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An estimated 10,000 Baby Boomers are retiring each day, and at the same time, 42% of workers are considering quitting their jobs. Similar to losing vital data, the unexpected loss of key leadership can disrupt business operations and significantly damage a company’s bottom line. 

So why do business owners back up their critical data, but not their critical talent? Below are 3 reasons to prioritize succession planning: 

Reduce Turnover Costs. 

  • According to SHRM, turnover costs for a single senior leader can be triple or even quadruple the departing person’s salary. Having talent ready to step in is a highly effective way to minimize disruption while eliminating unnecessary costs and stress. 

Promote Growth in Current Leaders. 

  • When faced with complex issues, even the most talented business leaders can benefit from having one or more well-informed backups to offer alternate perspectives. Executives open to having their ideas challenged not only experience more rapid personal growth but are also more likely to develop innovative solutions.

Prepare High-Potentials for Succession. 

  • While executives overwhelmingly acknowledge the value of succession planning, studies show that only 21% of organizations have formalized plans in place. To ensure long-term stability, business leaders must think multiple steps ahead, not only continuing to develop their current executives, but also identifying and preparing the next wave of leaders to seamlessly transition into vital roles when needed.

To get started, we recommend involving managers early and creating a sound structure for assessing potential candidates based on their readiness, performance, and potential. If you’re not already tracking performance metrics consistently, assessments can be a great tool for accurately gauging factors like motivation, learning orientation, and propensity to deal with complex change. 

By making the right talent investments now, you’ll not only avoid future pain points, but will also send a powerful message to your employees and customers that your organization is strong, well-organized, and effectively positioned for long-term success.