Succession planning is a strategy for passing on leadership roles, often the leadership or ownership of a company to an employee or new leader. Succession planning ensures that the organization runs smoothly after an organization's most essential employees retire and leave the company.

Succession planning assesses each leader's talents, recognizes possible successors both within and outside the organization, and prepares those workers to take over in the case of internal replacements. Succession planning is not a one-time event; it should be reevaluated and possibly updated each year or when the organization's needs shift.

Having a formalized succession plan in place has many benefits for both employers and employees:

• Employees realize that there is a possibility for promotion and likely ownership, leading to greater empowerment and work satisfaction.

• Knowing that the organization is preparing potential opportunities reinforces the growth of careers among employees.

• With succession planning, management and staff are better able to share business principles and vision.

• Cultivate a new generation of leaders while offering an exit strategy for company owners who want to sell their stakes.