Why Succession Planning is Essential in the Industrial Sector

It’s no secret that the industrial sector is grappling with significant continuity challenges. As veteran workers retire or leave for other opportunities, companies struggle to fill frontline supervisor, mid-level management, and senior leadership roles.

A shortage of new applicants compounds this employee gap. As facility managers work to find qualified candidates to backfill departing employees, they must contend with additional challenges such as the cost of increased overtime, higher turnover rates, and low morale.

Fortunately, there is a way to offset this talent shortage and maintain operational efficiency. Succession planning is a strategic process that focuses on developing the skills of top performers to prepare them to move forward in the company. This article explores how to design and implement an effective succession plan for industrial-sector organizations and offers best practices to overcome key succession planning obstacles.

How Succession Planning Helps Organizations Overcome Key Challenges

By implementing a robust succession plan, organizations can ensure they are well-prepared for the future, maintaining stability and continuity even as key personnel change.

1. Succession Planning Ensures Critical Positions Remain Filled

Without a succession plan, organizations may struggle to fill critical positions promptly. When senior and supervisory roles go unfilled, the burden falls on your remaining workforce. This means increased overtime costs and additional stress on your existing workers. It can also create delays in maintenance, repairs, and other essential tasks, increasing the risk of accidents and equipment failures.

The added pressure and uncertainty can negatively impact employee morale, increasing turnover rates. A strong succession plan helps you avoid these issues by creating a pipeline of capable employees ready to assume key roles when necessary.

2. Succession Planning Prevents the High Cost of Turnover

External talent searches can be costly in terms of both time and money. 2024 data from the HR software company Pinpoint placed the median time to fill for a skilled technical role in the industrial sector at 52 days, while a middle manager role takes 43 days. The Josh Bersin Company’s Time-to-Hire Factbook from 2023 suggests that companies in the energy and defense industries take more than 67 days to replace someone with specialized knowledge.

Two months is a long time to go without a qualified team lead, line supervisor, or manager—especially in a production-oriented workplace. Moreover, several estimates indicate that the financial cost of replacing a manager can range between 75%–150% of the role’s yearly salary. Succession planning helps organizations avoid these pitfalls by preparing for future vacancies and ensuring qualified candidates are ready to step in when the time comes.

3. Succession Planning Retains Knowledge from Departing Workers

When experienced employees leave, they take valuable knowledge and skills with them. This might include best practices for equipment maintenance, the context for key processes, or tips for managing supplier relationships.

Succession planning helps mitigate these losses by creating a plan to capture and transfer this knowledge to potential successors. This ensures that valuable expertise is retained and passed on throughout the organization.

Steps for Building a Great Succession Plan

Determine Critical Roles

The first step of a succession plan is to identify which positions are most critical to your organization’s success. This will help you determine which areas to prioritize with your training.

Align Your Succession Plan with the Organization’s Strategic Goals

Roles with high turnover rates, flight risks, or high market demand are more vulnerable and should be prioritized in your succession plan.

Identify Unique Skill Sets and Knowledge

Some roles require specialized skills or knowledge that are not easy to replace. These roles are critical because their vacancy could lead to a significant loss of expertise. Pay close attention to positions that involve proprietary technologies, unique processes, or specialized regulatory knowledge.

Not all of these will be senior management, but they should be integral to your succession plan. Depending on your industry, some key examples could include CNC machinist, robotics technician, welding inspector, chemical process operator, or food safety technician.

Consult with Stakeholders

Engage with various stakeholders—including senior leaders, department heads, and line supervisors—to gather insights on which roles they consider critical. Stakeholders can provide valuable perspectives on the strategic importance of different positions and the potential impact of vacancies.

Identify Potential Successors

After you have developed a list of your most critical roles, seek out promising existing employees who can be prepared for these roles.

Define Capabilities for Each Role

Before identifying potential successors, establish clear criteria for what makes a successful candidate for each critical role. Create a catalog of skills, competencies, and qualifications necessary to succeed in each position.

Identify High-Potential Employees

Identify individuals who have consistently exceeded expectations, demonstrated leadership qualities, and proactively sought out opportunities to enhance their skills. To help identify these individuals, take advantage of:

• Performance evaluations: Examine employees’ review history for insights into their unique strengths, performance history, and career goals.
• Training records: Explore which skills employees have already developed and whether they have actively sought out development opportunities.
• Leadership interviews and observations: Consult managers for insights into which employees consistently demonstrate sought-after professional behaviors.

Note that the value of these actions relies on your organization having solid processes in place for each. For example, performance evaluation records will only be comprehensive if all your managers are accountable for conducting regular and thoughtful reviews.

Develop Internal Talent Through Training and Mentorship

Once you have identified your organization’s key roles, begin developing internal training programs to provide your successors with the skills and knowledge they need to assume these positions in the future. When creating programs, strive to include a variety of targeted training programs, leadership learning experiences, and mentorship opportunities. This will help your successors build the foundation they need to continue progressing throughout your organization.

Create a Structured Plan for Knowledge Transfer

Create a structured plan that outlines how you plan to transfer essential knowledge to other members of your workforce. This can be accomplished through person-to-person methods such as coaching, mentorships, and shadowing and through individual activities such as tutorial videos, technical documentation, and simulations. When creating your knowledge transfer plan, it is best to include various methods and activities.

Implementing Effective Training Programs

Assess Successors’ Current Skills

The first step in creating an employee development plan is to perform a skills gap analysis. This will help you assess your successor’s current abilities and the skills they need to develop through training. Start by creating a list of their current capabilities using:

When creating these plans, combine traditional knowledge-building activities such as eLearning, videos, workshops, courses, and seminars with hands-on activities such as learning scenarios and equipment simulations. Whenever possible, you should also pair your successors with experienced mentors or coaches who can provide guidance and support. This will help ensure your successors develop the capabilities and competencies needed for their future positions.

Provide Leadership and Supervisory Training

Capable managers are the lifeblood of any organization. Even if your successors are not training for a specific management position, you should prioritize this aspect of their professional development. By helping workers build leadership skills early in their careers, you lay the groundwork for future managers.

Leadership development can be effectively taught through many methods, but it is a multi-layered undertaking. For that reason, consider incorporating one-on-one activities such as mentorships and coaching. Also, work with current managers and supervisors to identify opportunities where they can delegate specific tasks and responsibilities to aspiring team leads.

Set Clear Development Goals

Once you have established which skills and competencies to prioritize, the next step is to set clear development goals that are:

• Specific: Clearly define the objectives.
• Measurable: Establish criteria for progress and success.
• Achievable: Ensure they are realistic.
• Relevant: Align with organizational objectives and employee career aspirations.
• Time-bound: Set deadlines for completion.

Improve Your Talent Recruitment and Onboarding Strategies

Incorporate Assessments into Your Onboarding Program

The goal of any succession plan is to identify the most promising workers within your organization, so why not start at the very beginning of an employee’s career? Adding assessments to your onboarding program can help uncover individuals with valuable knowledge and unique skill sets that enable them to take on more advanced roles within the organization.

You should also hold development conversations with new employees to gain insights into their career goals. This will help you identify potential successors and give managers the information they need to develop these employees throughout their careers. For example, a new outside operator may be a good fit in the future when a control room operator position becomes available, but they may prefer to follow a technician or specialist’s career path.

Overcoming Common Training Challenges

Succession planning can be challenging to implement in an industrial setting with tight schedules and limited resources. Here are some creative solutions to help you overcome common obstacles and create an effective succession plan.

Allocate Your Resources

Ensure that training is focused on what is necessary and realistic in terms of expectations. Don’t try to build the profile of your ultimate candidate all at once; it will take time. Assess your current training approach and determine which skills can be addressed using your existing methods. Since training for these roles already exists, in many cases, it is simply a matter of adapting current learning methods to fit into a successor’s IDP.

If you’re struggling with the logistics of taking workers away from their workstations, you may need to adjust how you deliver your training. If your current lessons are too long, try splitting them into shorter activities that focus on a single concept at a time. This microlearning approach is not only easier to schedule, but it can also result in better knowledge retention.

Consider your team’s working environment when developing your program. For instance, making eLearning content available by smartphone for workers who don’t have regular access to desktop computers can increase engagement. The more accessible your training is, the less disruptive it will be to your workers’ productivity.

Fulfilling Short-Term Development Needs

Succession planning is typically a long-term initiative, but what can you do if your organization is struggling to fill critical roles right now? Don’t be afraid to think outside the box to keep operations running smoothly.

• Reconnect with former employees, bringing them in as short-term trainers or mentors. This provides you with subject matter experts to guide newer workers and lessens the need to divert full-time staff from their own roles. These former employees may also be useful sources of institutional knowledge as you create documentation for your succession planning program.
• Consider partnering with a talent solutions provider that can quickly help augment your current workforce. This talent partner can find, train, and place new team members in your organization whether you need support for a seasonal surge in production demand or someone to fill a specialized open role.

Implement Succession Planning to Future-Proof Your Organization

Implementing a comprehensive succession plan requires commitment and strategic thinking. However, the benefits—such as improved operational efficiency, reduced turnover, and sustained business growth—are well worth the effort. Investing in your employees from their first day on the job and preparing them for future roles can ensure that your organization remains competitive and resilient in the face of industry challenges.

Contact us today to discuss creating or refining a succession planning program in your organization.