Succession Candidate Retention Rate is the percentage of employees identified as succession candidates who remain with the organization over a specified period. It measures how effectively a company retains high-potential employees designated for leadership or critical roles.

Succession planning is a key strategy for ensuring business continuity and long-term success. Organizations identify employees with leadership potential and prepare them for future key positions. However, retaining these candidates is a challenge, as they are often highly skilled and in demand by competitors.

The Succession Candidate Retention Rate assesses how well an organization keeps its future leaders engaged and committed. A low retention rate indicates risks such as talent loss, disrupted succession plans, and increased hiring costs. Conversely, a high retention rate suggests effective leadership development programs, strong engagement strategies, and a positive workplace culture.

To calculate the Succession Candidate Retention Rate, use the following formula:

For example, if a company starts the year with 20 identified succession candidates and 17 of them remain at the end of the year, the retention rate would be:

A high retention rate suggests that succession candidates see growth opportunities and value within the organization, while a low rate may indicate dissatisfaction, lack of career progression, or external competitive offers.

Why It Matters

1. Ensures Leadership Continuity
   Retaining succession candidates helps maintain leadership stability and reduces disruptions when transitions occur.

2. Reduces Hiring Costs
   Losing high-potential employees means investing in external recruitment, which can be costly and time-consuming.

3. Enhances Employee Engagement
   A strong succession plan fosters engagement, as employees feel valued and see a clear path for career progression.

4. Improves Organizational Stability
   When key positions are filled by internal talent, organizations can ensure smoother transitions and maintain operational efficiency.

5. Strengthens Employer Brand
   Companies known for effective leadership development attract and retain top talent, enhancing their reputation in the industry.

FAQ

How can companies improve the Succession Candidate Retention Rate?

Organizations can enhance retention by offering career development programs, competitive compensation, mentorship opportunities, and a clear progression path for identified candidates.

What is a good Succession Candidate Retention Rate?

While this varies by industry, a retention rate above 80% is generally considered strong. Anything below 70% may indicate issues with engagement or career growth opportunities.

What factors contribute to a low retention rate?

Key reasons include lack of promotion opportunities, inadequate leadership training, poor workplace culture, and competitive external job offers.

How often should organizations measure this metric?

Companies should track this rate annually or semi-annually to identify trends and take proactive measures.

Does a high retention rate always mean a successful succession plan?

Not necessarily. While retention is important, organizations should also assess whether succession candidates are truly prepared for leadership roles and contributing effectively.