January 29, 2016

Identifying and nurturing high potential employees

Identifying and nurturing high potential employees is really important, yet more than three quarters of organisations fail to do it. Recent research by HR consultancy, Penna, found that most organisations do not have a talent assessment process.

A huge number (79%) do not have any assessment processes or tools in place to determine where their top talent lies. Almost a third (30%) of the 1,000 managers polled in the survey said their organisation had not formally defined or articulated what constitutes a high potential employee.

This is despite the fact that 81% of the respondents said that developing employee potential was either ‘fairly’ or ‘extremely’ important. Many of the managers are aware that this failure to formally engage with and develop their best employees could have negative repercussions for their organisation. Half of them acknowledged that it could lead to employee disengagement, 43% said it could lead to high employee turnover and recruitment costs and 34% said it could lead to decreased productivity.

These figures beg the question: ‘Why are so many organisations not seeking out and nurturing their top talent?’ A third of the respondents said it was a senior management issue and that they were not given any support to formalise the process. A quarter said it simply was not a business priority and 24% said they saw little point in identifying talent because their organisation did not have any development initiatives in place to nurture them once they had been identified.

At the same time that Penna interviewed the 1,000 managers, it also interviewed 1,000 employees to get their view on that situation. The results correlate with the management research: only 13% of employees said that their employer does a lot to recognise potential in the organisation.

Employees say this failure to nurture key talent is causing people to vote with their feet – an estimated 23% of valuable talent has either left the business or been allowed to go to waste in the past 12 months.

Do employees mind? Yes. Seventy one percent said they were more likely to stay in the employment of an organisation that recognised and encouraged their potential.

Even when potential is identified, only 23% of employees said that their employer had invested in developing their skills. This means that 77% of those highlighted as high potential did not receive any extra input.

When managers are looking for potential, 62% are focusing their efforts on a very narrow resource pool: namely, 24-35 year olds.

DPG published a post on the value of high potential or high performing (HiPOs) a little while ago, citing research by insight and technology company CEB Global that found that many HiPO programmes are failing to deliver.

However, CEB Global did also say that true HiPOs are twice as valuable as other staff and 11 times more likely to achieve a senior position.

What’s going wrong? Again, it seems that organisations are not making good use of the technology and processes available. Only one in three organisations surveyed by CEB Global use hard assessment data to identify their top talent and 46% of leaders admitted that they do not have systematics processes in place to identify top talent.

Exactly half of HR professionals lack confidence in their HiPO programmes, according to CEB Global.

“Organisations need to take a more disciplined and systematic approach to identifying potential,” says Penny de Valk, MD of Penna’s Talent Practice. “Many have future leaders sitting under their noses but just can’t see it. Organisations need to have a clear definition of what potential actually looks like, a clear way of measuring it and link this to appropriate development interventions to ensure potential is optimised.”