engagement and willingness to invest in people who demonstrate potential.