{"id":4552,"date":"2019-12-09T16:12:44","date_gmt":"2019-12-09T21:12:44","guid":{"rendered":"https:\/\/promptaai.com\/?p=4552"},"modified":"2021-04-27T15:05:12","modified_gmt":"2021-04-27T19:05:12","slug":"succession-planning","status":"publish","type":"post","link":"https:\/\/promptaai.com\/es\/succession-planning\/","title":{"rendered":"Succession Planning"},"content":{"rendered":"
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Since the beginning of 2006, 7918 Baby Boomers reach the age of 60 every day in the United States and are eligible for retirement. In Canada<\/strong>, 5000 baby boomers are eligible every week. In fact, 76 million Boomers will retire and there are only 46 million GenXers to replace them. <\/strong>The Boomers\u2019 retirements represent 40% of the current workforce. It is very expensive to replace people externally. Aside from the recruiting costs, there is lost productivity during the position\/culture learning curve. Replacing a senior leader can cost two to four times his\/her annual salary.<\/p>

Succession plans<\/strong> are another form of risk management. A succession plan should accompany the company\u2019s business plan. But few CHRO\u2019s, executives, and business owners, consider succession until they are reaching retirement age or decide that they want to leave the business.<\/p>

There are two aspects to succession \u2013 voluntary and involuntary<\/strong> \u2013 and while it essential to have a plan for both, involuntary succession can cause the most chaos and issues and really argues the need for a plan. Involuntary succession occurs when the proverbial bus comes along and suddenly the owner, partner or key leader is unable to work or worse, is deceased. Voluntary succession occurs when a business owner, partner or senior manager decides to retire or leave the business.<\/p>

Most business consultants, estate planners or lawyers, will tell you that part of your succession plan is knowing or determining the value of your business. They see this as necessary whether one partner is stepping down or if the owner plans to sell the business. \u00a0And when looking at the value of the business, they fail to consider many aspects which add or subtract from the value. They think about the clients and the amount of revenue and income the business generates. The value of equipment and supplies are also factored in. However, many other features contribute to the salability of the practice.<\/p>

Features such as employee records, job descriptions, performance reviews, EEO and unemployment claims, employee and customer retention, consistent hiring practices, employment taxes, to name just a few, affect the value of the business to a potential buyer.<\/p>

A true succession plan is much more than just the value of the business even with the features above taken care of and in compliance.<\/p>

There should be two plans<\/strong> \u2013 the emergency plan for involuntary succession and the long-term plan for voluntary succession. Like the business plan, the succession plan should be updated at least every five years or as people and operations change. It should cover the following:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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