Succession planning is no longer about filling leadership roles reactively. Next-practice organisations use benchmarking to future-proof their leadership strategy. Organisations with strong succession plans experience faster leadership transitions, reduced disruptions, and improved valuations.
When done right, external benchmarking empowers organisations to:
- Build leadership pipelines that are aligned with market demands.
- Identify talent gaps early and take proactive steps to close them.
- Enhance organisational resilience by preparing for future challenges.
Incorporating external benchmarking into the succession planning process isn’t optional in today’s competitive landscape—it’s essential. By combining internal assessments with market insights, organisations can confidently nurture leaders who are not only capable of stepping into key roles but also poised to drive long-term growth. Succession planning has evolved from a best-practice exercise to a critical next-practice strategy. Today, organisations face the dual challenge of developing future-ready leaders while staying competitive in an ever-changing market. External benchmarking has emerged as a cornerstone of this evolution, offering critical insights to ensure leadership pipelines are both robust and market aligned.
By integrating external benchmarking into the succession planning process, you can make data-driven decisions, foster diversity, and future-proof your leadership strategy.
The Role of External Benchmarking in Succession Planning
External benchmarking is the practice of comparing internal leadership candidates against external talent to evaluate their competitiveness in the market. This process goes beyond simply identifying skill gaps—it ensures your organisation’s leadership is aligned with emerging trends and external expectations.
When looking at it as part of a Leadership Succession Framework, external benchmarking should form a core part of the succession planning lifecycle, typically taking place during the third and fourth quarters of the year. It complements other key steps – internal assessments, leadership development, and hiring decisions, by introducing an external perspective to your succession strategy.
How External Benchmarking Drives Better Succession Outcomes
- Ensures Market Competitiveness
By comparing internal candidates against external talent, benchmarking helps identify gaps in skills, experience, and readiness. This ensures your leadership pipeline remains competitive in a fast-moving market. - Identifies Growth Opportunities
Benchmarking doesn’t just evaluate readiness—it highlights specific areas where internal candidates need development. This insight informs leadership training programs, enabling targeted upskilling to close gaps. - Supports Diversity and Inclusion
External benchmarking includes assessing how well your leadership aligns with market diversity trends. By analysing external talent pools, you can ensure your succession plan fosters a more inclusive and representative leadership pipeline. - Informs Strategic Budgeting
Benchmarking data provides the foundation for setting realistic and market-aligned budgets for leadership development and external hiring, ensuring resources are allocated effectively. - Enables Data-Driven Decisions
Whether deciding to promote internally or hire externally, benchmarking equips decision-makers with robust data to support their choices, reducing bias and increasing confidence in outcomes.
Building External Benchmarking into your Succession Process
To effectively incorporate external benchmarking, organisations should follow these best practices:
- Define Critical Roles and Requirements
Use a “fit-to-brief” approach to outline the competencies, experiences, and attributes required for each critical leadership role. - Leverage Real-Time Market Data
Access up-to-date insights on compensation, skills, diversity metrics, and industry standards. Tools such as market compensation data and talent mapping software can enhance accuracy. - Compare and Analyse
Evaluate internal candidates alongside external benchmarks to identify gaps and opportunities for development. - Integrate Findings into Development Programs
Use benchmarking insights to refine leadership training and coaching initiatives, ensuring they address market-relevant competencies. - Review Diversity Metrics
Benchmark internal diversity against external market trends to create a more inclusive pipeline.
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