Regardless of the size of the organization, identifying high-potential employees (HiPos) should be on the radar of every manager.
Not only do HiPos have the potential to make a significant impact in their current roles, but they can also be prepared for future leadership positions within the company.
Research shows that HiPos are 91% more valuable to an organization than non-HiPos. But surprisingly, adding a HiPo to a team boosts other team members’ productivity and performance by up to 15%.
Sadly, not all leaders know what to look for when assessing talent, nor possess the skills to develop and retain these individuals. Too often, HiPos are not identified early enough and therefore are not given the proper attention and training they need to reach their full potential.
To make sure your organization is not losing out on top talent, we'll discuss the traits of high-potential employees and how to identify them.
What is a high-potential employee?
Consider these two revealing definitions of a high-potential employee:
“A high-potential employee (HiPo) is someone with the ability, engagement, and aspiration to rise to and succeed in more senior, critical positions.”
“A HiPo employee is a person who has been identified as possessing the ability and the potential to not merely be promoted, but to ultimately ascend to the most senior levels of the organization.”
These definitions highlight the importance of identifying what skills they possess and how they translate well to leadership.
They go beyond just being competent in their current roles and demonstrate a desire to learn and grow by taking up more challenging roles and responsibilities.
There’s another consideration to make, however, when finding HiPos, and that’s clarifying the difference between HiPos and high performers.
The crucial difference between high potentials and high performers
While certain traits come to mind when thinking about high-potential employees, they usually overlap with those of high performers.
Reliable, hard-working employees who excel in their current role and consistently deliver outstanding results can be both considered high potentials and high performers.
But just because someone is a high performer doesn’t necessarily mean they have the potential to take on bigger roles. Similarly, not every HiPo is a high performer.
HiPos possess certain attributes that make them stand out from their peers, which is only seen in 3 to 5% of high performers. HiPos also show potential for growth and development into leadership roles.
3 Reasons why you should identify your high-potential employees
High-potential employees will be the individuals pushing your organization forward. They’re indispensable. They’ll be the ones taking on important roles, leading projects, and offering innovative solutions that shape the company’s future.
But beyond that, HiPos can also be a great source of employee loyalty and motivation for your organization.
More than anything, HiPos are more likely to stay with your company for the long term. But only when they are recognized and given the opportunities to develop their skills.
In fact, 94% of employees who feel their organization is investing in them are likely to stay longer. These growth and development initiatives, such as high-potential programs for employees, can help your organization become a magnet for top talent.
2. Succession planning
While succession planning may not be the most exciting aspect of management, eyeing certain individuals for future leadership roles is essential for the long-term stability of any organization.
Not only does this give managers a greater sense of security knowing they have a strong bench, but it also allows HiPos to be groomed and prepared when your top talent leaves or retires.
3. Competitive advantage
More than 40% of leadership roles we know today will be different in the next five years.
Compared to other employees, HiPos are more likely to have a better understanding of the environment, the business, and customer needs.
With this, HiPos are more than just employees who show promise–they are future, dynamic leaders that can help your organization stay ahead of its competition.
A necessary tool: The High Potential Trait Indicator
In the past, organizations didn't have a standardized and analytical method for identifying HiPos. Rather, they relied on the instincts of management from observations and performance reviews.
While most organizations have a systematic approach to evaluating employees, a more holistic approach needs to be taken when it comes to identifying HiPos.
The High Potential Trait Indicator (HPTI), now known as the Thomas Personality assessment, is one such tool that was developed by Ian McRae and Adrian Furnham in 2006. It evaluates employee performance on seven criteria: Acceptance, Adjustment, Ambiguity, Competitiveness, Conscientiousness, Curiosity, and Risk Approach.
Based on the ‘optimality’ model, it assumes that an individual’s personality traits can be an indicator of their potential to become a high-performing employee and future leader.
5 Ways to recognize high-potential employees for your organization
Only one out of seven high performers are actually high-potential employees. Aside from the obvious, here are some qualities that distinguish high-potential employees:
- Takes initiative and suggests new ideas
- Willing to go out of their way to help others
- Pushes boundaries and challenges the status quo
- Embraces change and adapts quickly
- Takes feedback well and strives for improvement
- Seeks out new opportunities to learn, grow, and develop professionally
- Shows leadership potential by driving projects forward without being asked
Relying on your gut will be important, but there are concrete tasks you should complete when making the call on whether or not an employee has potential to ascend the ranks. Don’t put your reputation on the line to sponsor someone unless you go through these tasks.
1. Measure key performance indicators
Any good manager should use hard assessment data from performance reviews, surveys, and other feedback to measure the performance of every employee.
From the usual key performance indicators (KPIs) like sales figures and customer satisfaction to more specific ones like innovation, creativity, and risk-taking, keeping an eye on KPIs can help you recognize high-potential employees for your organization.
2. Are they skilled problem solvers or only very intelligent?
High-potential employees are usually both intelligent and good problem solvers. They don’t just come up with solutions to problems, but they also look for ways to improve processes and develop new strategies.
For example, while an intelligent employee can think of ways to solve a problem, a high-potential employee will find and implement strategies to prevent the same issue from recurring in the future.
3. Talk to them about their desire to take on leadership roles
High-potential employees don’t just want to do their job efficiently; they also have the ambition and drive to take on bigger roles.
When identifying HiPos, talk to them about their long-term career goals and see how they respond. These conversations can provide valuable insight into how much potential each employee has and the roles they might be best suited for in the future.
4. Do they have high emotional intelligence?
Possessing a high level of emotional intelligence is an important trait for HiPos.
As such, managers should assess each employee’s emotional intelligence by observing how they interact with colleagues and customers.
Are they able to stay calm in difficult or stressful situations? Do they show empathy when communicating with others? How well do they handle criticism? These are all signs of a high-potential employee.
5. Talk to their colleagues and managers
Diving into the feedback of colleagues and managers can provide important insights about an employee’s potential.
Leaders should check in with managers and team members to get an idea of how well the employee works in a team environment and other key information that can help make an informed decision. Ask for candid opinions on their strengths, weaknesses, attitude, and behavior.
This strategy provides a more holistic view of the employee’s performance, which can be used to determine if they have what it takes to be a high-potential employee in your organization.
How do you measure high potential & develop high-potential employees?
Before using any specific methods or tests to identify high-potential employees, every organization needs to establish a benchmark for what it considers to be “high potential.”
It could include standards such as:
- Demonstrates leadership skills
- Has a track record of consistently exceeding expectations
- Willing to take on challenging roles and projects
- Commits to continuous learning and development
Once you've identified what constitutes high potential, it's time to start assessing your current employees and develop a strategy to groom them into the HiPos you need.
- Give them more challenging work: Letting them take on tasks that are outside of their current job descriptions will help build their skill sets and give them a sense of ownership over the projects they complete.
- Provide mentorship opportunities: Offer high potential-focused mentorship programs that will allow your HiPos to shadow senior members for an up-close look at how things are done in higher positions.
- Offer regular feedback and recognition: Praise your HiPos for the work they do and provide constructive criticism when necessary to help them grow.
- Set up career progression plans: Investing in career progression plans will give your HiPos a clear path to follow and ensure they stay motivated.
Identifying and nurturing high-potential employees is one of the most effective ways to ensure that your organization is getting the best out of its talent.
Paying attention to the traits we’ve discussed above and using tools such as HPTI can help you spot potential stars in your organization.
Creating a HiPo program is a great way to prepare the right people for higher-level positions. But incorporating mentoring takes it to the next level and allows employees to learn from their managers and other experienced professionals.
With Together, you can create and manage your mentoring program with ease, making sure that your HiPos are getting the best guidance, support, and network to meet the organization's future needs and stay ahead of the competition.
See what Together can do for your HiPo program with this free demo today!