How To Identify And Retain High-Potential Employees

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)?

“You can’t just wait around for high-potential talent to uncover itself,” says Cay Wittenberg, a leadership and management consultant at Success Labs. “You have to identify those agile employees and put them in the field to demonstrate their abilities. The workforce is changing, so you have to be proactive with high-potential employees.”

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 organizations tend to have the most trouble.

Understand Potential vs. Performance

That trouble often arises due to a misunderstanding of the term “HiPo.” Employers frequently 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 into 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 she’ll be able to effectively 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.

“You’re looking for the difference between an employee who just knows how to do the job versus an invested employee looking to stretch and grow as much as possible within the organization,” Wittenberg says. “These are employees that are not just satisfied with the company but are also engaged — taking action, finding and utilizing opportunities and taking risks that would increase their value to the organization.”

Wittenberg points to four key types of agility that HiPos share and that frequently serve as indicators of future leadership success:

  • People Agility is the ability to mesh and connect across an increasingly diverse workforce.
  • Results Agility is the capacity to perceive intended results in a holistic and high-capacity manner.
  • Learning and Mental Agility is mental flexibility and investment in organizational change.
  • Change Agility is a positive attitude and excitement when faced with change.

These different agilities demonstrate a HiPo candidate’s engagement and investment in their work, and their commitment to doing more than the bare minimum for their organization.

Support Your HiPos

Because high-potential employees ambitiously chase after new challenges, it’s critical to invest in them and provide support to help ensure you retain them. HiPos represent a company’s strongest leadership pipeline. An investment in their success is an investment in your company’s future.

“You have to give those HiPo employees a challenge and a chance to prove themselves,” Wittenberg says. “For example, try assigning them to cross-functional teams focusing on tactical or organizational issues. Find what the company values and put together a task force to have employees keep other employees accountable to it through innovative programs.”

Most of all, Wittenberg says, maintain communication. HiPo employees want to move forward in their careers. Keep in touch to offer feedback and give them opportunities for leadership.

Offer HiPos a Clear Career Path

Once you’ve identified your HiPo employees, it’s critical to keep them invested and engaged. They need to know that they have opportunities with you; without that they’re not likely to stick around.

“Young talent is looking for career paths, for some clear direction on how they can keep adding value to a company, rather than just coming in and punching the clock each day,” Wittenberg says. “With so many opportunities in 2019, employees are not waiting around — just like senior leaders shouldn’t be waiting around for HiPo candidates to come to them. These employees are looking to get that confirmation and validation that people want to invest in them.”

Wittenberg suggests active succession planning. When you have HiPo candidates, you want to give them the chance to make a difference at your organization. “You don’t want to just provide opportunities that are not really adding impact anywhere,” she says. “You want to provide opportunities that are going to keep adding value to the organization.” This gives your HiPos purpose and keeps your best players engaged — which ultimately moves your company forward.

Invest in the Next Generation of Leaders

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

“Younger generations want to be invested in meaningful work — they tend to look for experiences over monetary value,” Wittenberg notes.

Organizations can mine their younger talent for HiPo candidates that offer not only longevity, but also investment. If you can offer millennial — and younger — employees purposeful work and a chance to make a difference, then you’ve already taken a huge step towards retaining HiPo talent and investing in your company’s future.

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.

This article was originally published in 2017 and was updated in August 2019.


How to Nurture Your High-Potential Employees

With 6 million job openings and about half of U.S. employees contemplating a job change, the hiring market seems straightforward. But before launching a broad search for candidates, take an objective look to evaluate how well your company leverages its internal talent pool.

Promoting from within has obvious advantages. For one thing, internal candidates know the organization and have a proven performance record. This means they can hit the ground running because of their familiarity with the company culture and the relationships they’ve built.

Filling a job with a high-potential internal candidate is also typically faster and more cost-effective. Beyond the efficiencies related to onboarding and training, there’s an overall cost consideration. A study by the University of Pennsylvania’s Wharton School says external hires in the investment banking industry earned up to 20 percent more than employees who were promoted to a comparable position. However, the performance of the promoted candidates significantly outpaced that of external hires in their first 24 months on the job.

Even though this is widely accepted as a best practice, it’s harder to implement on the ground. The reality is that many companies put more emphasis on managing attrition than on improving retention. As a consequence, your ambitious high-potential employees may look elsewhere for their next challenge. In fact, research by the Corporate Executive Board found that 1 in 4 high-potential employees plan to leave their company within a year. By actively cultivating these valuable employees and accelerating their development, you will enhance employee motivation and engagement.

A Culture of Cultivation

Creating a high-potential talent pool is not a one-and-done event. Rather, it’s an ongoing endeavor that requires a strong partnership between executives and HR. A successful high-potential program operates both cyclically and periodically as an integrated part of company culture, with internal mobility, mentorship and development at its core.

If your company already has an established program, build in regular opportunities to revisit and refresh the high-potential employee success profile. Organizational goals evolve quickly in a dynamic marketplace, and high-potential talent profiles must stay current to remain valuable.

When mobility is woven into the culture, companies establish clear paths for employees and recruiters alike. Along with strategic identification and development of high-potential employees, some organizations go a step further to discover capabilities and build crossover skills. Other companies offer programs to help employees broaden their experience through job rotations across different departments.

5 Steps to Build Your Program

Establishing a culture of hiring from within requires a strategic commitment to nurture your high-potential employees. These five considerations will help you successfully cultivate your talent pipeline.

Develop a Forward-Looking Profile

Before you develop assessments to identify high-potential employees, step back and refine your definitions. What are the critical roles within the company today? How will those roles change in the years ahead? What skills and capabilities will be required? The answers to these questions set the foundation for developing a profile of the capabilities required for future success.

Build on this profile by looking beyond your company’s current needs. What you need are employees who will meet and exceed the skills the company needs in the future through a combination of leadership development programs, focused mentoring and coaching, and stretch assignments.

Establish Meaningful Metrics

Once you have a profile of the necessary capabilities, build an assessment process to objectively evaluate and identify talent. Consider assessing drive, people skills and abilities. Your profile will serve as the guide on what to measure. Just be certain to do it in an objective, reliable and contextually relevant manner that reflects the organization’s needs. Most importantly, keep it data-driven by utilizing analytic tools to minimize bias and document your findings for later use.

Narrow the Field

It’s easy to get excited and identify as many high-potential employees as you can, but trying to cultivate too many employees at once is a mistake. Instead of casting the widest net possible, use a two-level screening process to home in on a small, critical group of employees who are truly differentiated from the rest.

While the exact number will vary by the organization’s needs, aim for 2 to 10 percent of employees. In many cases a smaller number makes sense. This way, talent leaders, mentors and sponsors will have more time and energy to spend accelerating the development of the best of the best.

Map a Leadership Development Journey

Nurturing high-potential employees starts with identifying individual needs and potential sponsors. Align each person with a sponsor who can help her navigate the organization and challenge her along her developmental journey. In effect, the sponsor becomes a champion for the individual, ensuring the person is part of the right projects, builds relationships with a range of people and takes on stretch assignments. Secondly, identify developmental needs and goals for each high-potential employee and support each of them in building his or her own development plan. The plan most likely will include very individualized experiences as well as more systemic or cohort-based opportunities.

The primary objective of customized leadership development journeys is to prepare employees to take on their next roles. But no two people’s experiences and career paths are the same. Recognize this by getting creative when it comes to development. Help employees take full advantage of training options, and identify lateral or atypical skill-building career moves.

Take a Cyclical Approach

The essential element for establishing a successful high-potential employee program is ongoing attention, not annual reviews. Build in multiple checkpoints throughout the year to track both employee and program progress. In addition, keep refreshing the high-potential pool by repeating the screening and evaluation process regularly.

When you nurture high-potential employees in these ways, the company gains more than just a valuable resource for filling open positions. You’re also giving your best and brightest employees a chance to see their futures with you.