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Are Your High-Potential Employees 'High' Enough?

Comparing high-potential employees to the wider market reassures senior executives and the board that they're employing the best people

Businesswoman Enters a Maze Value ROI Searching for DollarsSometimes a firm’s search for its high potential employees can seem as pointless and unproductive as the famous caucus race in Alice in Wonderland where everyone runs in any direction they wish and everyone is declared the winner.

The search can involve a lot of energy without much ever being known about those under scrutiny. Those chosen as high-potential employees (HIPOs) may indeed have high potential, but not necessarily “high” compared to an objective measure. They may be people that line managers simply judge to be “doing a great job,” rather than people who will succeed as senior executives.

And while a company’s HIPOs may be head and shoulders above their colleagues, they may be eclipsed by competitors’ employees. And beyond competitors’ employees, those in the process of looking for a job may well have greater potential than the firm’s current crop of HIPOs.

Five Ways to Work Out How Good Your High Potential Employees Are

There are five things that HR teams can do to make benchmarking their HIPOs less like the exquisite nonsense dreamed up by Lewis Carroll and more like management science.

  1. Review your use of data and analytics: Only 25% of managers use HR analytics for important talent decisions and, where they do, they often rely on subjective line manager ratings and internal benchmarks. Without hard data, it’s difficult to judge who to invest in – and how – in a way that will most help the company.

  2. Use external benchmarks: Check your HIPOs aren’t just the biggest fish in a little pond. Remember, you’re not just looking for people who do their current jobs well. You’re sifting for the people who will one day be right at the top. So you need to be sure they are as good as, or better than, those of your competitors.

  3. Develop a plan to close the gaps in your data: Where you don’t have hard data, work out how you’re going to get it. This will almost certainly involve existing performance metrics, but objective measures of ability, aspiration and engagement will tell you more about whether people will succeed in a more challenging role. And about how much they want to get there.

  4. Decide what you want the benchmarks to inform: Ask yourself if current benchmarks give you the data to understand whether the HIPOs you identify and develop actually produce the things that matter, like higher revenues or profits. Agree in advance on what objectives you want to help HIPOs achieve, and ensure the data you use provides the necessary information to shape the way you identify and develop HIPOs.

  5. Use the data to develop all your people, not just your HIPOs: Having the right data will also help you target the development of people who are high performing, but not high-potential, so they too can be nurtured for suitable future roles and kept engaged.

With a proper benchmarking strategy the outcome of your HIPO race will be clearer, and so will the development needs of each individual. Management teams will know exactly where their HIPOs stand in relation to the very best talent and so can make use of their comparative strengths. They can also target development more closely to their evolving business needs and their budgets.

The results are compelling fact, not fantasy. It’s been shown that companies with strong leaders achieve over 90% more revenue and twice the profit growth. And those that provide the right learning and development – across the firm – see a 14% performance increase. Now that’s something that will help win most races.

 

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