Succession Planning in Healthcare: How to Build a Stronger Leadership Pipeline

Healthcare organizations cannot afford to wait until an important leader resigns, retires, or takes an unexpected leave of absence to think about who comes next.

Leadership vacancies can disrupt staffing and employee morale. They can also weaken regulatory oversight or affect the continuity of patient care.

Succession planning helps healthcare organizations prepare before these transitions happen. It creates a repeatable process for identifying critical roles and developing employees who may be able to assume greater responsibility.

Effective succession planning is not limited to choosing the next CEO. It should also include clinical leaders, department managers, and other employees whose absence could create significant risk.

What Is Succession Planning in Healthcare?

Succession planning is the process of identifying positions that are critical to an organization. It also involves preparing employees who could potentially fill those positions in the future.

The process usually includes:

• Identifying critical roles
• Defining the competencies required for each role
• Assessing employees’ performance and potential
• Identifying possible successors
• Creating development plans
• Reviewing succession plans regularly

Succession planning is different from replacement planning.

Replacement planning asks who can step into a position when it becomes vacant. Succession planning takes a longer-term view. It considers what the organization will need from future leaders and gives employees time to develop the necessary skills.

A replacement may keep a department running. A succession plan is intended to prepare someone to lead that department successfully over time.

Why Succession Planning Matters in Healthcare

Leadership continuity matters in every industry. However, the consequences of an unplanned vacancy can be especially serious in healthcare.

Hospitals and health systems depend on qualified leaders to oversee clinical quality and staffing. Leaders are also responsible for compliance and financial performance.

Healthcare organizations face broad workforce pressures as well.

The Association of American Medical Colleges has projected a shortage of up to 86,000 physicians by 2036. The National Council of State Boards of Nursing reported that more than 138,000 nurses left the workforce between 2022 and 2024. Nearly 40% of nurses surveyed said they intended to leave the workforce or retire within five years.

These pressures make it risky to assume that an experienced external candidate will always be available.

Maintain Leadership Continuity

A succession plan provides clarity about who can provide interim coverage. It also helps identify who may be prepared to assume the role permanently.

This can reduce disruption and prevent important responsibilities from falling through the cracks.

Succession planning can also help preserve institutional knowledge. Experienced leaders often understand the organization’s history and informal decision-making processes. They may also hold important relationships that are difficult to replace quickly.

Improve Retention and Internal Mobility

Employees are more likely to see a future with an organization when career paths are visible.

Succession planning can show strong performers that the organization is willing to invest in their growth. It can also create development opportunities before a promotion becomes available.

Internal candidates already understand the organization’s systems and culture. With the right preparation, they may be able to step into a new role more quickly than an external hire.

Support More Consistent Promotion Decisions

Succession decisions often become less objective when they are made under time pressure.

A structured process gives leaders time to define clear competencies and compare candidates consistently. It can also expand access to development opportunities.

Organizations can use succession planning to examine whether their leadership pipelines reflect the workforce and the communities they serve.

Which Healthcare Roles Should Be Included?

Succession planning should not be limited to the C-suite.

Healthcare organizations depend on many roles where a prolonged vacancy could affect care delivery or organizational stability.

Clinical Leadership Roles

Clinical leadership roles may include:

• Charge nurses
• Nurse managers
• Directors of nursing
• Medical directors
• Physician executives

Organizations should also consider employees with specialized clinical knowledge. These employees may not be formal executives, but replacing their expertise could still be difficult.

Administrative and Operational Roles

Administrative roles may include:

• Quality and patient safety leaders
• Compliance officers
• Human resources leaders
• Finance leaders
• Technology leaders

The importance of a role should be determined by organizational risk. Its position on the organizational chart should not be the only consideration.

Executive Roles

Executive succession often includes positions such as:

• Chief executive officer
• Chief financial officer
• Chief nursing officer
• Chief medical officer
• Chief compliance officer

Boards and senior leaders should maintain long-term succession plans for these roles. They should also establish emergency coverage plans.

How to Create a Healthcare Succession Plan

Succession planning can become overly complex.

Organizations are often better served by starting with a limited number of critical roles. They can then expand the program over time.

The following process provides a practical starting point.

1. Connect Succession Planning to Organizational Strategy

Begin by considering where the organization is going.

A healthcare organization expanding outpatient services may need leaders with new capabilities. A health system investing in digital care may need leaders who can manage technology adoption and organizational change.

Questions to ask include:

• Which services or departments are expected to grow?
• Which capabilities will future leaders need?
• Where is the organization most vulnerable to turnover?
• Which roles are necessary to execute the strategic plan?

Succession planning should prepare employees for the organization’s future. It should not simply reproduce the current leadership structure.

2. Identify Critical Roles

Not every position needs a formal succession slate.

Focus first on roles where a vacancy would have a significant effect on patient care or regulatory compliance. Staffing stability and financial performance should also be considered.

Evaluate:

• The operational impact of a vacancy
• The likelihood that the incumbent will leave
• The difficulty of finding a replacement
• The time required to prepare someone for the role
• The strength of the internal pipeline

Organizations can classify roles by risk.

For example, Tier 1 may include positions that need immediate coverage plans. Tier 2 may include important roles with a longer preparation horizon.

3. Define the Competencies Required for Each Role

A succession plan becomes subjective when leaders rely on vague ideas such as “executive presence” or “leadership potential.”

Instead, define the skills and behaviors required for success.

Competencies may include:

• Clinical or technical expertise
• People management
• Communication
• Financial judgment
• Regulatory knowledge
• Change management

Healthcare organizations can use established frameworks as a starting point.

The American Organization for Nursing Leadership publishes competencies for nurse leaders. The American College of Healthcare Executives also provides a competency framework for healthcare managers.

Each organization should adapt these frameworks to its strategy and operating environment.

4. Assess Performance and Potential Separately

Strong performance in a current role does not always indicate readiness for a larger one.

A highly skilled clinician may not want to manage a department. A successful department manager may need more financial experience before moving into an executive role.

Evaluate:

• Current performance
• Ability to handle greater complexity
• Leadership behaviors
• Career interests
• Readiness to assume the role
• Remaining development needs

Tools such as a 9-box grid can help leaders discuss performance and potential. However, these tools should support a broader conversation. They should not determine succession decisions on their own.

Talent discussions should also include multiple perspectives. This can reduce the influence of one manager’s opinion.

5. Identify More Than One Potential Successor

Naming a single successor creates another point of failure.

That employee may leave, decline the role, or stop progressing as expected.

Whenever possible, identify several candidates at different levels of readiness.

Readiness categories might include:

• Ready now: Could assume the position immediately or within approximately 90 days
• Ready soon: Could become ready within one year
• Developing: May be ready within two to three years
• Emerging talent: Shows potential but needs broader experience

Successor pools can also be more useful than matching one employee to one position.

For example, a pool of developing nurse leaders may eventually support several departments.

6. Create Individual Development Plans

Identifying successors does not prepare them for the role. Development is the work that makes succession planning useful.

Each candidate should have an individual development plan tied to specific competency gaps.

Development activities may include:

• Mentoring or coaching
• Interim leadership assignments
• Cross-functional projects
• Committee leadership
• Job shadowing
• Formal coursework

Healthcare leadership cannot be learned entirely through courses. Potential successors need opportunities to apply new skills in realistic situations.

For example, an aspiring nurse manager could lead a staffing improvement initiative. A future compliance leader could present to the compliance committee.

Every development plan should include clear actions and review dates. It should also identify who is responsible for supporting the employee’s progress.

7. Establish Emergency Coverage Plans

Long-term succession planning and emergency continuity planning are related. However, they are not the same.

An employee who could become a permanent successor in two years may not be able to take over tomorrow.

Each critical role should have a documented interim coverage plan.

The plan may specify:

• Who assumes immediate responsibility
• Which decisions the interim leader can make
• Required system access
• Important reporting deadlines
• Key internal and external contacts

Emergency planning is particularly important for roles tied to patient safety and compliance. Nursing operations may also require immediate coverage.

8. Review Succession Plans Throughout the Year

A succession plan should not be created once and stored in a spreadsheet.

Employee performance changes. Career interests shift. Strategic priorities also evolve.

Healthcare organizations should review high-risk roles at least quarterly. Successor development should be reviewed at the same time.

Regular reviews should address:

• Changes in vacancy risk
• Successor readiness
• Development progress
• Retention concerns
• Interim coverage gaps

Succession planning works best when it becomes part of the organization’s operating rhythm.

Common Succession Planning Mistakes

Even well-intentioned programs can become ineffective when the process is not connected to development and accountability.

Treating Succession Planning as an HR-Only Exercise

HR can coordinate the process and support talent discussions.

However, senior leaders must own the quality of the succession pipeline.

Managers should be accountable for developing employees who can take on larger roles. This should remain true even when those employees eventually move to another department.

Focusing Only on Executives

Executive succession is important. However, healthcare organizations often have greater near-term exposure at the department level.

A nurse manager vacancy can immediately affect staffing and engagement. It may also affect care delivery.

Succession planning should cover critical roles throughout the organization.

Maintaining a List Without Building a Bench

A succession list has little value when the employees on it receive no additional preparation.

Organizations should develop multiple employees whenever possible. Every successor designation should lead to specific development actions.

Progress should then be reviewed regularly.

Overlooking Employee Trust and Retention

Some succession information must remain confidential. However, complete secrecy can create confusion and distrust.

Employees should understand how leadership competencies are defined. They should also know how development opportunities are assigned.

Organizations should also avoid overloading high-potential employees. Adding development assignments without adjusting existing responsibilities can increase burnout and turnover risk.

How to Measure Succession Planning

Organizations should measure whether their succession program is improving readiness. It is not enough to confirm that a plan exists.

Useful succession planning metrics include:

Organizations do not need to track every metric immediately.

Begin with coverage and readiness. Development progress and internal fill rates can also provide a useful starting point.

How Technology Supports Succession Planning

Succession planning is a leadership process. It is not simply a software feature.

However, technology can make the process more consistent. It can also make succession plans easier to maintain.

Healthcare organizations may use:

• Human resource information systems for employee data
• Performance management software for reviews and goals
• Learning management systems for training records
• Talent management systems for formal succession plans

Large HCM platforms may include dedicated succession planning modules. Other organizations may combine an existing HRIS with a focused performance management platform.

PerformYard, for example, can help organizations centralize performance reviews and development goals. It can also help them collect feedback and document employee check-ins.

A healthcare organization could use PerformYard to:

• Evaluate employees against leadership competencies
• Document career interests and development needs
• Create goals for potential successors
• Track progress during check-ins

PerformYard is not intended to replace every part of a full HCM suite. Its role is to strengthen the performance and development information used in succession decisions.

The right technology approach depends on the organization’s size and existing systems. Program maturity should also shape the decision.

Questions to Include in Succession-Focused Performance Reviews

Healthcare organizations can connect performance management with succession planning by adding targeted questions to reviews and career conversations.

Questions may include:

• Which responsibilities is this employee prepared to take on next?
• What evidence suggests the employee can manage greater complexity?
• Which leadership competencies are strongest?
• Which competencies require further development?
• What role is the employee interested in pursuing?
• What development action should be completed next?

These questions help separate succession planning from informal opinions. They also connect decisions to observable evidence.

Start With the Roles That Create the Most Risk

Healthcare organizations do not need a sophisticated enterprise-wide program before they begin succession planning.

Start by identifying a small number of critical roles. Define what future success looks like in each position.

Next, evaluate the strength of the internal pipeline. Assign concrete development activities to employees who may be able to assume greater responsibility.

Then review the plan regularly.

The value of succession planning does not come from creating a list of names. It comes from building a workforce that is better prepared to lead when responsibilities change.

In healthcare, that preparation supports more than organizational stability. It helps preserve the leadership continuity needed to maintain essential operations and deliver consistent patient care.