A recent report by Deloitte titled Global Human Capital Trends found that of 7000 executives surveyed, 92 percent believed that focus on leadership was a critical success factor. Furthermore, 56 percent stated that their companies were not ready to meet the leadership challenges presented by today’s market economy.
Most organizations expect that more than 40% of today's leadership roles today will look dramatically different five years from now. As a result, organizations are investing heavily in High-Potential (HiPo) employee programs, with 65% of companies moving away from other talent investments to fund these programs. Regardless of these efforts, a 2019 HiPo Development Benchmarking report by Gartner shows only one-quarter of HR leaders see their high-potential employee strategy as successful.
The implications of HiPos are significant. Training professionals need to stretch beyond their programs' developmental and educational goals to consider the broader impact of HiPo programs. It’s no longer simply about increasing the skills and capacity of coveted talent but also the following.
To raise the bar and create an amplified experience, training professionals need to understand what to expect from high potentials. A new study by expertsshows that 70 percent of managers currently have at least one employee, classified as someone with "high-potential" (HiPo), who they consider letting go because their performance is unacceptable. The study of more than 1,000 managers and employees also revealed that, even if they're not considering downsizing their team, 88 percent of managers have at least one HiPo direct report who doesn't live up to theirHiPo title. Peers were even more discerning, with 96 percent saying they have at least one HiPo teammate who regularly fails to meet performance standards.
While many qualities setHiPos apart from their peers, managers attribute their gap in performance to just a handful of factors. The top three reasons managers attribute to their HiPos falling short include:
While many qualities setHiPos apart from their peers, managers attribute their gap in performance to just a handful of factors. The top three reasons managers attribute to their HiPos falling short include:
Both managers and employees said this performance gap comes with significant costs. Nearly half of managers (48 percent) said this gap costs the organization more than $25,000 per low-performing HiPo. They also identified negative impacts to other key metrics, with quality and customer relations being most affected.
Poorly created HiPo programs with unclear goals and processes can lead to dissatisfaction for the organization and the HiPo. This highlights the necessity of focusing on fundamentals and continuous testing and polishing of programs to retain and develop HiPos.
It is essential to design the HiPo employee selection process as a critical talent intervention. Employees who are formally identified as such tend to consider themselves high potentials more than those who are informally identified (Survey, Center for Creative Leadership Survey). The HiPo selection process must be transparent and well communicated and clearly state the competencies being assessed, in line with the talent culture. Change readiness, decision making, communication, team leadership, etc., are fewcritical competencies to assess employees for future leadership roles. Also, be willing to consider employees who have failed in the past. Often they are the ones with significant risk-taking capabilities - A key leadership competency
It’s now well established that investments into HiPos deliver at least 3x ROI. Organizations that take a one-size-fits-all approach do not enjoy this return on investment. From identification to development, organizations should take a personalized approach to HiPos. Contextualizing the HiPo program to focus on skills aligned with the overall organizational goals while simultaneously considering the career path of the particular HiPo employee and customizing the programs based on the same is critical.
A good Hi-Po process provides the right stepping-stone to cultivate great leaders within the system by creating the right opportunities. Design a formalized approach to elicit the desired outcomes at every stage including,
1. HiPo identification
2. HiPo development and engagement
3. HiPo retention.
An ideal process should walk the fine line between employee differentiation and inclusion. Assign greater responsibility to identified HiPos by designing special projects that align with the organizational direction. For example, a company planning multi-geographical growth can assign HiPos growth assignments in new markets. Action-learning to help HiPo employees gain real-time insights from on-the-role challenging assignments. Cross-functional projects are a great way to build future leaders who think the big picture. Formalize the HiPo milestones such as leadership interactions, performance on assignments, and ongoing feedback sessions to ensure process
Rather than event-based learning, continuous learning journeys spread over the career path of HiPos enable sustained development. Also, given that HiPos are self-driven, having learner-centric modules that are not instruction-based but recommendation-based in nature is critical. If HiPos can choose specific competencies they want to develop from recommendations based on their goals, role, and context, the impact of the learning journey is higher. Also, since HiPos usually fall short of time due to multiple responsibilities, it is vital to have bite-sized learning modules that can be consumed at their convenience through a device of their choice. If these modules can be experimental with elements of simulation of real-life scenarios, the learning is faster, and insights are imbibed stronger.Having a learning partner with experience in designing customised digitised HiPo Programs can improve the effectiveness & probability of success of the HiPo program’s success.
MostHiPos are already committed to their organizations (95%, CLC survey) and motivated by their jobs (96%, CLC survey). However, employees who know they are HiPos expect a higher degree of connect with their employers. Differential rewards to reinforce HiPo behavior and unlimited learning opportunities, in line with professional aspirations, irrespective of additional costs incurred, help improve the relationship between HiPos and their employers and organization. A clear career path with SMART milestones outlined can reinforce the loyalty and commitment of a HiPo to the organization and motivate high performance.
A successful Hi-Po program essentially aims at aligning the multidimensional elements, i.e., the abilities, aspirations, and engagement levels of employees, to suit the company’s needs. However, these elements are constantly changing in a dynamic BFSI market with diverse talent pools entering the workforce. The Hi-Po program of today must thus be agile and responsive, changes with the demands of a dynamic HR strategy within the financial services industry. Though HR is the custodian of Hi-Po leadership development programs, HR leaders must actively engage with functional business stakeholders to make Hi-Po an authentic and effective process. Talent interventions must ultimately match the strategic agenda of each function, converging up to the pan-organizational strategic needs.
The Financial Impact of Strategic Development and High Potential Programs. Journal of Organizational Psychology, 16(2). Retrieved from https://articlegateway.com/index.php/JOP/article/view/1794.
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‘High potential’ programs: Let’s hear it for ‘B’ players. Human Resource Management Review, 24 (4), 330-346. https://dx.doi.org/10.1016/j.hrmr.2014.06.00
Saks, A.M. & Gruman, J.A. (2014).
‘What do we really know about employee engagement? Human Resource Development Quarterly. 25 (2), 155-182.
The Relationship between Perceived Talent Management Practices, Perceived Organizational Support (POS), Perceived Supervisor Support (PSS), and Intention to Quit amongst Generation Y Employees in the Recruitment Sector, University Of Pretoria.
Schmidt, F. L, & Hunter, J. (1998).
The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124(2), 262-274.
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