Succession Planning: What Gets Missed When AI Takes All the Attention

HR conversations largely center on AI – what it will automate, how fast the change is coming, and which roles it will reshape. Meanwhile, succession planning is getting pushed to the back burner. But when a key person leaves, most companies find out just how unprepared they are.

According to SHRM, only 21% of organizations have a formal succession plan in place. More than half have no plan at all. 

On top of that, ScottMadden data shows a record 4.2 million Americans turned 65 in 2025, marking a sustained retirement surge. At the same time, AI is accelerating role changes at every level, shortening the window organizations once had to build their bench.

Most Succession Plans Are Too Narrow

The typical succession plan focuses on the C-suite and happens something like this: A senior leader announces retirement, and the interview process starts from scratch as HR works to identify a replacement. That reactive approach leaves the rest of the organization unaddressed.

In fact, ScottMadden found that 72% of organizations concentrate succession planning exclusively at the executive and senior management level. But critical knowledge walks out the door at every level. A payroll manager retires after 15 years and takes institutional knowledge with her. A mid-level operations lead gets poached, and process expertise disappears overnight. Those losses don’t show up in the quarterly report. The disruption does.

Bench strength is an enterprise-wide issue. Every level of the org chart carries risk when key roles go unfilled – or get filled by people who weren’t ready.

Talent Pools Add Flexibility

A talent pool is a defined group of potential successors for a category of similar roles. Rather than identifying a single backup for a single position, organizations group roles that share core competencies and build a pool of employees who could realistically succeed in any role within that group. Done well, it expands your options and creates development paths employees wouldn’t otherwise see.

According to LinkedIn’s Future of Recruiting Report, employees stay 60% longer at companies with a strong commitment to internal hiring. Talent pools turn internal mobility from a talking point into a process.

A lot of employers run workforce planning, performance management, and learning and development as parallel tracks without connecting them to succession. That disconnect is where succession planning breaks down – and where talent pools start to matter.

Building Role Groups That Hold Up

Start with roles that carry the most operational or strategic risk if unexpectedly vacated. They don’t have to be senior positions. For example, a benefits specialist with deep carrier relationships or a payroll lead who owns a complex multi-state processing function can represent just as much transition risk as a director-level departure.

Group roles by shared competencies – not shared titles. A compensation analyst and a benefits manager have different daily functions, but both positions require regulatory fluency, analytical depth and knowledge of total rewards. Cross-development between those roles is realistic. That’s the bar: If meaningful development across roles isn’t possible, they don’t belong in the same group. And when a role could plausibly fit in more than one group, place it in the group where its inclusion creates the most development value and where the succession risk is highest.

Keep the total number of role groups manageable. Employees stretched across multiple pools end up with development plans that cover too many things to adequately prepare them for any one role. 

Fill Internally First

When building out each talent pool, start with internal candidates. Employees already familiar with the organization can usually contribute faster than outside hires. According to Wharton research, external hires are 18–20% more expensive than internal promotions – and still tend to underperform them during the first two years on the job. 

If internal talent isn’t available for a particular role group, external recruiting is the logical next step. Treating external hiring as the default, though, undermines the entire talent pool investment.

Employees Need to Know Where They Stand

Employees placed in talent pools need to know it, and they need to understand why. Gartner found that 86% of HR leaders believe career paths are unclear to many employees in their organizations. That ambiguity has a cost. LinkedIn research tracking 32 million profiles found that employees who made an internal move – whether a promotion or a lateral shift – were significantly more likely to stay three years later than those who stayed in the same role.

The conversation doesn’t have to be elaborate. Explain why the employee was selected, what development looks like going forward, and the criteria used to evaluate succession readiness. Give employees a chance to weigh in on whether they want to be on that path. Identifying someone as a high-potential successor and never telling them – or assuming interest that was never confirmed – is a development investment with no return. 

When a Role Opens Up

When a vacancy occurs, run a structured process:

• Pull the talent pool for that role group and review candidates against the specific requirements of the open position
• Meet individually with qualified candidates to confirm interest before the process goes further
• Run a formal internal interview process for all candidates who meet the criteria, and
• Make a decision and communicate the outcome to every candidate considered – including those not selected.

That last part – notifying candidates who weren’t selected – gets skipped more often than it should. Candidates who don’t get the role still need to understand the reasoning. Without that conversation, the development investment made in those employees is at risk, and so is the trust that makes the talent pool worth maintaining.

Keep the Succession Plan Current

Every time a vacancy is filled internally, it creates another one. That’s not a problem; it’s the system working. But succession plans drift out of sync – people get promoted, change direction, or leave, and role requirements shift as the business evolves. A plan that hasn’t been reviewed in 18 months may no longer reflect the organization it’s supposed to support.

Build in a formal review at least annually, and update pools after any significant organizational change: a restructuring, an acquisition, a meaningful shift in business direction. 

Succession planning that runs alongside workforce planning and business strategy builds organizational resilience. Disconnected from both, it becomes a documentation exercise. 

The Bench Doesn’t Build Itself

Companies investing heavily in AI strategy right now are making a reasonable bet on the future. The ones best positioned to follow through also know who steps in when a key person leaves.

Workforce change doesn’t pause while company leaders sort out AI priorities. Retirements are already happening, and roles are already shifting – the bench either exists or it doesn’t.

What Succession Planning Looks Like at Scale

The principles above apply whether an organization has 50 employees or 500. But scaling succession planning across a fast-growing operation – while keeping the culture intact – introduces an entirely different set of challenges.

Join our free webinar, The Recipe for Growth: Slim Chickens CEO Tom Gordon on Scalability and Succession Planning, on Wednesday, May 27, 2026. Sessions are available at 9 a.m., 12 p.m., and 3 p.m. EDT. Save your spot.