The cornerstone to an organization’s growth-from-within strategy is the identification of high-potential talent, yet HR and talent management professionals consistently report that existing processes and programs are lacking or nonexistent. A recent leadership survey conducted by the University of North Carolina Kenan-Flagler Business School, for example, found that while many talent management professionals reported a high demand for high-potential talent, nearly half (47 percent) said their current high-potential talent pool did not meet their anticipated needs, and 65 percent said they were only slightly or moderately confident in their organization’s ability to fill mission-critical roles.
High-potential employees have been identified as having the potential, ability, and aspiration to hold successive leadership positions in an organization. Once identified, they are often singled out for focused developmental opportunities designed to prepare them for future leadership positions. High-potential employees constitute the top 3-5 percent of a company’s talent.
There are good reasons to identify and develop high-potential employees. Key drivers to do so, according to respondents of the UNC Kenan-Flagler Leadership Survey, include the need to prepare the organization to meet the anticipated increased demand for future leaders (83 percent); to retain key talent (83 percent); and to improve organizational performance (73 percent). Developing high-potential employees also makes it more likely that they will stick around and benefit the organization rather than take their talent to a competitor.
Identifying high-potential employees is an important step in any succession management or leadership development plan, yet only 9 percent of HR and talent management professionals responding to an AMA Enterprise survey said they had a systematic process in place to identify high-potential employees. The vast majority (86 percent) said that they had a “mostly informal” or “combination of systematic and formal” process to identify high-potential employees.
Properly identifying high-potential employees can reduce high-potential drop-out rates and the associated wasted resources and expenses. Proper high-potential identification can also improve and target developmental plans for these individuals, resulting in more satisfied high-potential employees who are more likely to stay with the organization. Other benefits related to accurate high-potential identification include:
- Better bench strength for key positions
- Smoother transitions and shorter learning curves
- Reduced risk of “career derailment”
- More agility in key talent pools
- Consistently high performance from a steady supply of superior talent
HR and talent management professionals can develop a systematic, criteria-based approach to identify high-potential employees by incorporating the following steps in their own high-potential programs.
Step 1: Plan for future leadership and staffing needs.
Step 2: Define high-potential criteria.
Step 3: Make high-potential criteria measureable.
Step 4: Systematically identify high-potential candidates.
Properly identifying high-potential employees using a formal, systematic approach can improve high-potential selection, increase the perception of fairness and impartiality within an organization, and reduce high-potential drop-out rates and turnover. It can also increase an organization’s bench strength, giving employers an edge over their competition.