In today’s competitive job market, identifying and retaining high potential employees (HPEs) has become a major challenge for businesses. And the reason for this is quite obvious. HPEs bring the right strengths to the team and can nail the performance targets, easily overcoming obstacles that may come their way.
However, identifying high potential employees is not always easy, and organizations often struggle with biased assessments and subjective opinions. Sounds familiar? If so, you’re in luck because in this article, we will explore the best practices and methods for spotting high potential employees, as well as challenges and pitfalls organizations may encounter.
With this information at hand, you’ll be able to improve your company’s performance, retain top talent, and get the upper hand over the peers in the marketplace.
What Are High Potential Employees?
Before we go any further, let’s first answer the main question of what high potentials are so you know exactly who to look for when identifying next-gen leaders. Generally speaking, HPEs are any individuals who possess the ability and potential to make significant contributions to the organization’s success.
These people typically demonstrate:
- Exceptional performance;
- Leadership potential;
- Adaptability;
- Strong work ethic;
- Willingness to learn.
More often than not, they are identified early in their careers and are selected for special training to prepare them for leadership positions in the future.
High-potential employees are critical to the success of organizations. According to surveys, they bring 91% more value to a company than employees who don’t have these qualities.
The problem is, a lot of companies mix up high-potential workers with high-performance ones. While these two definitions sound very similar, they are not the same, and understanding the difference between them is important.
High-Potential Vs. High-Performance Employees
It’s worth noting that high potentials and high-performance employees are both valuable assets that an organization can have, but they do have distinct differences in their potential for growth. Let’s look at it more closely.
High-performance employees are those who consistently exceed expectations and achieve set goals. They are reliable and productive, and they are often recognized for their efforts put into the organization’s growth. More often than not, they succeed in their current roles and have a strong track of success.
The flip side of the coin is that they mostly focus on maintaining their current level of performance rather than seeking out new challenges or opportunities for growth, making it difficult for them to adapt to changes in the workplace.
When it comes to high-potential employees, as the name suggests, these people have the potential to “step outside the box”. Unlike high performers, they have the skills, attributes, and motivation to undertake new challenges and transition into leadership positions within the organization.
More importantly, they demonstrate high learning agility and willingness to take risks, which sets them apart from the rest of the team and makes them good players in the long run.
Identifying High Potential Employees
Identifying high-potential employees in your organization can be beneficial in several ways, starting from increasing overall productivity to ensuring the long-term success of the organization. Other important benefits include:
- Building a pipeline of next-gen leaders. By identifying high-potential employees early, companies can develop them to take on more significant roles in the future;
- Increased retention rates and engagement. When people feel that their potential is recognized and valued, they are more likely to be committed to the company;
- Improved succession planning. With the right people on board, it’s easy to fill leadership roles and transit smoothly when leaders retire;
- Motivation boost. High-potential employees can boost the level of motivation of the entire team by sharing their ideas and perspectives with them;
- Improved training. It is also much easier to tailor training and development programs based on the needs of employees who show potential for professional growth.
5 Methods for Identifying High Potentials
Now that we’ve covered what high-potential employees are and what they mean in terms of the organization’s success, it’s time to finally dive into the details and see how to spot top talent among your employees.
Further down, we’ll take a look at the most popular methods used for identifying high-potential employees. Sure, they aren’t a one-fit-all-size solution, but with a custom approach, you can make them work for the specific needs of your organization.
1. Appraisals
High-potential employees aren’t always top performers, which is something to bear in mind. However, they may show signs of potential, such as an ability to learn quickly, a positive attitude toward feedback, and willingness to take on new challenges.
Therefore, it’s essential to conduct performance reviews (known as appraisals), on a regular basis. They can help identify these characteristics and indicate who has the potential to develop beyond their current role.
2. Assessment Tests
Along with performance reviews, it’s recommended to run assessment tests from time to time. What’s great about assessment tests is that they can help quickly identify specific skills that high-potential employees need, such as learning agility, initiative, and leadership potential, and provide objective data to chart their career opportunities.
3. Manager Recommendations
Another method is to directly seek recommendations from managers who work closely with employees. As they work together, they will be the first to notice characteristics such as ambition, creativity, or leadership skills that indicate a potential for growth.
Not only that, but they may also recommend opportunities for professional development that can help these employees reach their full potential.
4. Talent Calibration Sessions
These sessions are usually held with top managers or executives and HR to discuss the potential of each employee. Based on the review of potential data and performance of employees, they can quickly spot those who could benefit from development opportunities.
Another advantage of running talent calibration sessions is that it eliminates any bias in employee assessments and ensures that HPEs are recognized fairly.
5. Employee Self-Nominations
Employees who are looking to advance their careers may want to self-nominate for development programs, which is the easiest way to identify their potential and motivation. By encouraging self-nominations, managers can clearly see proactive employees who demonstrate willingness to take initiative and invest in their development.
Challenges in Spotting High Potential Employees
While the methods described above should make it easier for you to spot high-potential employees on your team, there are some challenges, too. Let’s quickly go through the biggest ones so you can recognize them and deal with them properly.
Defining High Potential Employees
One of the biggest challenges in identifying high-potential employees is actually defining what “high-potential” means. This is because the criteria for determining high potential can vary greatly depending on the industry, job, and other factors.
For this reason, organizations should have a clear and consistent definition of what high potential means for them and stick to it.
Limited Visibility
Another challenge is the limited visibility that organizations may have into their employees’ potential. Quite often, this happens when the team is given a lot of autonomy, which makes it difficult for managers to understand the full range of a worker’s skills, knowledge, and abilities.
Unpredictability
The unpredictability of performance is another thing that may get in the way when trying to identify high-potential employees. An employee may have performed well in the past, but this doesn’t necessarily mean that they will keep on like that in the future. And vice versa. Some people who’ve not performed well in the past may have the potential to excel in the future.
Bias
Biases are arguably one of the biggest challenges that organizations face. It’s not uncommon for managers and supervisors to unconsciously assess an employee’s potential based on their own backgrounds and experiences, but the assessment must be impartial.
Limited Resources
Finally, organizations may face challenges in spotting high-potential employees due to limited resources. Creating development programs, conducting talent calibration sessions, and evaluating employees’ skills all require time, effort, and resources that may not always be available.
This is why it’s essential that managers prioritize their efforts and focus on those employees who are the most critical to the company’s success.
Developing High-Potential Employees
It’s not enough just to spot high potentials, of course. For organizations looking for sustainable growth and success, it’s essential to develop these employees so that they can succeed in their current roles and take on greater responsibilities in the future.
Besides, investing in the development of high-potential employees offers a number of additional benefits, such as increased employee engagement, retention, and productivity, improved succession planning, and better leadership pipelines. So, not only employees but also organizations themselves benefit from the investment.
Here’s a short list of strategies for developing high-potential employees that you can use as a starting point:
- Create a development plan;
- Provide training and development opportunities;
- Offer challenging assessments;
- Provide feedback and coaching;
- Recognize and reward progress;
- Monitor progress and adjust the development plan.
Conclusion
To bring it to an end, HPEs are a valuable asset to any business. Not only are they more productive, but they also help motivate the entire team and bring the right strengths for the company’s growth.
Therefore, spotting high potentials is a critical task for any organization. Hopefully, with the tips and strategies we’ve covered in the article, it will be easier to spot valuable talent and develop a talent management strategy for a sustainable company growth.
