7 Key Importances of Succession Planning in 2025

When HR.com released its recent survey called The State of Internal Mobility, Success, and Career Development, a lot of eye-opening data was revealed regarding the various reasons it’s vital for organizations to have succession planning secured within their internal processes. With this in mind, we felt it was important to highlight these reasons so leaders like you can better understand why succession planning is essential and what you can do to facilitate the process to ensure your company’s goals are met.  

What is Succession Planning?  

The purpose of succession planning involves strategizing replacements for critical roles that become vacant within your organization. It identifies and develops potential great-fit employees to step into that role or opportunity.  

The 7 Reasons Succession Planning Is Essential:  

Succession planning is an all-encompassing process. It considers existing employees’ skillsets and strengths so you can ensure important positions within your company aren’t left vacant. The following are seven vital reasons you should have a succession plan in place in your organization:  

• Filling Future Vacancies

According to the survey, only about 37% of leaders cited filling future vacancies and shortages as a reason to implement succession planning within their company. This is an interesting finding, as one would think filling future vacancies is primarily the foundation upon which succession planning was built.  

This begs the question: are you considering which of your existing employees could step into a critical role should one become available? If not, you’re likely not correctly preparing your current employees in ways that will help them grow within your organization. Remember that succession planning is not only a pre-selection process; it’s the development and enhancement of skills that can be further utilized when positions become available.  

• Gaining Greater Diversity, Equity, and Inclusion Among Leaders

In today’s world, it will likely not surprise you that 55% of survey respondents indicated they’re leaning toward succession planning to gain greater diversity, equity, and inclusion among leaders. The responses, however, did vary between larger and smaller organizations, with larger organizations putting this as the top reason for having succession-planning processes. In contrast, smaller companies indicated this is the seventh most crucial reason.  

• Increasing Talent Retention

Employee turnover is expensive, both from a financial perspective and that of morale. Wise leaders look for ways to keep existing employees content by building their skill sets and finding ways for them to grow within their organizations. Succession planning can help you stave off turnover and revel in the retention your efforts will glean you.  

• Identifying Future Leaders

Who are your rock stars? Who are your go-getters?  If you don’t know these answers, you’re probably not leveraging succession planning correctly. Your succession-planning program should help you identify future leaders who can enter vacant positions without batting an eye. If you’re not recognizing your future leaders, you’re missing out on remarkable prospects and the potential to turn lower-level employees into future leaders.  

• Preparing Future Leaders

Now that you’ve identified potential future leaders, how will you prepare them to step into their roles when positions open up?   Preparing future leaders was cited by about half of survey respondents, indicating that the need to put job skills in place as early on as possible is important. You should be focusing on leadership readiness, particularly for key positions because it can take time to hone one’s skills so that they’re able to lead successfully. This is why it’s essential to identify potential leaders early on and get them into the mix of your succession plan.  

• Creating Opportunities for Career Advancement

During the Great Resignation of 2021, many companies were forced to realize they were not providing employees with the desired futures.  Around 4 million Americans quit their jobs in July 2021 alone, ushering in a phenomenal job shortage in the U.S.  Did people quit because they don’t want a paycheck? Of course not. Sure, there were probably some extenuating circumstances, but in many instances, employees realized they weren’t getting the leverage they needed to improve in the workplace. They wanted more money, better titles, and higher levels of responsibility than their companies were willing to afford them.  

If you’re not creating opportunities for career advancement, you should expect to realize high attrition rates and overall talent shortages because, rest assured, top talent is seeking opportunities elsewhere.  

• Risk of Loss

Surprisingly, less than a quarter of survey respondents indicated the risk of loss as one of the key reasons they wanted to implement succession planning into their HR programs.  

Succession planning shouldn’t only consider skills but also reach for higher levels of employee engagement. Risk of loss means you should ask your leaders if employees are excited about their positions; if they’re not, maybe you should be looking for opportunities within your company that make them happy to come to work.  

The Relationship Between Global Crisis and Succession  

In times of economic downturns, pandemics, and market disruptions, the need for succession planning becomes more evident. A global crisis can lead to unexpected leadership vacancies, workforce restructuring, and skill shortages, making it critical for businesses to have a plan for key roles. Without a well-defined succession planning process, organizations risk instability, loss of institutional knowledge, and disrupted operations.

Proactive succession planning is essential because it ensures that companies have a talent pipeline ready to step in during crises. This approach strengthens business resilience, minimizes risks, and allows organizations to navigate uncertainty confidently.  

Why Talent Plans Are Key For Businesses Today  

The purpose of succession planning extends beyond leadership roles—it’s essential for sustaining business growth, retaining top talent, and ensuring long-term success. In today’s fast-paced business environment, organizations face increased competition, evolving job roles, and shifting workforce demographics, all of which underscore the reasons for succession planning:

• Minimizing disruptions – A strong plan ensures smooth leadership transitions and business continuity.  

• Retaining institutional knowledge – Employees with deep organizational expertise are prepared for future roles.  

• Fostering career growth – Internal mobility through succession planning motivates employees and enhances engagement.  

• Reducing hiring costs – Developing talent internally is more cost-effective than external recruitment.  

• Strengthening leadership pipelines – Organizations can cultivate future-ready leaders through targeted development programs.  

The Succession Process: A Successful Approach  

A well-structured succession planning process involves several key steps to identify, develop, and transition employees into critical roles:  

• Identify Key Positions – Determine which roles are essential for long-term business success and require succession planning.  

• Assess Talent and Potential – Evaluate employees based on skills, performance, and leadership potential.  

• Develop High-Potential Employees – Provide leadership training, mentorship, and career development opportunities. 

• Implement a Talent Pipeline Strategy – Create structured career pathways to prepare employees for leadership roles.  

• Monitor and Adapt – Continuously review succession plans and adjust based on business needs and workforce changes.  

By following these steps, organizations can effectively execute a succession plan that aligns with long-term business goals.  

Overcoming Challenges in Succession Planning  

Despite the apparent importance of succession planning, many organizations struggle with implementation due to common challenges:  

• Lack of Leadership Buy-In – Gaining executive support is critical for the success of succession initiatives.  

• Limited Employee Development Programs – Employees may not be ready for advancement without proper training and mentoring.  

• Failure to Identify Future Talent Needs – Succession plans must account for evolving industry demands and workforce trends.  

• Resistance to Change – Employees and managers may hesitate to embrace transition planning without clear communication.  

• Short-Term Focus – Many companies prioritize immediate business needs over long-term succession strategies.  

Organizations should integrate succession planning into their broader talent management strategy to overcome these obstacles. By fostering a culture of internal growth, businesses can build strong leadership pipelines and secure their future success.   

Employing the Right Succession Planning Solution  

After reviewing the seven reasons for implementing succession planning, it should be clear that there are many organizational benefits. However, many organizations already have a formal succession planning process in place, but they often do not get the desired results. With the right technology in place, organizations can better identify gaps and opportunities. It helps to ensure a company is on track to build a thriving momentum for years to come.  

Succession planning aims to ensure business continuity, strengthen leadership development, and prepare organizations for the unexpected. Companies that invest in succession planning gain a competitive advantage by developing a resilient, future-ready workforce.  

Succession Planning FAQs  

Why is a succession plan so essential today?

A succession planning is essential because it ensures business continuity, minimizes disruptions, and prepares employees for leadership transitions. Without a well-structured plan, organizations risk losing critical knowledge, facing leadership gaps, and experiencing instability when key employees leave. The importance of succession planning lies in its ability to develop internal talent, reduce hiring costs, and create a long-term strategy for workforce sustainability.  

What is the objective of succession planning?  

Succession planning aims to identify, develop, and retain employees who can fill key roles in the future. It ensures that organizations have a pipeline of qualified candidates ready to step into critical positions when needed. The process aligns workforce planning with business strategy, helping companies adapt to change and maintain operational efficiency.  

What is the impact of succession planning?  

The impact of succession planning is significant across various aspects of an organization:  

• More substantial Leadership Continuity – Ensures smooth transitions when key leaders leave or retire.  

• Higher Employee Engagement – Employees feel valued when they see clear career progression opportunities.  

• Reduced Hiring Costs – Internal development minimizes the need for external recruitment.  

• Business Stability and Growth – Organizations remain agile and prepared for unexpected workforce changes.  

 By proactively addressing leadership and talent gaps, businesses can maintain a competitive edge and sustain long-term success. 

What is the value of succession planning?  

Our customers have realized tremendous value in succession planning extending beyond leadership transitions. Companies that invest in succession planning benefit in many ways:  

• Stronger Internal Talent Pipelines – Reducing dependency on external hiring.  

• Improved Workforce Agility – Ensuring employees can step into critical roles when needed.  

• Increased Retention and Development – Encouraging employees to grow within the company.  

• Risk Mitigation – Preparing for unforeseen leadership departures or skill shortages.  

A well-executed succession plan provides stability, fosters career growth, and secures the future success of an organization.  To learn more, request a demo of succession.