Data-Based Strategies to Recognize, Reward, & Retain High-Potential Employees

August 31, 2018      By Adam Rogers

Finding, retaining, and engaging top talent is consistently one of the hardest challenges organizations face. Developing high-potential employees is crucial for priming future leaders and improving organizational performance while building a culture that fosters growth from within. Having a solid pipeline of high-potential talent is also one of the best ways to ensure future competitive advantage through intentional, strategic and proactive (rather than reactive) succession planning.

Additionally, not knowing who your top performers are — and whether you’re at risk of losing them — is a significant liability. Statistically, high-potential employees are 91% more valuable to businesses than their peers, and losing one of them can cost up to 3.5x their annual salary, in addition to lost productivity and institutional knowledge. Yet according to UNC’s Kenan-Flagler Business School, while 56% of companies utilize a formal process to identify high-potential employees, nearly half of these were unsatisfied with their current talent pool.

Clearly, there’s a strong business case for optimizing the potential of your people. With the right strategy and tools, identifying and developing both current and future high-potential employees becomes data-driven and highly effective. You’ll be rewarded with engaged, committed and productive employees, better business outcomes,and a strategic succession plan.

Challenges Of Spotting High-Potential Employees

So, how do we recognize high-potential employees? It’s perhaps the most difficult aspect of leadership development – and the stakes are high. By promoting the wrong people, we lose valuable individual contributors to management roles and risk losing other top performers to competitors. There’s also substantial risk to team engagement and morale.

I don’t suggest using personality analysis as a primary predictor of employees’ future success, due to the innate difficulty of judging someone else’s inner workings. Rely on manager nominees and performance reviews to determine future value is also inherently flawed due to personal bias or political networking. Finally, current performance isn’t always a trustworthy indicator of future potential – studies suggest only 30% of high performers are actually high-potential employees, and a full 90% of high performers have difficulty adjusting to higher levels of responsibility.

So, if high performance, personality, and manager recommendations aren’t quality indicators, what’s left?

The Science Of High Potential

Thanks to Big Data and tech innovation, today’s leaders possess detailed profiles for each employee, including job and salary history, goals and achievements, performance reviews, departmentwide recognition, learning-module completion, advanced certifications, previous actions and outcomes, and so much more. By coupling this people data with statistically accurate algorithms, advanced human capital management (HCM) tools analyze millions of data points to pinpoint employees exhibiting performance and/or leadership potential. This incredible ability to spot not only current top performers, but also those most likely to succeed with strategic development, is truly game-changing. Organizations can build succession plans, consider future compensation or professional development and decide which top performers are worth investing in long term. It’s the kind of insight leaders dreamt about 20 years ago.

These advanced systems can also leverage data to identify and predict engagement and retention, allowing leaders to strategically focus on retaining these high-value employees. Managers can be alerted automatically if an employee falls below a specific benchmark, suggest new challenges or training opportunities, or offer promotions or compensation increases. Everybody wins: managers benefit from improved employee effectiveness, engagement and retention, and employees enjoy increased recognition and opportunities to positively influence their career trajectories.

Turning High-Potential Employees Into High Performers

Once you’ve identified your high-potential employees, it’s important to strategically develop them. High-potential employees usually know they’re out-performing their peers, so it’s crucial to begin the development process before their motivation wanes and they begin looking for outside opportunities. However, it’s important to remember that these individuals have potential: they’re often not yet ready to jump into leadership roles.

In my experience, there are a few best practices for developing your high potentials into successful and highly effective leaders:

    • Create specialized leadership tracks.

      This can include anything from education or certifications to multi-disciplinary programs across departments and divisions. I also recommend offering unlimited learning opportunities for high-potential employees, if possible. Most high-potential employees will be excited about continuous skill growth and recognize that the investment signals confidence in their long-term value to the company.

    • Keep a pulse on how they feel.

      Cognitive assessment and sentiment analysis can analyze exactly how your high-potential employees truly feel about their roles, their motivations, and their expectations.  Advanced pulse surveys, like those found in UltiPro Perception, leverage machine learning and natural language processing to analyze open-ended text and identify themes, emotions, and red flags.

    • Offer mentorship and coaching.

      Most of the great leaders I know credit at least part of their success to a devoted mentor or coach who guided them through their careers. Leadership is rife with potholes and detours, and the ability to learn from someone else’s mistakes (or, even better, their successes) is truly invaluable. Consider establishing formal mentorship or coaching programs to help employees establish solid connections.

Leadership, both good and bad, plays a fundamental role in organizational effectiveness, success, and morale. Developing a succession program that effectively identifies and develops top talent into a steady pipeline of senior leadership is critical to success. If you’re one of the many organizations whose succession strategy leaves something to be desired, consider the impact emerging technology can have on the long-term quality and effectiveness of your people, and your business.


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