Relative measure of the growth rate of the succession pool.
(Headcount. Successor pool –Headcount. Successor pool. Prior year) / Headcount. Successor pool. Prior year * 100
The Successor Pool Growth Rate establishes the percentage increase in headcount of the succession pool over the previous year. A result of 5 per cent indicates that the current successor pool is 5 per cent larger in size than it was last year.
One important component of succession management is the identification of potential managerial successors. A small successor pool likely indicates that the workforce lacks sufficient skills and experience to fill leadership positions.
Organisations in this position may need to look externally to fill many of its managerial positions, which might create excessive costs and result in a lack of corporate history in key positions or a significant shift in organisational culture.
Once the succession pool is identified, employees in the pool can be continually developed to successfully assume the next generation of leadership within the organisation.
Successor Pool Growth Rate provides organisations with an indication of their success in the past year at developing future leaders to the point where they could be named as potential successors.
The measure also takes into account turnover from the successor pool; for the growth rate to be positive, new additions to the successor pool must exceed the terminations (or removals) from that pool.
Organisations typically identify potential successors from a succession management table or system.
Employers may find it useful to analyse Successor Pool Growth Rate across various management designations (e.g. Team Leader, Manager, Director), functions, job families, organisational units and geographies to understand the ongoing development of the successor pool among these areas.
The usefulness of Successor Pool Growth Rate as a measure of employee development and the effectiveness of succession management processes depends on the appropriate identification of successors.
Additionally, this measure does not indicate whether potential successors have a broad range of skills or are ready to assume the same position and, thus, it is a measure of breadth and depth.
Organisations base targets for this measure on their estimation of how many ready successors are necessary for each position, the readiness level of those employees identified as potential successors and the expected turnover of both the employees in the successor pool and the managers to be succeeded.
Relative targets against a benchmark group are not likely to be useful for this measure because of the differences in managerial populations and succession management practices across organisations.