In today’s competitive talent marketplace, organizations are recognizing the importance of identifying and engaging high potential talent in their organization early on and developing a strong leadership pipeline.
At the same time, it is becoming increasingly challenging to retain high potential employees if they are not identified and developed appropriately, because these rising stars know they have options. So where do organizations start when trying to retain their future potential leaders? By identifying them.
We broadly define high potential employees as those who display the motivation, ability, and organizational commitment to rise to and succeed in senior positions in the organization. From an organizational point of view, it is important to correctly identify these individuals because there is a lot at stake: selecting the wrong individual means wasting precious time, energy, and financial resources investing in someone who will ultimately fall short of their expected potential. Even worse, a wrong choice means that another very talented employee may be ignored and will likely search for greener pastures where they’ll be afforded the autonomy and development opportunities they crave.
That being said, CEB has found that more than two-thirds of organizations focus their high potential development efforts on the wrong employees. In most cases, companies’ processes of identifying high potential talent are overly complex, highly subjective, too infrequent, and overly reliant on employee experience and seniority rather than aspiration and potential (i.e. identifying leaders earlier in their career).
So how do you really know who is “high potential” based on your day-to-day interactions with teammates? Based on our experience and research, we have found that high potential talent nearly always displays these key traits:
- Exhibits strategic insight. Above all else, high potential employees are constantly seeking out new experiences and knowledge — they are constantly looking for new experiences, asking for feedback, and adjusting behavior accordingly — and they have a unique ability to process and apply that new-found information to make an impact on their immediate team or the broader organization.
- Inspires others to high performance. High potential employees are very skilled at connecting with colleagues – both junior and senior. They implement that high emotional intelligence to motivate colleagues to be better tomorrow than they are today.
- Results driven, with broad concept mastery. Research has found that high potential employees work on average 20% harder than their peers and generate 3.5x times their annual salary for their businesses. However, while high potential employees have clearly mastered the technical skills that their job requires, they also show the ability to broaden that expertise and develop necessary soft skills as they grow into management roles.
- Team player. As corporations increasingly emphasize collaboration and teamwork, high potential employees stand out as people who play well with others and serve as a cornerstone of any team they work on. They put team results above their own, involve others as much as possible, respects other people’s work styles, and make their opinion known but can compromise their points of view in support for teammates.
- High ethical standards. Organizations have to trust in their leaders’ moral compasses. As Warren Buffet, Chairman and CEO of Berkshire Hathaway, said, “In looking for people to hire, look for three qualities: integrity, intelligence, and energy. And if they don’t have the first one, the other two will kill you.” High potential employees stand apart as people who staunchly uphold corporate values and carry themselves with the utmost integrity.
An equally important characteristic to note (but one that can be hard to identify before it’s too late) is that, as mentioned above, high potential talent can be hard to retain if not offered opportunities for development. A 2012 study by Harvard Business Review discovered that on average, high potential employees leave their organizations after 28 months. Most cite a lack of career development for their departure with expectations around mentoring and coaching most often unmatched.
What does this mean from an organizational perspective?
Keep it simple, data-based, agile, and timely. The most successful firms in the area of high potential identification are implementing technology to provide analytics that substantiate potential. For example, measuring employee engagement across various modes of learning and knowledge sharing. On top of this, these firms are deploying algorithms and relying on data in order to reduce the introduction of bias into the identification process. Relying on data allows these companies to check in on employee snapshots regularly, thus creating a more agile process. And last, but not least, they are defining potential as a combination of stated aspirations and commitment to the organization with hard skills and abilities in order to create a more balanced view that enables leaders to identify high potential employees earlier in their careers.
Take, for example, the Brazilian mining group Companhia Vale do Rio Doce, who took this kind of disciplined approach beginning in 2001. Not one senior role was filled without an objective, independent, professional assessment of all internal and external candidates. On the more junior level, managers were encouraged to seek out motivated, curious, insightful, engaging, and determined prospects even if they had no specific experience in the field or function to which they were applying.
Former CEO Roger Agnelli was quoted saying, “We would never choose someone who was not passionate and committed to our long-term strategy and demand objectives.” Within 5-6 years of implementing this approach, everyone appointed to senior roles in the firm came from within, and Vale had become a global player in the mining industry. It was also dramatically outperforming competitors in both its country and region.
Identifying high potential employees is by no means a straightforward process. But by working with the right partners and establishing a thoughtful process that abides by the four guiding principles above, your organization will be one step closer to retaining its invaluable high potential talent.
Learn more about identifying and retaining high potential talent by downloading our eBook, Talent Crisis: High Potential Attrition.