KEY CONCEPT

Organizations are struggling with how to effectively identify, attract and retain high-potential talent. This Idea — based on a Leadership Survey carried out by UNC Kenan-Flagler Business School — proposes employing a formal and systematic approach, and outlines four steps to putting such an approach into practice. 

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IDEA SUMMARY

"47 per cent say their current high-potential talent pool does not meet their anticipated needs."

The term ‘high-potential’ is often found in business literature referring to employees.  What exactly differentiates one from other employees? According to this Idea, high-potential employees are those identified as having the latent talent, ability and aspiration necessary to hold successive leadership positions in an organization. In a 2011 AMA Enterprise survey, high-potential employees were estimated to constitute the top 3-5 per cent of a company’s talent.

However, a recent leadership survey conducted by UNC Kenan-Flagler Business School found that while talent management professionals report a high demand for high-potential talent, 47 per cent say their current high-potential talent pool does not meet their anticipated needs.

Based on the survey, a White Paper produced by the school outlines steps that HR and talent management professionals can take to establish an effective high-potential talent identification program. Examples are also provided of firms that have done so successfully, such as IBM where high-potential employees can participate in the company’s Corporate Service Corps — a three-month program where employees are sent to an IBM location to provide pro bono counsel. GE’s high-potential program involves employee-rotation, and is designed to help employees understand the business from different functional and geographical perspectives. The program takes place over two years.

But should high-potential employees be informed that they are considered as such? 

Traditionally, executives have erred on the side of caution and kept high-potential lists under wraps, in the hopes of avoiding inflated egos and increased expectations of promotions and salary increases, as well as the fear of employee-poaching by competitors. This may be changing as 58 per cent of respondents to the Leadership Survey said they do tell employees they have been identified as having high potential. The benefits of such transparency include delivering a powerful signal that the organization values their contributions, and believes in them enough to invest in their future. 

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BUSINESS APPLICATION

Identifying and attracting high-potential employees can give organizations an edge on their competition, and set them up for future success. To do so, a formal and systematic approach (as outlined below) should be used, which will not only improve high-potential selection but also increase the perception of fairness and impartiality within the organization, and reduce employee turnover.

1. Plan for the future: understand what the organization will need in the near future, and identify anticipated leadership roles and positions.
2. Define high-potential criteria:  review relevant research, defining terminology such as ‘potential’, ‘performance’, ‘readiness’, and ‘fit’ (to ensure a consistent understanding at all organizational levels).  Also specify high-potential criteria and attributes for the organization as a whole, and for specific roles and positions in particular.
3. Make the high-potential criteria measureable: utilize different assessment procedures when identifying high-potential employees, such as the ‘decision-makers consensus approach’, in which decision-makers in an organization meet to discuss an employee’s suitability for promotion. Even more sophisticated is the ‘criteria-based approach’ in which criteria has already been established that articulates what the organization is looking for in a high-potential employee.
4. Identify high-potential candidates: once the high-potential criteria is defined and made measureable, candidates can be identified and nominated/selected using structured talent reviews, and be screened and assessed based on the criteria and their performance.

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REFERENCES

Identifying High-Potential Talent in the Workplace, “Kelly, Kip”, UNC Kenan-Flagler Business School White Paper (2013).

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