Every manager can think of at least a handful of employees who stand out from the crowd, distinguishing themselves by their efficiency and value to the team. These stars are usually at the top of the list when it comes time for promotions and bonuses – but how can you be sure that you properly identify High-Potential Employees (HiPos)?

It’s in the best interest of companies to support and develop the HiPos within their ranks to ensure they remain engaged. The first step in creating an effective HiPo program is to accurately identify your HiPos; unfortunately, this is where most companies tend to have the most trouble.

Potential vs. Performance

That trouble often arises due to a misunderstanding of the term “HiPo.” All too frequently, employers confuse potential with performance – and these are far from being the same thing. As Tomas Chamorro-Premuzic writes in Forbes, “performance is what you do, and potential is what you could do.”

As individuals rise through the ranks from contributors to managerial roles, the skills and capabilities that ensure their success in a given role will change. Just because a developer writes efficient and bug-free code doesn’t mean that she will be able to effectively manage and oversee others in that same role. Judging an employee’s readiness for a managerial role based solely on their performance in their current position has the unfortunate result of removing employees from positions in which they perform well and placing them in leadership roles for which they are unqualified.

For this reason, focusing on potential – in addition to performance – is especially critical. An effective HiPo program must identify essential leadership skills in employees who may not yet have actual leadership responsibilities. Fortunately, CEB points to three key characteristics that HiPos share and that frequently serve as indicators of future leadership success: aspiration, ability, and engagement.

Aspiration

Aspiration refers to an employee’s willingness and desire to tackle the challenges and opportunities associated with leadership roles. HiPos may demonstrate an interest in being involved in decision-making processes, and they often yearn for more responsibility and independence. They proactively seek out new challenges and solicit constructive feedback regarding their performance.

Ability

Ability refers to the combination of an employee’s inherent qualities and their learned skills. HiPos don’t just do their jobs well – they are also fast learners who leverage their existing strengths to help them acquire new skills quickly. They welcome professional development opportunities and recognize the value in augmenting their talents with new knowledge and best practices.

Engagement

HiPos are exceptionally engaged employees, demonstrating a significant commitment to the success of the company that extends beyond their own individual performance. They often exemplify many of the qualities that are most valued within the company culture and can be seen lending a hand to other employees as necessary in order to bolster the overall efficiency and success of the team.

Investing in HiPos

Because HiPos ambitiously chase after new challenges, it’s critical to invest in them and support them if you have any hope of retaining them. It’s no exaggeration to suggest that a strong HiPo program represents a life-or-death situation for companies: According to CEB, 25% of HiPos are planning to leave their company within the next year, and the remaining three quarters are 10% more likely to leave than other employees. HiPos represent a company’s strongest leadership pipeline, and an investment in their success is an investment in your company’s future.

One of the easiest ways to support your HiPos is through positive reinforcement. Let them know that they are at the top of the heap and thank them for their continued commitment and performance. For true HiPos, this will give them a strong sense of job satisfaction while also spurring them to aspire to even greater heights.

Advancing Your HiPos’ Careers

As satisfying as it may be, a pat on the back isn’t enough on its own to keep a HiPo on the path to leadership. Their aspiration, ability, and engagement must be rewarded in meaningful, tangible ways. While this can and should take the form of appropriate compensation and benefits, opportunities for career advancement are equally important.

For small to mid-size companies who may lack robust HR departments, providing ample opportunities for professional development can be a challenge. Fortunately, independent executive coaching services are ideal for filling this role.

Experienced coaches can draw on their expertise and outside perspective to help internal HR managers identify and nurture HiPos. Coaching helps employees develop and refine skills that will allow them to effectively confront any future challenges – rather than only addressing immediate needs. For this reason, it is one of the most effective methods of professional development in terms of employee and employer satisfaction. Employees gain confidence in their abilities and remain engaged with their work, resulting in an ROI of nearly seven times the initial investment.

The next generation of leaders

Identifying and supporting HiPos has become an even more critical fact of effective management due in part to the increasing number of millennials in the workforce. Many of the qualities that distinguish HiPos can also be applied to millennials: they are eager to take on greater responsibility, and they have a strong desire to work in an environment where they feel supported and encouraged.

By some estimates, millennials are expected to make up as much as 75% of the workforce by 2025. With the right support, companies could potentially turn huge swaths of their employees into HiPos by encouraging some of these key characteristics demonstrated by Gen Y through professional development opportunities like executive coaching.

HiPos represent the future of any company, and the ways in which employers support them will determine how bright that future can be. By identifying and cultivating employees with exceptional aspiration, uncommon ability, and superior engagement, employers can ensure that the next generation of leaders is well equipped to boost performance, foster innovation, and drive sustainable growth.

Photo Credit: david_topolewski Flickr via Compfight cc

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