Succession Planning: Definition, Types, and Key Steps in 2025

Succession planning is more than a strategy for large corporations. It is a critical practice for any organization that wants to ensure long-term stability and resilience. According to a 2023 SHRM study, 56% of companies have no succession plan in place, and only 21% have implemented a formal one. This lack of preparation leaves organizations vulnerable to operational disruptions, leadership gaps, and high recruitment costs.

Consider what happens when a key executive, such as the CTO, suddenly resigns. Without a clear plan, decision-making slows down, project timelines are disrupted, and team morale may drop. However, with a well-thought-out succession strategy, the organization can ensure a smooth transition and maintain momentum without compromising performance.

This blog explores everything you need to know about succession planning. You will learn what it is, why it matters, the different types, key steps to implement it effectively, and best practices to ensure long-term success.

What is succession planning?

Succession planning is a strategic process used to identify, develop, and prepare individuals to step into key roles within an organization. It ensures that when employees, especially those in critical, niche, or leadership positions, leave due to retirement, resignation, promotion, or unexpected events, the business can continue to operate without disruption.

Why Succession Planning is Important?

Succession planning helps organizations manage change smoothly by keeping critical roles filled. Here are the key reasons it matters:

1. Business Continuity

Ensures that operations continue without interruption when key employees leave. It minimizes disruption and allows organizations to respond quickly and confidently during transitions.

2. Reduces Recruitment Costs

Hiring externally is often more expensive and time-consuming than promoting from within. By preparing internal candidates in advance, companies can reduce external hiring costs and fill positions faster.

3. Supports Leadership Development

Encourages a strong leadership pipeline. It helps identify high-potential employees early and provides them with opportunities for growth, mentoring, and upskilling, preparing them for future leadership roles.

4. Boosts Employee Morale

When employees see clear pathways for advancement, they feel valued and motivated. This improves engagement, job satisfaction, and overall team morale.

5. Helps Retain Top Talent

Talented employees are more likely to stay when they see opportunities for career development. Succession planning shows a commitment to internal growth, reducing turnover among high performers.

Different types of succession planning

Organizations can adopt different succession planning approaches depending on their goals and structure. Here are the main types:

• ‍Internal Succession Planning: Focuses on promoting and developing current employees to fill future roles. It boosts retention and leverages existing talent. ‍
• External Succession Planning: Builds a pipeline of outside candidates ready to step into key roles when needed. This helps bring in fresh skills and perspectives. ‍
• Leadership Succession Planning: Prepares successors for high-level roles like CEO, CTO, or department heads. It ensures stability in strategic decision-making.
• ‍Non-Leadership Succession Planning: Targets niche or hard-to-fill roles outside leadership. It includes cross-training and internal mobility to cover specialized functions.‍
• Long-Term Succession Planning: Involves preparing for leadership and key role changes years in advance. These plans are regularly updated to align with business goals.
• ‍Emergency Succession Planning: A short-term solution used when a key employee leaves unexpectedly due to illness, resignation, or other emergencies.
• ‍Transition Succession Planning: Covers temporary absences, such as extended leave or sabbaticals, to ensure continuity during the interim.

Also, discover the Top 6 Succession Management Tools to identify and develop future leaders while aligning talent with organizational goals.

Steps in Succession Planning Process

A well-defined succession planning process helps organizations prepare talent for critical roles and avoid operational disruptions. Below are six key steps, explained with consistent structure and a unified example.

1. Identify Critical Roles

Start by recognizing the positions that are essential to business continuity and long-term goals. These roles are typically high-impact, hard to fill, or tied to specialized knowledge.

For example, the Senior IT Manager is responsible for infrastructure, cybersecurity, and vendor relationships. A vacancy in this role could affect core operations.

2. Identify High-Potential Employees

Look for employees who consistently perform well, demonstrate leadership qualities, and show interest in growth opportunities. These individuals can be groomed for key positions.

For example, a team lead within the IT department may show initiative, mentor peers, and contribute to strategic projects, making them a strong candidate for succession.

3. Assess the Current Talent Pool

Evaluate whether identified employees are ready to take on larger roles. Assess their strengths, development needs, and alignment with organizational goals.

For example, the team lead may be strong in technical areas but may need experience in budgeting and vendor negotiations before stepping into a managerial role.

4. Define Successor Criteria

Set clear criteria for what skills, experience, and qualities a successor must have to succeed in the role. This ensures objectivity in selection and development planning.

For example, a successor for the Senior IT Manager role should possess cloud infrastructure expertise, team leadership experience, and the ability to manage compliance requirements.

5. Create Individual Development Plans

Develop customized growth plans to help potential successors build the skills they need. Include upskilling and reskilling opportunities, targeted training, mentoring, cross-functional assignments, and leadership exposure.

For example, the team lead could be enrolled in a leadership program, assigned to manage a key vendor contract, and paired with a mentor from senior management.

6. Implement and Monitor Progress

‍Put the development plan into action and track progress through regular check-ins, performance reviews, and feedback. Adjust the plan as needed based on outcomes.

For example, after six months of development, the team lead may demonstrate improved decision-making and strategic thinking, indicating readiness for future advancement.

Dive into our blog 10 Succession Planning Metrics to optimize talent pipeline management and ensure smooth leadership transitions.

Succession planning Best Practices

Align with business goals

‍Succession planning strategies must directly support your company’s mission and future direction. Focus on roles that are essential to achieving strategic priorities.

Focus on both leadership and niche roles

Plan for more than just executive positions. Include niche or hard-to-fill roles that are critical to operations and may be difficult to replace quickly.

Make it a continuous process

‍Succession planning should be revisited regularly to reflect changes in roles, business goals, and workforce dynamics. A one-time plan is not enough to support long-term growth.

Leverage  technology

Use talent assessments and workforce analytics to identify skill gaps, evaluate readiness, and track progress. Data-driven insights make the process more objective and effective.

Conduct skills assessments

‍Use skills assessments to evaluate employee readiness, uncover development needs, and track progress over time. These insights help guide more effective planning.

Personalize development plans

Design development plans tailored to each potential successor. Include leadership training, mentoring, cross-functional assignments, and measurable learning goals.

Encourage internal mobility

Foster a culture where employees can move across roles or departments. Supporting internal advancement helps retain talent and strengthens succession pipelines.

Be transparent

Clearly communicate your succession planning efforts. Transparency builds trust, aligns expectations, and motivates employee participation.

Check out our blog to uncover actionable succession planning best practices to create a strong leadership pipeline.

Conclusion

Succession planning is key to building a resilient, high-performing organization. It helps ensure business continuity, reduces hiring costs, improves retention, and strengthens your company’s credibility.

To make this process effective, organizations must move beyond reactive planning and adopt a continuous, skills-based talent strategy. iMocha’s AI-powered Skills Intelligence Cloud supports this shift by identifying top talent, benchmarking role requirements, closing skill gaps with targeted development plans, and enabling internal mobility through real-time, data-driven insights.

FAQs

1. What are the two types of succession plans?

The two main types are internal and external succession plans. Internal plans focus on promoting and developing current employees for future roles, while external plans involve identifying and preparing outside candidates to fill key positions.

2. What is an example of succession planning?

If a company prepares a mid-level manager to replace a retiring department head by offering training, mentorship, and leadership projects, that is succession planning in action. The goal is to ensure a smooth transition when the senior leader steps down.

3. Who is responsible for succession planning?

Succession planning is typically led by HR and senior leadership, but it requires collaboration across departments. Managers play a key role in identifying high-potential employees, while HR designs and tracks development plans aligned with business goals.