Do you have a process for identifying - and nurturing - your high potential employees, or HiPos? Some new research reveals that more than two-thirds of companies are misidentifying their high-potential employees, leading them in some cases to pursue positions with competitors who may be more willing to invest in their development.

Companies in the U.S. spend billions every year on leadership and development programs, but according to CEB, 55% of these employees will turn over in a five-year period, resulting in wasted dollars and an insufficient leadership bench.

"There is mounting pressure on companies to realize the value of any talent investment made, especially HiPo programs which deliver future leaders for the business," said Eugene Burke, chief science and analytics officer, CEB. "Too often resources, training and career opportunities are directed at employees who lack the aspiration, engagement or ability to be effective at the next level.This misidentification is preventing those with the strongest potential from reaching senior roles and could restrict an organization's future productivity, innovation and performance."

"Too often resources, training and career opportunities are directed at employees who lack the aspiration, engagement or ability to be effective at the next level."

Harvard Business Review published this study that featured some statistics about high-potential employees. After spending six years looking at 20,000 employees in 100 organizations who were seen by their companies as emerging stars, Jean Martin and Conrad Schmidt found:

  • 1 in 3 high potentials employees admits to not putting their all into their job
  • 1 in 4 believed they would be working for another employer by the end of that year
  • 1 in 5 believed their personal aspirations are different from what the organization has planned for them
  • 4 out of 10 had little confidence in their co-workers and even less in management

CEB suggests that companies can improve the caliber of leaders and create incentives for HiPos to stay by applying a four-pronged approach:

  • Redefine "potential". Adopt a clearer definition that accounts for the key attributes employees need to have in order to rise to more senior roles: the desire to assume senior positions (aspiration), manage and lead others effectively (ability), as well as having the commitment to realize their career goals with their current employer (engagement).
  • Measure potential objectively. Rather than relying solely on subjective manager nominations or evaluation, organizations should adopt a systematic process for identifying HiPo talent through objective talent assessment and evaluation.
  • Ask for commitment in return for career opportunities. Proactively evaluate engagement and act to mitigate flight risk among HiPo employees by evaluating their engagement today and their longer-term commitment to the organization in the future.
  • Create differentiated development experiences. Typical HiPo programs provide opportunities for incremental skill building but fail to prepare HiPo employees for realistic future roles. The best organizations help HiPos learn new skills, but also apply existing skills in different roles by exposing them to high-impact development experiences.

This probably seems simple. Maybe deceptively so. Identify, develop, nurture. Then the best people will stay and they'll emerge as key leaders in the future, right?

Obviously it doesn't always wok out like that though, and translating all this "identification" into action and training programs is difficult.

How well does your company retain and develop its top talent?