Merriam-Webster defines “demographics” as the statistical characteristics of human populations such as age or income. An example of a demographic collected in human resources is gender, which may include all employees within a particular job, e.g., Early Childhood Educator. Other demographics include age, length of service and educational level. Demographic data is helpful with respect to HR planning and, more specifically, succession planning. For example, if the average age of current supervisory staff is 60, it is likely that staff will begin retiring. It makes sense to initiate learning and development opportunities to enable younger staff to successfully compete for supervisory positions.
Another example is using demographic information to determine outreach programs for staffing. If the community demographic profile indicates a significant proportion of aboriginal families, and you currently have very few aboriginal employees, it would be helpful to target aboriginal job seekers.
Human resources metrics track measurements to determine the value and effectiveness of HR strategies. Examples include – turnover, time to hire, sick leave usage, cost of hiring, cost of training, productivity and benefit cost.
Links and Resources:
What would you do in your organization if a key employee resigned, fell ill or had to be fired tomorrow? Would you be prepared?
Succession planning is not an issue that many organizations address in any systematic way. Because many organizations are small (with fewer than 10 employees) and might be facing other organizational challenges, thinking about who the next executive director might be or what would happen if the director of finance suddenly left is not high on their priority list.
There are many reasons why organizations need to be thinking about succession planning. The most important is that we rely on staff to carry out our missions, provide services and meet our organization's goals. We need to think about what would happen to those services or our ability to fulfill our mission if a key staff member left.
Another reason to focus on succession planning is the changing realities of workplaces. The impending retirement of the baby boomers is expected to have a major impact on workforce capacity. Teresa Howe in "Succession Planning and Management" identified other emerging realities about the workforce in Canada:
With careful planning and preparation, organizations can manage the changes that result from a generational transfer of leadership as well as the ongoing changes that occur regularly when key employees leave an organization.
Although the type and extent of planning will be different, organizations both large and small need to have some sort of succession plan. Effective succession planning supports organizational stability and sustainability by ensuring there is an established process to meet staffing requirements. Boards and executive directors can demonstrate leadership by having the strategies and processes in place to ensure these transitions occur smoothly, with little disruption to the organization.
Commissioned by Quebec’s Comité sectoriel de main-d'œuvre, Économie sociale et Action communautaire, and translated with the generous support of the Institute for Nonprofit Studies at Mount Royal College, La Relève is a combination discussion paper and workbook, aimed at raising awareness about succession and workforce demographics in the province’s community sector. While the majority of the statistics found in the document are specific to Quebec, the issues and concepts about succession have broad and universal applications for the sector in provinces and territories in the rest of Canada.
(Note: While the term executive director is used throughout this discussion, it is understood that this is only one of many terms, such as administrator or coordinator, used by organizations in the ECEC sector to refer to their most senior staff person. The same is true of terms used for other positions. An accountant in one organization may be a financial officer or CFO in another. The important consideration is not the title but the work-related responsibilities and their value within the organization.)
A succession plan, simply put, is a component of good HR planning and management. Succession planning acknowledges that staff will not be with an organization indefinitely and it provides a plan and process for addressing the changes that will occur when they leave. Most succession planning focuses on the most senior manager (the executive director), however, all key positions should be included in the plan. Key positions can be defined as those that are crucial to the operations of your organization and – because of skill, seniority and/or experience – hard to replace.
Whenever size and resources permit, a succession plan should involve nurturing and developing employees from within an organization. Employees who are perceived to have the skills, knowledge, qualities, experience and the desire can be groomed to move up to fill specific, key positions.
The plan will generally include a combination of training and developing existing staff, and external recruitment.
Human Resources and Skills Development Canada (HRSDC)* defines constructive dismissal as situations where the employer has not directly fired the employee. Rather, the employer has failed to comply with the contract of employment in a major respect, unilaterally changing the terms of employment or expressing a settled intention to do so, forcing the employee to quit. To avoid a potential constructive dismissal or other claim, include a statement to specify that a succession plan is not a guarantee of a position; rather it represents a developmental plan to prepare an individual should opportunities arise within the organization.
The absence of a succession plan can undermine an organization's effectiveness and sustainability. Without a succession planning process, an organization may not have a means of ensuring that the programs and services crucial to its operation are sustained beyond the tenure of the individual currently responsible for them.
A mid-sized organization relied heavily on the corporate memory, skills and experience of a long-time employee. In her final position, she was responsible for office administration, including payroll, budget monitoring and the organization of events. Over the course of her employment she gained a very good understanding of the organization's operations and history.
Her unexpected death was both an emotional blow and a wake up call to her colleagues. Everything she had known about the organization was "in her head." While discussions had occurred regularly concerning the need to document this information and to pass this knowledge on to others, this had never happened. The organization was able to regroup and survive the transition, but the employees experienced high levels of stress as they struggled to determine what needed to happen when. A great deal of time and effort was spent recreating systems and processes and even then, some things fell through the cracks resulting in the need to rebuild relationships with clients, funders and suppliers.
Ideally an HR practitioner is responsible for compiling HR demographics and metrics. However, in the absence of an HR practitioner, it is normally the executive director who compiles and analyzes the data. Both the board and the executive director play pivotal roles.
Recommendations based on demographics and metrics may include the provision of additional training to increase employee skill sets, more outreach to attract a more diverse pool of candidates and enhanced employee benefits.
The board is responsible for succession planning for the executive director position. The board hires the executive director to ensure it has a skilled manager at the helm to implement the organization's mission and vision. It is therefore very important for boards to spend some time reflecting on what they would do if, or when, the executive director leaves. All too often, boards find they are unprepared for such an occurrence and are left scrambling to quickly replace the person. There are many examples of an executive director leaving only to have the organization fall into disarray: funders withdraw resources, and other key staff members leave due to lack of effective leadership. Even when provided with adequate notice, boards sometimes find themselves in the position of having to scramble to find an interim solution.
The executive director is responsible for ensuring a succession plan is in place for other key positions in the organization, as well as anticipating potential issues such as multiple retirements or excessive turnover or absenteeism. The plan will likely be developed with help from the management team.
Seek input from all key stakeholders, including staff and board members regarding key metrics and succession planning process.
Links and Resources:
- Sample Activity Report, tracking HR on a monthly bases
CCHRSC has published two documents that provide statistical and labour market information insight to the ECEC workforce in Canada:
It is helpful to measure both turnover and the cost of turnover. Turnover is calculated by taking the number of people who leave in a year divided by the average number of employees over the year. For example, a centre or agency has an average of 20 employees. Seven left last year, so its labour turnover rate for that year is 35% (7/20 x 100 = 35%).
Cost of turnover demonstrates the cost of replacing an employee. The cost of replacing an employee is not just the cost of advertising a vacancy, but also includes additional costs such as vacation payout, severance pay and Canada Pension Plan.
There are many cost-of-turnover calculators available on line. The Canada Human Resources Centre and University of Wisconsin provide comprehensive online turnover calculators. Using these tools and the costs they calculate can be very powerful when making presentations to a board of directors to justify retention strategies.
In many smaller organizations, succession planning may be viewed as a luxury, but it isn't. At minimum, boards of directors have a responsibility to consider and plan for the departure of the executive director, who is often critical to the existence and sustainability of the organization.
In some instances, the board may decide that there needs to be a "second-in-command" who has the capacity to replace the executive director in the future.
The plan could include a formalized process of mentoring or coaching, and training in more specific aspects of the job. If the size of the organization permits, it would be preferable to have more than one person identified as a potential successor to the executive director.
In a small organization, it may not be possible to groom a successor from within the ranks of existing staff. To ensure continuity and stability when an executive director leaves, employees may be paired to cross-train each other to ensure there are two people on staff who know each job.
The board chair should have a conversation with the executive director on an annual basis regarding her or his career aspirations. While the executive director is not required to share any career goals, the conversation can allow for a frank discussion about future plans.
First and foremost, the board is responsible for drawing up a plan of action and effectively communicating it to the rest of the staff as soon as possible. This is necessary to demonstrate that the board is taking decisive action, to deal with any misinformation that may be generated by a quick departure and to ensure that all of the employees' questions are answered.
With no succession plan or second-in-command identified, the board may want to name an interim executive director until a replacement is selected. This choice should be made wisely because someone with the right skills and knowledge needs to be chosen. If a person is asked to take on the executive director responsibilities in addition to her or his job, there should be an adjustment in that employee's compensation to reflect the additional responsibilities and work load.
Another option is to ask a qualified group of two or three employees to co-manage the organization by sharing the executive director responsibilities. In order for this approach to be effective, there should be a clear understanding of the various aspects of the executive director’s position so that tasks may be given to those with the ability to take them on. It also requires ongoing communication and coordination between the employees who are part of the co-management team.
If there are no employees able or willing to take on the task on an interim basis, a board member may be asked to temporarily assume these functions. The board member will have to resign from the board if she or he takes on a paid position with the organization.
The following ideas can be incorporated into your succession plan for key positions in the organization other than the executive director.
New employees are often found in other organizations. While some may view this as poaching, the reality is that employees who aren't being challenged or aren't happy will leave an organization for a better opportunity. In some cases, employees have been known to leave for a position in another organization but return years later with new experiences and skills. Helping to keep exceptional employees in the sector by allowing them to move around to develop their careers should be seen not as a loss for individual organizations, but as a gain for the capacity of the sector.
An innovative approach would be to develop a pool of candidates with other organizations and a rotational program to allow key employees to move from one organization to the next. This approach would ensure key individuals remain challenged and motivated while a group of organizations all benefit from the expertise.
There may be board members or volunteers in other positions within the organization with the talent, knowledge and experience who can effectively make the transition to a paid position. When hiring volunteers, especially to supervisory positions, be sensitive to long-term employees who may need time and support to adjust to the new role of a former volunteer.
Project staff will often have gained information about your organization's operations and might be able to move seamlessly into a core staff position.
While most consultants may prefer to stay in their line of business, there are those who would like to become staff members, if asked. In some cases, consultants worked for a organization before becoming self-employed and are interested in moving back into the sector to work.
Knowledge transfer is a key component of the succession plan. Ensure that core organizational processes are well documented. Whenever possible, ensure an overlap of time so the exiting employee can help orient and train the new employee.
The steps outlined below provide a roadmap for larger organizations interested in developing succession plans. Different organizations will implement these activities differently. While there is no right or wrong way to develop a succession plan, the following provides important components that need to be considered.
Identify key positions for your organization. These include the executive director, senior management and other staff members who would be difficult to replace because of their specialized skills or level of experience. Ask yourself which positions would need to be filled almost immediately to ensure your organization continues to function effectively.
Review and list your current and emerging needs. This will involve examining your strategic and operational plans to clearly articulate priorities.
Prepare a chart that identifies the key positions and individuals in the organization. The positions might include those listed in step 1 and/or others that are pertinent to your organization, such as volunteers.
Evaluate/assess all staff members with the goal of identifying those who have the skills and knowledge or the potential, along with the desire, to be promoted to existing and new positions.
Based on the evaluation and on the requirements of your strategic plan, identify the key person or people you will want to develop and nurture for the future, the position you would like to groom them for, and the timeframe required to prepare them. Consider different ways of developing your employees, such as: self-development, books/journals, mentor programs and special project work.
Identify the career paths that the selected individuals should be following. Customize the path to fit the individual's abilities and talents by developing an action plan. The plan must be dynamic – able to be changed as the individual's and the organization's needs change. It must also consider the specific needs, learning styles and personalities of the individuals involved in order to be effective.
Formalize education, training, coaching, mentoring and assessment activities. The mix of activities included within the action plan should be linked to timelines and specific outcomes.
If possible, move people into different areas for experience and training before they are needed in critical positions. Have individuals job-shadow for an agreed upon period of time to give the successor a real sense of the responsibilities and to allow the organization the chance to determine whether the individual really is suited for the new position.
As people leave and new people assume their responsibilities, the plan will have to be updated to identify the next person to be groomed for promotion and the requirements of her or his individual action plan. For organizations that engage in an annual (or regular) strategic planning process, the succession plan should be included in that discussion.
Be prepared to address issues such as concerns of staff who have not been selected for career advancement. Ensure alternative paths are identified to allow all employees who are interested in career enhancement to be given some type of professional development opportunity. Professional development can include such wide ranging activities as formal education and training, workshops and seminars, as well as less formal learning opportunities such as the chance to represent the organization at a consultation.
Recognize that no matter how well you plan, something can still happen which the succession plan has not addressed. For example, you may have dutifully trained a "second" only to have that person leave. Even though there may be no one able to fill the breach immediately, the succession plan will ensure that there is a process for you to follow in filling the position.
Tips for successful succession planning:
Secure senior management and board support for a succession planning process. This gives employees and staff an understanding of how important succession planning is to the organization.
Review and update your succession plan regularly. This ensures you reassess your hiring needs and determine where the employees identified in the succession plan are in their development.
Develop procedure manuals for essential tasks carried out by key positions. Include step-by-step guidelines.
Adequate time should be provided to prepare successors. The earlier they are identified, the easier it is on the individual to be advanced and on other employees within your organization who will know whether certain options are available to them.
Understand that your succession plan will be a unique reflection of your organization. Succession plans are as different from each other as the organizations for which they are developed.
Tools and Templates:
Leadership Transitions – Checklist of Key Interventions (PDF 249KB)
Guide to Setting up a Leadership Transition Committee (PDF 65KB)
Transition Committee – Duties and Responsibilities Checklist (PDF 85KB)
External links on succession planning:
Guide prepared by the Cultural Human Resources Council
Books and articles referenced in this section:
Axelrod, Nancy. Chief Executive Succession Planning. BoardSource. This book may be purchased through BoardSource.
Nonprofit Quarterly. Leadership Transitions: Critical Thresholds. Winter 2002.
Luhn Wolfe, Rebecca. 1996. Systematic Succession Planning: Building Leadership from Within (Crisp Fifty-Minute Series).
Robinson, Maureen. 2004. Nothing Succeeds like Succession. Contributions Magazine, Chronicle of Philanthropy.
Wolfred, Tim. 2008. (Anne E Casey Foundation): Building Leaderful Organizations: Succession Planning For Nonprofits