Every employee matters. That’s why we invest so much in recruitment and retention: because we know that every talent we bring in is valuable. So, when an employee departs, whether voluntarily or involuntarily, they’ll leave a hole—responsibilities that need to be covered to keep the business running smoothly.
Succession planning, defined by SHRM as “a focused process for keeping talent in the pipeline,” is a safety net for your organization. Investing in succession planning is an investment in your people and teams, building an action plan that will last long into the future.
We’ve gathered five metrics that will help you measure the effectiveness of your succession planning:
- Bench strength
- Time to fill
- Career path ratio
- Diversity metrics
1. Bench strength
Bench strength is succession planning’s make-or-break metric. Borrowed from basketball, bench strength is a measurement of the talent you have sitting on the bench: people who aren’t on the playing field but are in shape to play. According to Gartner, developing bench strength was a top-three priority for HR leaders in 2019.
To calculate your organization’s bench strength, talk to your managers. Ask them about their people: who’s showing promise, who’s interested in leadership opportunities, and who’s capable of moving up a rank or two.
Succession planning depends on having strong team players in the wings who can take on more challenging positions and responsibilities if necessary. Without these people, you’ll be forced to hire from the outside—an expensive and time-sucking process.
Time-to-fill—a very different metric from time-to-hire—is a measurement of the efficacy of your organization’s recruitment efforts and hiring processes. If you’re creating a succession plan based on outside hires, lowering your time-to-fill is critical to that plan’s success.
Time-to-fill is the sum total amount of working days between submission of a job requisition to official hire. If you’re looking to understand time-to-fill on a team, department, or organizational level, add the sums up for each role divided by roles hired.
3. Career path ratio
The world of work is changing, and not just because of COVID. CHROs surveyed by Gartner predict that 40% of leadership roles will be radically different in the next five years. To stay ready, we need to make sure we’re encouraging our people to grow their skills and learn to manage up.
Career path ratio measures the latitude your employees experience within your organization. To calculate career path ratio, divide the total number of promotions in your organization by the sum of all role changes, both upward and lateral moves. (Hint: if the number is more than 1, check your calculator and try again.)
High career path ratio results—a number above .7—signal frequent promotions and opportunity to take on greater responsibilities. Low results—under .2—signal a problem with the promotion process or too many lateral movements. If you want to make sure your people are upskilling and learning to be better leaders, strive to be as close to 1 as possible.
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4. Diversity metrics
Remember that Gartner study of HR priorities? We know that bench strength is in the top three—and 45% of HR leaders are concerned that their bench lacks diversity.
The benefits of diversity and inclusion for your business are endless. Diverse teams make better decisions and are directly correlated to higher returns. So, when you’re setting your teams up for future success, keeping your eye on diversity is critical.
Diversity in your workforce can be measured in a few ways, including:
- Pay gap
- Gender, age, and racial diversity ratios
- Regional diversity benchmarks
We all have to think about succession planning, but some of us should be thinking a lot harder than others.
Let’s be frank with each other. How’s your employee retention rate doing? Are your people sticking around?
If you’re seeing a revolving door of entrances and exits, then succession planning needs to be top of mind for you. To keep your organization functioning at every level, you need to know how to empower, engage, and retain your people.
Retention is an early indicator of employee happiness and wellbeing. You can set up the most fantastic succession plan in the world of HR, but it won’t solve the issue of your people leaving. Don’t let succession planning take you away from keeping your employees happy in the here and now—not just the future.