Preparing Internal Candidates for Leadership Roles
Assess successor readiness, track internal hiring and plan development around critical roles.
A leadership vacancy can leave a business without someone ready to take over. Succession planning gives managers a way to identify possible replacements and agree on the experience each person needs before a role opens.
Internal mobility includes promotions and moves between teams. A succession plan connects those moves to future staffing needs. Start with the roles that need cover, then assess candidates against the work each role requires.
In ATD’s 2018 research, summarized in an article published in 2019, 35% of surveyed organizations had a formal succession planning process. This is a historical survey result. For managers building a program, the practical task is to turn candidate assessments into development plans that are reviewed as business needs change.
Source note: The other statistics in this report were retained from its earlier version. Their source documents, sample sizes and methods have not been verified. These figures should not be treated as current population estimates or established effects of succession planning.
Executive Summary
Figures in the Report
- The report lists an increase in internal hiring from 32% to 39% between 2023 and 2024. The figures alone do not establish a change in hiring costs.
- The sector comparison lists succession program adoption at 78% in technology and 45% in retail.
- The benchmark set lists internal fill rates for critical roles of 87% for top-quartile companies and 42% for bottom-quartile companies, a difference of 45 percentage points.
- The failure breakdown assigns 60% to poor communication, 25% to inadequate successor preparation and 3% to poor plan design. The original source and the population covered by this breakdown need to be confirmed.
Putting a Succession Plan into Practice
Maintaining the Program
The 35 percent formal-process figure comes from ATD’s historical survey. It cannot establish today’s adoption rate. Within a business, the more useful question is whether a named candidate has the experience to take over each critical role.
The report includes a claim that 70% of succession plans fail within two years when senior sponsorship fades. It also gives leadership development spending as 2.5% of annual payroll. Both figures require source confirmation. To keep a program on track, assign an accountable sponsor and connect the training budget to specific candidate development needs.
Poor communication accounts for 60% of failures in the report’s breakdown. Confirm the underlying study before applying that proportion to a corporate program. Managers can make the process clearer by explaining selection criteria and holding regular reviews of each candidate’s progress.
Give each development plan an owner and a review date. A candidate’s next assignment should address a named gap in experience or skills. Record the result so that the next review can assess progress.
Industry Differences
Roles need different kinds of preparation. Compare the qualifications and experience required for each position before choosing a development path.
The industry figures list adoption at 78% in technology and 72% in financial services. They do not explain why companies adopted their programs. When planning for a technical role, review which skills are likely to change; for a regulated role, include the relevant approval and qualification requirements.
A written plan can still leave candidates short of experience. Give them work that tests readiness for the target role, such as leading a project across teams or taking responsibility for a decision they will face after promotion.
The report lists healthcare adoption at 65% and states that more than half of healthcare organizations need development plans and job shadowing that take years to complete. The source for that claim remains unverified. Clinical roles may require qualifications and supervised experience that limit how quickly a candidate can become ready. Retail’s listed 45% is an adoption rate; it is not a measure of how far the sector is behind.
For a business with seasonal staffing needs, review senior roles separately from temporary frontline vacancies. Identify which responsibilities would be left uncovered if a manager departed during a busy period.
Regional Adoption Figures
The regional comparison records adoption figures for different areas. Without the original survey dates and samples, it cannot support conclusions about regional progress or the reasons for any difference.
The listed adoption rates are 42% for Europe and Central Asia, 35% for North America and 31% for the Middle East and Africa. A single comparison cannot show whether those rates are rising or falling.
Asia Pacific is listed at 28%, and Latin America and the Caribbean at 25%. These figures do not establish that economic conditions or family ownership caused the differences. Assess each business’s succession arrangements using its own staffing needs and leadership risks.
Where a critical role has no ready successor, review how the business would cover the work during a vacancy. Document the knowledge that needs to be transferred and the time required to recruit or prepare a replacement.
Five-Stage Maturity Framework
Use the five stages below as a practical checklist for reviewing the arrangements in place. The table describes observable practices. It is not a validated scoring model, and a higher stage does not guarantee better financial performance.
| Maturity Stage | Level Description |
| Level 1: Initial | Succession is discussed when a vacancy occurs. There is no written plan or regular review of potential replacements. |
| Level 2: Developing | Some senior roles have named potential replacements. Documentation is limited, and candidate assessments are informal. |
| Level 3: Defined | Written plans define the experience and skills required for covered roles. Managers review candidates regularly and record development needs. |
| Level 4: Managed | Plans reflect business priorities. Managers track candidate readiness and review development progress using agreed measures. |
| Level 5: Continuous Improvement | Managers use review results to improve the process. Candidates gain experience across teams, and plans are updated when roles or staffing needs change. |
Assessing Readiness
Review your program against five questions. Support each answer with a current plan, a candidate assessment or a record of completed development work.
- Is there a written succession plan with an owner and a scheduled review?
- Does the plan cover every role whose vacancy would disrupt essential work?
- What evidence supports each candidate’s readiness, and which skills still need development?
- Do the roles and development priorities reflect the business’s current plans?
- Can candidates gain the experience they need through assignments, coaching or job shadowing before a vacancy arises?
Use the answers to identify the next change your program needs. Set a deadline and decide what evidence will show that the change is complete.
Costs and Return on Investment
Compare the full cost of preparing an internal candidate with the cost of filling the same role externally. Include training and the time managers spend coaching, as well as recruitment fees and the work required to help someone settle into the role.
The earlier version of this report included the following benefit figures. Their sources and measurement methods remain unverified:
- Hiring cost savings of 60% to 75% compared with external recruitment. Check which costs are included before using this range in a budget.
- An increase of 20% in employee engagement and an improvement of 18% in the leadership pipeline. The measures behind these percentages need to be defined.
- An 8% increase in revenue per employee. The figure alone cannot show that succession planning caused the change.
- A reduction of 17% to 40% in time to fill a role internally. A useful comparison needs the same role types and a consistent definition of the hiring period.
ATD’s historical 35% formal-process result and the benefit figures above measure different things. They should not be combined to claim that businesses are ignoring a proven financial return. Build the business case from your own hiring costs and vacancy records.
Leading and Lagging Indicators
Leading indicators track preparation before a vacancy occurs. Lagging indicators record what happened after a role was filled. Use both, with clear definitions and a consistent review period.
In the report’s benchmark set, ready-successor coverage is 85% for top-quartile organizations and 35% for bottom-quartile organizations. Coverage means that a role has at least one candidate assessed as ready to take over. The set also lists a 3:1 ratio of high-potential candidates to positions and 90% participation in development programs. These are separate measures; participation alone does not establish readiness.
The listed time to fill is 34 days for the top quartile and 91 days for the bottom quartile. Internal fill rates are 87% and 42%, respectively; employee retention is 92% and 64%. The source must define how the quartiles were selected and which employees and roles were counted. These comparisons do not establish that succession planning caused the differences.
| Indicator Type | Metric | Top-Quartile Figures (Unverified) | Bottom-Quartile Figures (Unverified) |
| Leading | Succession-ready coverage | 85 % of critical roles have at least one ready successor | 35 % coverage |
| High-potential identification ratio | 3:1 candidates-to-position ratio | Not reported | |
| Development-program participation (high-potential employees) | 90 % of identified high-potential employees enrolled in targeted development | Not reported | |
| Lagging | Average time-to-fill (critical roles) | 34 days | 91 days |
| Internal fill success rate | 87 % of key vacancies filled internally | 42 % | |
| Employee retention rate | 92 % overall retention | 64 % |
The missing table entries are marked “Not reported.” Keep them blank in calculations until source data is available. The two charts retain the figures from the earlier report and share the source limitations described above.
Where Plans Need to Adapt
A plan needs to change when a target role changes or a candidate leaves. Review assumptions about future vacancies alongside each candidate’s progress.
Changing Roles and Limited Resources
If technology changes the work a leader will do, update the role requirements before assessing candidates. Prepare people for the responsibilities the business expects to need. A development plan built around an outdated job description can direct effort toward the wrong skills.
A smaller business can start with the roles whose absence would cause the greatest disruption. Give candidates clear feedback about the experience they need. Managers also need time to supervise assignments and discuss progress; a plan without that capacity will be difficult to carry out.
Keep an interim cover plan for unexpected departures. Name the person who can take responsibility immediately and document which decisions need approval from someone else.
Other Ways to Fill a Skills Gap
External recruitment may be appropriate when no internal candidate has the required experience within the available time. A partnership or acquisition can bring in a team, but it also requires its own assessment of costs and risks.
Contractors can cover a defined short-term need. For an internal candidate, focus development on the specific work they must be able to perform before taking over. Choose the approach according to the role, the time available and the cost of leaving the work uncovered.
Actions for Managers
Make Selection and Development Clear
The report’s failure breakdown assigns 60% to communication problems and 3% to poor plan design. Those proportions need verification and do not establish that most companies already have sound plans. Explain how candidates are assessed, give direct feedback and document the development work agreed with each person.
Check Readiness Alongside Adoption
Technology’s listed 78% adoption rate and financial services’ 72% rate describe the presence of a program. The earlier version also used the latter figure as a measure of barriers to internal movement, without a separate source. It should not serve both purposes. Check whether candidates can move between teams and complete the work needed for their target roles.
Prepare for Leadership Changes in Family Businesses
The regional figures of 25% for Latin America and the Caribbean and 28% for Asia Pacific do not measure the readiness of heirs in family businesses. An ownership transfer needs a separate plan for management responsibilities. Assess the proposed leader’s experience and arrange cover for an unexpected departure.
Separate decisions about ownership from the assessment of who can lead the business. Document responsibilities and transfer essential knowledge before the current leader steps back.
Planning the Next Review
Use a review to check whether each critical role has a credible succession path. The report’s 60% communication-failure figure remains unverified. The practical work is to agree on selection criteria, review candidate progress and resolve gaps in cover.
The earlier version described 65% of businesses as lacking formal programs by subtracting ATD’s formal-process rate from the whole. That calculation cannot establish how every remaining respondent answered: ATD separately reported that 53% had no formal process. Use the next 24 months as a planning period for your own program. Identify the roles that need cover first, assign development work and review readiness at agreed intervals.
Keller Intelligence
