Every organization, no matter the size or industry, is impacted by an employee’s long-term leave, transfer, or retirement. This can lead to challenges when a past employee knew where a document was, how to update it, or the nuances of manual treasury and accounting processes. This results in increased workload and reduced productivity for some employees.
There’s a better way than simply doing your best through these challenges. Succession planning involves putting together a strategy for passing on a role to another employee when someone leaves. This plan ensures that your business runs smoothly after an employee leaves.
Your organization’s succession planning strategy will be unique to its needs and goals. For example, finance departments have unique roadblocks and strategies to consider in their succession planning strategies. Keep reading to learn more about leveraging technology to prepare a successful succession strategy.
1. Assess Future Changes and Risks
The first step in succession planning is to look ahead at any upcoming departmental changes and risks you already know about that would affect the continuity of the department’s operations. An example of a future change might be the retirement of a long-time team member who was responsible for verifying, paying, and posting all outstanding debt payments. A potential risk could be the team members left behind not knowing when payments are due and who to make the payments out to. This situation could lead to late or missed payments or debt payments being made to an incorrect bank.
To Do: Before developing a succession planning strategy, identify competencies on the team and organizational gaps across levels. Also, list future goals and challenges as clearly as possible. Emergency succession planning can also be a good idea because employees might suddenly become ill or apply for an unplanned extended absence from work. The best time to plan for an emergency is when you aren’t facing one.
How Technology Can Help: A cloud-based solution means employees can access key documents and information on-site or remotely, plus you will have a history of payments and audit trail to reference. Further, a digital solution can help you manage your financial records and assist with tedious tasks, such as payment reminders and milestone notifications. These features can help you and your team better manage any additional workload that may stem from a team member’s departure.
2. Identify Key Positions, Requisite Skills, and Candidate Sources
As a team, determine which positions are critical to the department’s continued operations and the requisite skills and experience for successor candidates. If your finance team is small, with many team members wearing more than one hat, it’s important to understand the entire breadth of their day-to-day responsibilities. For example, a debt manager of a small city is often responsible for more than just managing the city’s debt; they may also be responsible for revenue forecasting and managing the city’s investment portfolio.
Next, consider how you would source candidates for the positions. You may already have an incredible backlog of talent in your organization, but some of the most promising candidates haven’t been identified yet. Unfortunately, the challenges of day-to-day operations can overshadow the potential in your midst. If you want to look internally, consider making a short list of candidates who are already qualified or could be qualified with additional training should the need arise. If you need to look externally, determine how, when, and where you would source the candidate.
To-Do: Get creative. There are plenty of ways to prepare talented employees to step into key roles. You might pair them up with a mentor or give them special projects. But don’t be afraid to think outside the box and get inventive! Maybe there’s a new digital training program that is relevant to the role. Perhaps working on a cross-functional team will help build some necessary competencies. There might even be an opportunity for the employee to “fill in” temporarily in specific roles as they are being trained.
How Technology Can Help: When evaluating and choosing a technology solution to help you manage your financial records, it’s important to consider a solution that offers unlimited user roles and controlled access to the system. Keep in mind that younger talent may be looking for career opportunities with organizations that leverage more modern tools and systems.
3: Ensure Adequate Coverage
Determine how to ensure adequate coverage when you experience a staff shortage and how to quickly onboard the successor candidate. When possible, it’s ideal to allow the successor candidate time to work side by side with the individual they are replacing. However, in situations where this is not realistic, you may consider cross-training your staff to assist in the transition, bringing on temporary help, outsourcing specific duties to a third-party provider, or investing in a technology solution to perform certain key tasks.
How Technology Can Help: When a critical team member is no longer available to perform detailed and time-sensitive tasks, relying on software to perform these projects can ensure you have adequate coverage and that these duties are being completed. Consider which tasks are particularly time-sensitive and require a lot of heavy lifting from an individual, such as preparing amortization schedules or detailing financial notes, and look for software that can assist in these areas.
4: Document Extensively to Preserve Institutional Knowledge
Documenting knowledge related to industry best practices and standard business practices is essential in succession planning. Effectively capturing such knowledge means organizations do not have to reinvent the wheel every time, helping them easily train potential successors to get job-ready quickly and efficiently. The result? Significant reduction in the learning curve for critical positions and the need to create extensive and formal training programs.
To-Do: Create a digital repository comprising strategic and operational plans, annual/quarterly calendars of business activities, budget and audit practices, ROI sheets, and other documents that act as reliable reference points for succession planning and training.
How Technology Can Help: Look for a software solution that can track monthly and yearly key milestones with automated reminder notifications. In addition, using a reporting method embedded in software can help you create a standardized reporting model to serve as a consistent reference point that is not plagued by the nuances of scattered reporting methods.
5: Share Succession Planning Strategies with Employees
Ultimately, employees like to know that their company has a plan to deal with sudden changes in leadership or other key positions. It gives them peace of mind and insight into potential advancement opportunities. When you are transparent with your succession plan, employees know what skills and competencies they need to develop to be considered for future career options.
Having a succession plan is critical to ensuring business continuity. In particular, finance teams are increasingly being asked to do more with less, highlighting the importance of leveraging technology to automate manual or repetitive tasks, provide access and transparency across the organization, and document processes and histories.
Ensure Effective Succession Planning with DebtBook
DebtBook is a powerful and easy-to-use tool that can help your team plan more effectively for the future and ensure continuity across your organization. With DebtBook, treasury and accounting become standardized, drastically reducing the challenges that employee turnover can create. Learn more about how DebtBook can serve as a single source of truth for your teams by scheduling a demo today.
Disclaimer: DebtBook does not provide professional services or advice. DebtBook has prepared these materials for general informational and educational purposes, meaning we have not tailored the information to your specific circumstances. Please consult your professional advisors before taking action based on any information in these materials. Any use of this information is solely at your own risk.
