Succession Planning Challenges in 2025

Why succession planning fails? Many large businesses and enterprises typically plan for the foreseeable future to avoid any stoppages and interruptions in business operations. As a result, they tend to have contingencies to ensure operations run smoothly. Despite that, most large companies still struggle with succession plans, often ending up rushing them or undermining them.

Every company takes a different approach to succession planning but often faces the same problems. A lack of insights into employees’ skills, existing biases, and the absence of transparency usually lead to poor succession planning and talent pool scarcity.

This article will discuss succession plans and five primary reasons why they fail today. Let’s get right in.

Everything You Need to Know About Succession Plans and Succession Planning

Succession plans are future-proofing plans developed by businesses to pre-identify employees with the potential and capabilities to fill specific roles in the future. Succession plans highlight the skills needed for each role, establish precise career trajectories, and identify top talent within an organization.

Succession planning keeps critical roles covered and supports leadership development and long-term stability. Most importantly, faster hiring and faster time-to-productivity help improve employee retention. If employees know they have a bright future at a company, they are more likely to stay with the organization. Therefore, internal recruitment is a great motivator. For effective internal recruitment, it’s also crucial to work on developing critical skills in employees.

As a result, you will have improved employee retention and more skilled and motivated employees. Furthermore, you’ll see that succession planning and all that goes into it lowers your expenses in the long run. External hiring is costly and timely, and you have no idea how well they will fit with your company’s culture and processes. Alternatively, with a succession plan, you can avoid the extra hiring costs and eliminate the uncertainty of whether the employee will blend in.

The most remarkable result of a good succession plan is a boost in overall employee performance. Clear goals, skill-building opportunities, and an opportunity to grow are effective performance boosters.

What are 10 Common Pitfalls of Succession Planning for Businesses?

Effective succession planning is critical for organizational resilience and sustainability. However, many companies fall into avoidable traps that compromise the outcomes of even the most well-intentioned plans. Below are ten common pitfalls that organizations should be wary of. Understanding these issues is essential in grasping why succession planning fails and how to mitigate its impact.

1. Focusing exclusively on the executive level

   Technology moves fast, markets are anything but stable, and today’s employees want more than a paycheck—they’re looking for meaning and flexibility in their work. As a result, work has become more fluid, challenging the structures and assumptions that used to define it. Focusing only on executives can create bottlenecks in leadership pipelines and leave critical gaps during transitions. This highlights one of the key disadvantages of succession planning—limited scope.

   Widening the scope to include all key roles enables a more holistic and integrated approach. Preserving leadership continuity and institutional expertise becomes more achievable when succession planning extends beyond the executive tier. When organizations take a more inclusive approach to succession planning—looking beyond top leadership roles—they develop deeper talent pipelines. This approach also helps minimize the risks that often come with narrow or short-sighted planning efforts.

2. Using a one-size-fits-all competency framework

   Because each position carries unique responsibilities, standardized competency models often fail to match the right people to the right roles. Effective frameworks should account for the specific needs of various departments, job types, and the organization’s shifting priorities.

   Customizing competencies for each role ensures that successors are evaluated and developed against criteria that truly matter for success. You’re more likely to spot high-potential employees when assessments are tailored to the role, not stuck in outdated methods. Missing these distinctions is one of the top reasons succession plans fail.

3. Describing an idealized version of the role

   Sometimes, organizations define future roles based on ideal scenarios rather than current realities. If a job sounds too perfect, people might feel like they’re not good enough to try for it. Instead, companies should keep things real by showing the tough parts and how someone can grow. That honest approach helps employees see a future for themselves, leading to better handovers when roles change.

4. Underestimating the changing nature of work

   As technology advances quickly, markets remain unpredictable, and employees seek more purpose in their work, the modern workplace has become a dynamic space that challenges organizations to adapt. Succession plans that remain static—founded on rigid, antiquated job descriptions or traditionalist organizational design models—are rapidly rendered obsolete in the face of such profound and ongoing transformation.

   Only adaptive, responsive planning frameworks can support leadership development in a fluid context. These plans must evolve parallel to the changes impacting how, where, and why people work. Organizations increasingly need to treat succession planning as a living process routinely reviewed and updated to reflect new business realities, emerging competencies, and anticipated changes in the industry.

   A culture rooted in adaptability and forward-thinking helps organizations build agile leadership pipelines ready for the future. This proactive approach minimizes the risk of leadership voids and shields the company from the broader succession planning challenges that often emerge during periods of uncertainty.

5. Keeping the succession plan a secret

   Hiding succession plans from employees usually causes more problems than it solves. Employees who don’t understand how future roles are assigned can become frustrated and erode trust and morale.

   Transparent communication fosters a sense of inclusion and direction, even at a high level. By explaining the purpose, process, and goals of succession planning, companies reinforce a culture that values fairness, growth, and opportunity—effectively softening the usual challenges tied to poor visibility.

6. Relying on only one successor per role

   Pinning succession hopes on a single candidate is a risky strategy. People change roles, relocate, or leave organizations for various reasons, and putting all eggs in one basket can leave businesses vulnerable.

   Developing a slate of qualified candidates for each role ensures continuity and flexibility. This also fosters healthy internal competition and encourages more employees to engage with development opportunities. A robust plan mitigates the risk of poor succession planning.

7. Assuming that success in one position will extend to success in a higher position

   Strong individual contributors don’t always have the skills—or mindset—needed to succeed in leadership roles. Advancing one’s career means developing new skills, such as strategic thinking, cross-functional collaboration, and change leadership.

   It’s not just about whether someone has the skills—they also need to want the challenge of stepping up. Giving them chances to lead through real projects, mock scenarios, or one-on-one coaching can show how ready they are and reduce the risks tied to not planning.

8. Delegating full succession planning responsibility to HR

   HR helps shape and guide succession planning, but its success depends on active involvement from managers and senior leaders. Because they’re closest to the work, business units are best equipped to identify key roles and assess where risks may emerge.

   A cross-functional approach ensures that succession plans are grounded in real business needs. Collaboration between HR and department heads also improves plan adoption and effectiveness. Failing to do so is a hallmark of failed succession planning examples.

9. Failing to update the succession plan regularly

   Succession plans should be dynamic, not static. Organizations evolve, roles shift, and employees grow or exit. A plan created even a year ago may no longer be relevant.

   Routine evaluations of succession strategies keep them in step with evolving business goals and workforce capabilities. Revisiting these plans allows organizations to refine development paths and spotlight new high-potential employees—mitigating the common issues behind why succession planning fails.

10. Inadequately documenting the succession planning process

    Inadequate documentation often results in uneven execution, unclear communication, and reduced accountability. Without the correct records, it becomes much harder to see what’s working, where improvements are needed, or how to repeat successful efforts elsewhere.

    A well-documented process provides clarity and ensures continuity. Having everything documented makes assessing progress easier, bringing new stakeholders up to speed, and sharing essential insights between HR and leadership without disruption.

5 Top Reasons Why Succession Plans Fail Today

1. Succession Plans Are for Finding Successors Regardless of Circumstances

   Many companies develop succession plans to find replacements if an employee leaves. However, the right approach is always to have a pool of candidates/successors available. This proactive approach enables you to make changes according to your planning and stay prepared for abrupt changes outside your control.

   Effective succession planning is an ongoing process that must always account for business continuity. It helps find the right successor for a job or position who can do the job better.

   Finding the right successor helps maintain your business culture, ensures rightful decision-making, builds positive public opinion, and improves the employer’s image.

2. Succession Plans are for Every Employee, not Just Executives

   Another mistake many businesses make is developing succession plans only for their executives. In reality, building succession plans for every other employee is more important. Most companies establish succession plans for only 25% of the workforce. That limits the scope of the talent pools and may alienate aspiring employees looking forward to specific roles.

   Additionally, each department works like a well-oiled machine; even if one part is missing, it can cause problems. Ultimately, every employee is essential to ensuring smooth business operations.

   Furthermore, the companies that develop succession plans for every employee often overlook whether an employee wants a role. Many employees can be qualified for a position, but only some of them would consider it an aspirational role. Therefore, you should also offer career training to employees so you know what employee wants in a future role. As a result, you are more likely to succeed in succession planning when you offer career pathing.

3. Lack of Access to the Right Successor Candidates

   Succession planning relies on the organization having the right mix of employees. Companies sometimes develop excellent succession plans but lack the talent pool to enact them.

   Identifying the right successor is imperative yet difficult. It requires using KPIs, 360-degree reviews, psychometric tests, 9-box grids, and objective and key results to assess candidates. It’s essential to be thorough in every case, and businesses should feel confident in their selections.

   However, many companies fail to realize they can create a talent pool. The easiest way to ensure you have the best successors is to develop an organizational talent pool that depends on employees’ qualifications, skills, and preferences. Talent pools are formed by matching employees to pre-defined roles based on their skills and proficiency. It’s another reason why succession planning and career planning work together effectively. The right succession planning tools can bring this all together.

4. Developing Reactive Succession Plans Rather Than Proactive Succession Plans

   Businesses that develop reactionary succession plans often face failure because they rush and, in the process, end up overlooking several aspects. You can’t start to develop a succession plan when an employee is nearing retirement, is sick, or has given you the notice to leave.

   Successful succession plans require long-term planning, career pathing, and testing to identify successors who want and are qualified for the role. When you develop a succession plan reacting to an event, you will likely overlook the steps needed for a successful strategy.

   Therefore, it’s crucial to develop proactive succession plans. Start working on them and develop them as soon as possible so they’re ready to be deployed whenever needed.

5. Succession Plans Are Considered Independent

   Many companies treat succession plans as a separate and independent process. As a result, even properly developed succession plans can have negative results when the successor doesn’t perform well.

   The problem arises for two reasons. One common misconception is that succession planning is solely an HR responsibility when, in reality, it extends far beyond that. While HR finalizes a succession plan, the initial planning, tests, and development are and should be the responsibility of each respective department.

   Another issue is that succession plans often aren’t connected to internal training, development, or coaching programs. You can’t just consider a successor and leave them to develop for the role on their own. The organization has to set up its successor with training and development opportunities. Succession plans must be built with input from the training and development team and the functional department tied to the role to be effective.

Top 5 Challenges of Succession Planning

Succession planning is inherently complex. Avoiding the usual mistakes is just the beginning; many organizations still encounter more complex, deeply rooted challenges that demand focused effort and alignment with the broader company culture.

1. Clarifying Roles

   Ambiguity around roles and responsibilities makes it difficult to identify and prepare successors. Many organizations fail to define success in a given role, which leads to misaligned development efforts. This is one of the fundamental succession planning challenges companies encounter.

   Clear role definitions tied to business outcomes help target succession efforts effectively. For employees aiming to advance, these frameworks offer much-needed direction—and in doing so, they help solve several succession planning challenges that often go unaddressed.

2. Promoting from Within

   Internal promotion is a powerful lever for morale and efficiency, often saving time and money. It’s most effective when backed by targeted development plans and a clear understanding of who’s ready—and willing—to take the next step.

   Without proper systems, promotions can feel arbitrary, leading to perceptions of favoritism. A structured and transparent approach ensures fairness and maximizes the value of internal talent, avoiding poor succession planning.

3. Resisting Bias

   Unconscious bias can derail succession efforts by skewing how potential is perceived and rewarded. Biases based on gender, ethnicity, personality traits, or educational background often limit the diversity of leadership pipelines.

   Organizations should implement objective assessments, diverse succession committees, and structured decision-making processes to combat bias. The outcome? More people get a fair shot, and the company becomes stronger.

4. Seeing the Big Picture

   Succession planning should align with long-term business strategy, not just immediate needs. Many companies get caught up in backfilling roles rather than building future capabilities.

   A big-picture view helps organizations spot leadership gaps early, gauge team readiness, and invest where it matters most. It also ties succession planning into broader efforts like workforce development and long-term organizational growth.

5. Maintaining Morale

   Succession planning may lead to employee anxiety or internal competition. If not managed carefully, it may cause disengagement or internal conflict.

   Transparent communication, inclusive development opportunities, and recognition of individual aspirations help maintain morale. It should be positioned as a tool for growth and team development rather than simply a process for selecting leaders.

Develop the Right Succession Plan

Every large business needs active succession plans, and more importantly, it needs to develop one. The best way to create a successful succession plan is to learn from the mistakes of other companies.

It’s never too late to develop succession plans. If you already have one, consider reevaluating it to ensure its success and fruitfulness.

Overcoming Common Pitfalls of Succession Planning

Getting succession planning right means thinking ahead, including more voices, and staying focused on the future—not just the following vacancy. Succession planning should be embedded in company culture, not handled as a stand-alone HR initiative. Tackling the root causes of succession planning failure is essential for lasting success.

Begin by adopting tools that give you a real-time view of workforce capabilities, leadership readiness, and skill gaps. Platforms that map development goals, monitor competencies, and build detailed talent profiles make planning more focused and data-driven.

Cross-functional collaboration is equally critical. Planning should include perspectives across departments to ensure a unified view of future talent needs. Regular calibration sessions among leadership can maintain alignment and momentum.

Equally important is engaging employees in the process. Framing succession as a two-way path—with clear growth opportunities—encourages participation. Programs like career pathing, mentorship, and internal mobility are essential enablers.

What matters most must be measured. Keeping tabs on who’s advancing, where leadership gaps remain, and how diverse the talent pipeline is can guide better decisions and long-term planning. These metrics offer valuable insights that help teams course-correct and avoid the setbacks commonly associated with failed succession planning examples.

Why Does a Company Need a Succession Plan?

Succession planning goes far beyond replacing a CEO—it’s a critical strategy for maintaining stability, minimizing talent gaps, and keeping employees engaged. When key team members exit without a plan, the organization becomes far more susceptible to disruption—one of the significant consequences of a lack of succession planning. That’s precisely why having a solid succession plan is so important.

A well-crafted succession plan helps organizations:

• Retain institutional knowledge
• Promote internal talent efficiently
• Reduce hiring and onboarding costs
• Foster a culture of continuous development
• Minimize business downtime

Employees notice when a company supports their development—it shows commitment beyond their current role. When people see real opportunities ahead, they’re more likely to stay, grow, and make an impact. Overlooking that forward path leads to succession planning gaps that surface when it’s too late.

Succession planning isn’t just for large enterprises—it’s just as crucial for small and mid-sized organizations. No matter the scale, having a plan helps prevent the disadvantages that arise when leadership transitions leave organizations unprepared.

Succession Planning Best Practices

• Start early. Don’t wait for a vacancy—build your plan well before transitions are on the horizon.
• Make it inclusive. Look beyond the C-suite; every level of the organization should be part of the strategy.
• Use real data. Draw on performance reviews, skills assessments, and feedback tools to make informed decisions.
• Communicate openly. Let employees know what to expect and how the process works.
• Stay flexible. Revisit and update your plan regularly as business needs evolve.
• Bring in key players. Get support and input from managers and leadership early in the process.
• Measure and improve. Track what’s working and what’s not, and adjust your strategy accordingly.

Putting these practices into place helps build leadership pipelines that aren’t just prepared but resilient and aligned with the world of work’s future. These strategies also serve as preventative measures against poor succession planning and ensure the successful implementation of succession plan examples.

To learn more about succession plan best practices, view our Learning Center.

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FAQ’s

Why do succession plans fail?

Succession plans often fail due to short-sighted planning, limited scope, and poor execution. Common pitfalls include focusing only on executive roles, using one-size-fits-all competency models, failing to update plans regularly, and not aligning the process with long-term business strategy. A lack of transparency, inadequate documentation, and treating succession planning as an isolated HR task further contributes to failure.

Why doesn’t succession planning work?

Succession planning doesn’t work when it’s reactive instead of proactive or when organizations fail to engage the right stakeholders. It can become outdated quickly if it isn’t grounded in well-defined roles, objective data, and ongoing maintenance. If employees are left out or kept in the dark, it damages morale and limits mobility, ultimately undermining the success of the process.

What is the most common mistake in succession planning?

One of the organizations’ most prominent mistakes is thinking succession planning is just for executives. When companies overlook other key positions, they miss opportunities to build strong leadership at every level. A limited focus weakens continuity and makes the overall strategy less resilient.

What is one significant barrier to succession planning?

A significant barrier is organizational resistance to cross-functional collaboration. When HR is left to manage succession planning alone—without input from department heads or senior leaders—the plan lacks operational insight and buy-in. This siloed approach undermines both the accuracy and adoption of the strategy.