Workforce and succession planning: getting started

Authored by Caitlin Humrickhouse and Allison LeMay

Workforce development and succession planning is crucial to creating a sustainable and resilient organization and yet many local and state governments, community owned utilities and not-for-profit organizations have not implemented programs. When concentrating on mission-critical work, it can be tough to see what the rush is to add more to your plate.

You may be surprised to hear workforce and succession planning efforts dovetail into processes and programs that likely already exist within your public sector or not-for-profit organization. The amount of time and budgetary resources spent implementing a plan can be minimal and the benefits enormous.

This is the first part in Baker Tilly’s three-part workforce and succession planning series which breaks down planning into concrete actions you can start implementing right away. The diagram below provides an overview of the workforce and succession planning process and the key processes that tie into a successful program. In this article, you will learn more about defining your organization’s outlook, identifying critical positions and prioritizing the positions to include in your workforce/succession plan.

Step 1: Defining your organization’s outlook: retirements and high turnover positions

As with any project, you have to understand the current state of your public sector or not-for-profit organization before you can plan where you want to go and how you will get there. This starts by having a clear picture of your future workforce needs. Two primary data inputs will paint this picture:

  • Retirements: which positions have employees that will be eligible for retirement or early retirement within the next five years and within the next five to 10 years? This analysis can be performed in most organizations by using an employee’s age, hire date/years of service and rules that govern retirement eligibility.
  • High turnover positions: which positions have historically had a high rate of turnover for reasons other than retirement, such as employee resignation or termination?

After performing these analyses, stratify the data by department or division. A department with 30 percent of its workforce eligible for retirement in the next five years may become more of a priority than a department with 10 percent eligible for retirement.

To illustrate this point, check out the table below that contains a sample data set for a human resources department and a finance department.

Department/position
Employee
Eligible for retirement
in 0 – 5 years
High turnover
position
Finance – Finance directorEmployee AYesNo
Finance – Accounting managerEmployee BYesNo
Finance – AccountantEmployee CYesNo
Finance – AccountantEmployee DNoNo
Finance – Accounting clerkEmployee ENoYes
Percentage of finance employees eligible for retirement
60 percent
Human resources – HR directorEmployee FNoNo
Human resources – HR generalistEmployee GYesNo
Human resources – HR generalistEmployee HNoNo
Human resources – HR generalistEmployee INoNo
Percentage of HR employees eligible for retirement
25 percent

In this example, the finance department faces a more serious situation than the human resources department. Not only are 60 percent of finance employees eligible for retirement within the next five years, but also, one of the nonretirement eligible positions (accounting clerk) has historically high turnover. It is also important to look at the potential “succession paths” when reviewing this data. If the finance director, accounting manager, and one of the accountants retired within the same year, would the remaining accountant or accounting clerk be ready to move into the role of finance director or even the role of accounting manager?

Step 2: Identifying critical positions

Critical positions are those vital for achieving strategic success and carrying out your organization’s mission; without extremely capable people filling these roles, future success can be compromised. Did you know critical positions extend beyond those in leadership (city/county manager, directors, etc.) or those with imminent retirements? In fact, 10-15 percent of your organization’s workforce should be considered critical and included in your workforce and succession planning program.

Think outside the box. Specialty, niche positions such as a cybersecurity program administrator could be considered critical as could front-line positions that provide direct service to customers and citizens. Review all positions on your payroll for their impact to the organization and always have an internal pipeline and/or external recruitment plan to ensure these critical positions are never vacant for long.

With a list of critical current positions in-hand, use the following questions to formulate discussion around each critical position and their future in your organization.

  • How will the state of the industry today affect business operations for the next one to five years? And five to 10 years?
  • What operations are critical to the future of your industry?
    • Will they be discontinued or downsized? Or will they grow or remain constant?
  • Will reengineering, process improvement or technology impact the department in the future?
  • What job functions, if any, will be consolidated?
  • Will the projected workload volume of work increase or decrease?
  • Will staffing levels change? If so, how?
  • What skills and abilities will be needed to match these changes?

This discussion may illuminate your understanding of critical positions. A position you thought would be critical may not actually be relevant in five years. Meanwhile there may be a critical need for a new position not currently on staff. Once this exercise is complete, you will have a final list of critical positions independent of pending retirements and potential turnover.

Step 3: Prioritizing positions for workforce and succession plan inclusion

In an ideal world, public sector and not-for-profit organizations would have unlimited time and budgetary resources to create a workforce/succession plan for every position with the organization. However, when working with limited resources, it’s best to prioritize the positions for which a workforce development and succession plan are created.

Crosscheck your critical positions list against your potential retirements and high turnover positions list to develop a list of prioritized positions. Positions with high turnover and/or high potential for retirement within the next five years that are also listed as critical should be deemed high priority positions. Resources needed to develop a workforce/succession plan should be routed first to these prioritized positions. Then dedicate any remaining resources to any remaining critical positions. At this point, if resources remain, allocate them to any remaining positions with impending retirements or high turnover.

What’s next? Determining core competencies and identifying top talent for succession

In part two of Baker Tilly’s three-part series on workforce and succession planning, local and state governments, community owned utilities and not-for-profit organizations will learn how to define position competencies and updating job descriptions, identify succession candidates and conducting performance reviews and tie organizational assessments into the succession planning process.

View the full workforce and succession planning series >

For more information on this topic, or to learn how Baker Tilly workforce and succession planning specialists can help, contact our team.