Singapore’s open economy houses many family-owned organisations and businesses, which make succession planning a critical business process. In several organisations, succession planning is handled either by the HR department or the business owners themselves. Succession Planning ensures a smooth transition so that businesses and organisations can continue to run smoothly and efficiently during a time
Singapore’s open economy houses many family-owned organisations and businesses, which make succession planning a critical business process.
In several organisations, succession planning is handled either by the HR department or the business owners themselves.
Succession Planning ensures a smooth transition so that businesses and organisations can continue to run smoothly and efficiently during a time of change.
So, let’s take a closer look at the concept of succession planning.
What Is Succession Planning?
Succession planning is critical for businesses and organisations, especially family-owned businesses, and ensures proper business continuity. The primary goal of succession planning is to prevent companies and organisations from being frozen and avoid unwanted conflict among family members, such as between heirs and surviving owners. It focuses on retaining a business/organisation within the family circle, and facilitates buying-sell planning such as selling the business to other business owners, key employees, and interested parties.
Succession planning in an organisation involves:
a.The process of successfully transferring the ownership of the business
b. Transferring the business/organisation from one business owner to another person/persons
c. The course of action to be taken upon the death of ongoing business owner/owners
d.The process of the selling and purchasing of business shares
E. The course of action to be taken upon business owner/owners leaving during their lifetime.
The importance of succession planning
1. Minimise Recruitment Costs
Succession planning offers a way to cut recruitment costs, enabling organisations to manage recruitment in-house. It also proves to be an essential aspect of the talent management process by providing a channel to identify key roles, employees/potential employees with the right skills, and positions requiring to be filled in a short space of time. Succession planning gives an impetus to in-house recruitment that reduces an organisation’s recruitment costs from external sources.
2. Help Identify Future Leaders
Another significance of succession planning is that it helps identify future leaders. Not all candidates within an organisation possess the skills needed for taking up critical organisational roles. This is why succession planning usually involves training and mentoring for potential candidates. Succession planning also allows employees to come forward for open positions within the organisation.
The succession planning process is designed to help organisations recognise future leaders. For example, employees in the back office can have the potential or skills to take up higher positions which can be impossible to identify without executing talent management. Also, investing in succession planning can create and maintain gender diversity in senior roles.
3. Keep Company Buoyant
Change is always difficult, no less for companies. Depending on the management and handover process, business succession can be incredibly disruptive. Good succession planning can hence help keep the company buoyant during the transition period, ensuring that business remains smooth. By planning for the succession process, this ensures that there is a good candidate to fill the right shoes when needed.
4. Ensures Business Continuity
Succession planning ensures that organisations and businesses never stay still and are constantly growing and prospering. With appropriate succession planning, organisations will never cease to exist in unforeseen situations like resignation, retirement or death of business runners.
Succession Planning Singapore with Lighthouse Legacy Planners
Lighthouse Legacy offers a holistic and realistic approach towards succession planning that reflects our client’s vision, achievements and personal bonds with their organisations and families. Having worked with some of the leading multinational companies in Singapore, our consultants are well aware of different organisations’ succession planning needs and goals.
Our various services, including in-depth consultations, workshops, and seminars, help organisations and businesses pave the correct path towards progressive succession planning and create unforgettable legacies.