How can long-term succession planning help your company?

Succession planning is one of the biggest challenges facing SMEs and enterprises today. You’ve probably seen it happen: Experienced managers retire and there are no qualified successors to take their place. Knowledge disappears, processes break down, and employees feel lost. According to a German Chamber of Commerce and Industry (DIHK) report on corporate succession in 2024, almost three quarters of entrepreneurs in Germany are planning to pass on their life’s work to new hands as they head toward retirement. In 2023 alone, 28 percent of the businesses advised on succession were considering closing for good due to the lack of a solution.

The figures speak for themselves. According to the SME succession monitoring study 2023, around 125,000 SMEs are handed over on average each year. The pressure to find a suitable successor is increasing noticeably, but many managers are yet to develop clear strategies.

In this article, you’ll learn how to approach succession planning strategically, what role digital solutions such as eLearning and talent management play, and how to ensure knowledge is passed on. You’ll receive practical answers to key questions and specific recommendations to get your organization ready for future challenges.

Succession planning is about specifically ensuring that key positions in your company are secured long-term. It involves identifying suitable talent, preparing potential successors at an early stage, and creating structures to reliably pass on knowledge. Done right, it ensures that your company remains viable into the future. 

The urgency is very clearly reflected in the latest figures. According to the KfW succession monitoring study, around 600,000 entrepreneurs over the age of 55 in the German SME sector alone are on the verge of a generational change. Almost 40 percent of these companies have not yet made a binding succession plan. This harbors high risks to stability and competitiveness.

The Institut für Mittelstandsforschung in Bonn also points out that around 190,000 family businesses will be facing succession by 2026. One in four handover processes fails because there are either no suitable candidates or the start is delayed for too long.

Forward-looking succession planning protects your business from these scenarios. It strengthens trust among your employees, safeguards valuable expertise, and avoids you having to implement expensive emergency solutions. If you take action in good time, you’ll gain clarity and be well prepared for the transition.

As already mentioned, succession planning means much more than just looking for a new managing director. The concept includes all the steps needed to ensure that critical knowledge, experience, and networks are retained within your company—regardless of whether we’re talking about specialists, division managers, or the top management level moving on.

Succession planning starts with an analysis: Which roles are so important that losing them would jeopardize operations? This is then followed by the targeted identification of potential successors and the creation of individual development plans. One key objective is to pass on knowledge and skills at an early stage, before experienced employees leave.

Succession planning is not just for people at senior management level. Every year, large sections of the workforce in Germany retire. According to the Federal Statistical Office (Destatis), a total of 12.9 million working people in Germany will reach retirement age by 2036. This corresponds to almost 30 percent of all people in employment who were of working age in 2021.

This development shows the extent to which demographic change is shifting the labor market. With every retirement, valuable knowledge about processes, customers, and technologies disappears. This applies to all roles: specialists, project managers, sales, IT and HR departments…

A structured succession plan ensures that this knowledge is retained, successors are prepared in good time, and responsibilities are clearly defined, so your company remains stable and competitive even in times of change.

You’ll find key positions in practically every area of your company. You can recognize them by the fact that the departure of those in the role would have considerable consequences for processes, customer satisfaction, or sales. Here are some specific examples:

• Technical experts: Specialists with decades of expert knowledge about machines, processes, or products that is insufficiently documented.
• Project managers: Managers who handle complex customer projects, maintain networks, and have important experience.
• Sales managers and key account managers: Employees who have long-standing relationships with key customers, and whose departure could therefore cause a drop in sales.
• IT managers: Managers who are familiar with central systems, data architectures, and security concepts.
• Plant managers and foremen: Specialists and managers in production who coordinate daily processes and safeguard knowledge of quality standards.
• Human resources managers: HR specialists who manage recruitment processes, remuneration systems, or employment law-related procedures.

All these areas show how important timely and structured succession planning is. You avoid standstill, reduce staff turnover costs, and give your team the confidence that the company will remain a reliable employer even in times of change.
 

Implement them effectively and you’ll lay the foundations for sustainable succession planning, whether you work in an SME or a large corporation.

In the previous step, you saw how important it is to start securing knowledge early on. Many companies underestimate this aspect of succession planning. However, when long-standing employees leave, it’s often not only specialist knowledge that disappears with them, but also valuable experience and well-established processes.

To prevent this from happening, you need to take a strategic approach to knowledge transfer right from the outset. A well thought-out concept ensures that important expertise is not lost, but is instead passed on systematically.

The following approaches have proven successful in practice:

Start securing knowledge early on—combine personal handovers with digital learning opportunities and establish clear structures. This ensures that your company will remain successful even when experienced employees leave.

When it comes to succession planning, many companies rely primarily on personal handovers and traditional training. These measures are important, but are often not enough to secure knowledge long-term and prepare successors effectively.

Digital learning and talent management solutions offer decisive advantages here. They help to systematically develop skills, standardize processes, and make knowledge transfer flexible.

eLearning enables you to make knowledge available at any time. New managers and specialists learn at their own pace, whether they’re on site, working from home, or on the move.

Digital learning platforms offer you:

• Standardized training content that can be updated at any time.
• Flexible learning that adapts to individual development plans.
• Transparent learning progress that is easy to track.

During the transition phase in particular, eLearning ensures that all relevant information—from technical expertise to your corporate philosophy—is communicated systematically.

A modern talent management system is the ideal companion to eLearning. It ensures you recognize potential at an early stage, define individual learning paths, and document progress.

The most important advantages include:

• Competence profiles that make training needs visible.
• Development plans that prepare successors specifically for their future duties.
• Documented evaluations you can use to measure progress.

This creates transparency for everyone involved, from HR management to the specialist department concerned.

Together, eLearning and talent management form a strong foundation for a successful succession planning strategy. They combine flexibility, transparency, and sustainability, while giving your company a decisive knowledge advantage in the long term.

If you’d like to find out more about how modern eLearning solutions can support your succession planning or personnel development processes, we’d be happy to offer you a personal consultation.