Business succession planning is a critical process for ensuring the long-term success and sustainability of any company. It involves identifying and developing new leaders who can step in when current leaders leave, retire, or transition out of their roles. One of the critical aspects of this process is employee retention. Retaining employees during a transition is essential for maintaining stability, minimizing disruptions, and ensuring a smooth transition. In this blog post, we will explore the importance of employee retention in business succession planning, with a spotlight on psychological safety and managing change.
Psychological safety is a critical component of employee retention during a transition. What is psychological safety? Psychological safety refers to the belief that employees can speak up, share their thoughts and ideas, and take risks without fear of negative consequences. When employees experience the feeling of being psychologically safe, they are more likely to contribute their best work and ideas, work collaboratively with others, and take calculated risks.
Creating a sense of psychological safety for employees can help ensure that they are fully invested in the success of the transition and are more willing to help new leaders succeed. During times of change or transition, employees, particularly remote workers, feel an increased level of anxiety surrounding the possibility of potential layoffs and that’s making them less productive.
Without a sense of psychological safety, employees can become disengaged, and unproductive, and may even leave the company, leading to significant costs, disruptions, and delays.
To create a culture of psychological safety, companies must prioritize open communication, transparency, and empathy. Organizations should encourage employees to share their thoughts and ideas, provide regular feedback and recognition, and address any concerns or issues promptly. By doing this, companies can build trust and loyalty with employees, leading to a smoother transition and long-term success.
Managing through the Change
Managing change is another crucial aspect of employee retention during a transition. Change can be difficult and unsettling for employees, and it’s essential to ensure that they feel supported and informed throughout the process. This involves providing clear and consistent communication, training, tools, and support to help employees adapt to new roles and responsibilities.
During a business transition, employees may experience a range of emotions, including uncertainty, anxiety, and fear. These emotions can impact their productivity, engagement, and overall performance. To mitigate these issues, companies must provide ongoing support to employees throughout the transition. This may involve offering training, mentorship, and career development opportunities, as well as regular check-ins to ensure that employees feel supported and valued.
Additionally, companies must provide clear and transparent communication throughout the transition. This includes informing employees of the timeline, process, and goals of the transition, as well as any changes to their roles or responsibilities. By doing so, employees will feel more informed and invested in the process, leading to a smoother transition.
Retaining Key Talent
Finally, retaining key talent is critical to the success of any business transition. Losing key employees during a transition can lead to significant disruptions and delays, as well as increased costs associated with hiring and training new staff. Retaining key employees helps ensure continuity and stability during the transition, as well as maintaining valuable institutional knowledge and skills.
To retain key talent during a transition, companies must prioritize employee engagement and recognition. This involves providing regular feedback, recognition, and opportunities for career development and growth. Companies should also consider offering incentives or bonuses to employees who stay through the transition, demonstrating their commitment to retaining their top talent.
Employee retention is a critical aspect of business succession planning. Retaining employees during a transition helps maintain stability, minimize disruptions, and ensure a smooth transition. To do so, companies must prioritize psychological safety, managing change, and retaining key talent. By doing so, they can position themselves for long-term success and sustainability.
Todd Vroman is an organizational psychologist and strategist with 28 years’ experience that includes working in diverse roles in major companies in the insurance, finance, and investment industries, including Principal Financial, MassMutual, Morgan Stanley, and The Hartford. His varied background has included business development, sales, marketing, training and team building, along with managerial responsibilities.