The costs of recruiting and training a new employee can be high, almost three times the salary. According to SHRM, a position that pays USD 60,000 may require up to USD 180,000 to fill.
This is due to productivity loss, demands for higher compensation, time off, the cost of advertising and training for the position, and other factors. Further, the cost per hire will vary depending on the company size, number of people being hired, roles, seniority, and the hiring process.
Thus, recognising and retaining high potential employees is the best route to take for all employers and HRMs.
Understanding High Potential Employees
Some employees not only perform well but go one step beyond to outdo their peers and achieve more. These are workers who have the drive to make changes, stand out, and have a significant impact on the future of their company.
Who Are The High Potential Employees?
A high potential employee or HIPO is someone who has the ability and the aspiration to exceed expectations in their present role to rise to more senior, critical roles. This makes high potential employees one of the most valuable assets of any organisation.
As a plus, these are workers who
- understand being accountable for their actions,
- work well both individually and as part of a team, and
- have the knowledge to take up additional responsibilities.
Key Characteristics of High Potential Employees
A worker will only show loyalty to their organisation if they feel heard, recognised, and appreciated. This makes it essential for HRMs and managers to learn what a high potential employee looks like.
To learn who they are, you can look at the following characteristics of high potential employees:
- Provide a high quality of work in every assignment.
- Driven, ambitious, and motivated to teach themselves new things.
- Has high emotional intelligence and knows how to foster positive relationships
- Adaptable, quick to learn, and willing to embrace changes and new ideas.
- Shows leadership potential even when placed in a non-leadership role.
- Looks at results and other deliverables and works towards achieving all their goals.
- Has a positive attitude and is resilient when posed with a challenge.
- Has strong communication skills and provides constructive feedback.
- Can think strategically and make strong decisions.
- Knows how to take initiative and does not need to be directed or coached all the time.
These high potential trait indicators act as excellent criteria when a manager or an HRM wants to identify a high potential employee.
How to Identify High Potential Employees
High potential employees are usually the top 5% of a company. However, when identifying them, companies often have a lapse. For instance, if a company organises a high potential employee development program, it often happens that 40% of the employees do not belong there.
This is mostly due to the fact that more weightage is given to
- Deliverables and KPIs
- Honouring commitments
- Fitting into the company’s culture and values.
On the other hand, the below criteria often take a backseat
- Collaborative and leadership skills
- Delegation skills
- Being adaptable and ready to learn
- Emotional intelligence
Thus, an organisation often prioritises employees who align with its values than ones with potential. However, to be a high potential employee, the worker should possess a meld of all the skills.
Methods for Assessing High Potential Employees
An employee performance management system or software can help significantly when it comes to assessing whether an employee is HIPO or not. Some high potential assessment tools for employees are:
360 Degree Feedback
Using inputs collected from multiple sources, including both peers and the management, this tool provides a complete view of how an employee behaves, performs, and approaches their tasks. Thus, it accounts for not only a person’s abilities but also their social skills.
Leadership Potential Assessments
This assesses whether or not an employee is suited to a particular role. This can be learned and identified with the help of
- Skill assessments
- Situational decision-making tests
- Behavioural assessments
- EQ assessments
Psychometric Tests
These tests are designed to identify cognitive abilities as well as behavioural tests. Further, they are also used to assess skills that might not be in use at the present job role. Thus, they can predict which worker has the potential to achieve more in a given talent pool.
Using these employee performance management solutions, it becomes easier to identify high potential employees.
Signs That Indicate Employee Potential
Thus, to identify high potential employees, you can ask the below questions as an HRM:
- Is the employee in question adaptable?
- Do the employees achieve all their goals and targets on time?
- Will they be able to lead if given the opportunity?
- Are they a strategic thinker with excellent performance?
- Are they willing to learn and teach others?
- Can they work alone and in collabs?
- Do their views align with the company’s culture and interests?
Only a person that adequately meets all these criteria is the right fit to identify as a high potential employee.
Developing High Potential Employees
Simply assessing high potential employees and leaving it as such is not enough. Instead, once you know who your high potential employees are, it is time to cultivate their skills and motivate them to stay with the organisation.
Coaching High Potential Employees for Leadership Roles
To adequately nurture the skills of the workers you identify as a high potential employee, try the following:
- Take a look at the key traits that elevate their status to a high potential employee.
- Use a personality profile assessment to learn more about their soft skills.
- Map out a career path for these employees.
- Develop a training plan to adequately prepare these workers for their future roles.
- Set clear expectations regarding their tasks, skills, and behaviors.
- Provide them an opportunity to use what they have learnt in high potential employees development programs.
- Connect these employees with present leaders and promote networking.
- Use succession plans as an option for growth and incentive.
By coaching high potential employees, you stand to gain the below benefits:
- Increase performance and create a more productive workplace.
- By improving employee engagement and retention, cut back on the costs of hiring.
- Ensure knowledge retention and transfer.
- Map out a faster career development plan for your employees.
- Allow your high potential employees to bring a fresh perspective to the table.
Implementing High Potential Employee Programs
Once you learn the employee potential of your workers, it is time to enroll them in high potential employee development programs. To ensure the highest efficacy, here are the steps to follow:
- Set up a training program for high potential employees’ development.
- Tailor it to meet the needs of your organisation.
- Allocate a certain budget to implement this.
- Develop training components that align with organisational goals.
- Provide mentorship and coaching for high potential employees.
- Assign cross-functional projects to gauge the learnings.
- Set up key performance indicators (KPIs) that evaluate the program’s success.
- Use pilot programs to fine-tune the high potential employee programs.
Using the above steps, HRMs can create a workplace that cultivates and nurtures talent.
Strategies for Managing High Potential Employees
One of the best ways of managing high potential employees in an organisation is incentivising workers for a job well done. To know if these employees are doing well, offer them assignments that align with the high potential employee programs. Further, implement flexibility in job assignments. Offer rewards to these employees based on their goals, i.e., increments or being a part of succession plans.
Using Success Circles™ can add value to a company’s performance management and appraisal system. Further, the design of this software tool makes it easier to identify which employees have the most potential to exceed expectations when given the opportunity.
To add, it is important to create a healthy and positive work culture. Personalised development plans that use employee performance management solutions as their basis can also help. To top it off, HRMs can deploy an employee performance tracking software to assess their workers continuously.
Enhancing Employee Engagement for High Potential Talent
Studies show that when a high potential employee leaves the company, the organisation stands to lose 3.5 times their annual compensation. And this does not even account for the institutional knowledge that leaves the company.
Thus, employee retention and associated compensation and engagement are the need of the hour for any organisation. 87% of employers believe in the importance of improving employee retention. Still, 44% of employees leave owing to lack of recognition for their achievements.
Why Improving Employee Engagement Matters
Between the businesses that fall in the top and the bottom quartile vis-a-vis employee engagement, a Gallup study found the following:
- An 81% difference in the number of employees absent.
- 18% difference in high-turnover organisations.
- 18% change in productivity of the workplace.
- 23% change in profitability of the business as a whole.
- 64% in safety incidents (or accidents) at the workplace.
This data brings forth how improving employee engagement ensures a safer, more productive workplace, workforce retention, and a profitable business. This makes improving employee engagement a key task for HRMs as well as the leadership team.
Practical Steps to Enhance Engagement
To promote employee engagement, HRMs can take the following steps:
- Create a positive and nurturing workplace culture.
- Offer ample scope for growth and career development.
- Offer recognition for achievements.
- Encourage collaborative work and open communication.
- Have data-driven indicators in place to monitor development.
Further, using an employee performance system to ensure the above is an excellent tool for a bias-free process.
Conclusion
Identifying, assessing, and managing high potential employees are the building blocks of a productive workforce. Using the right strategy and high potential assessment tools, HRMs can accurately learn which employees have the scope to perform well.
Employee performance management software can help demarcate employees that have the potential to outperform their peers and can move on to a leadership role. By retaining your high potential employees, create a healthy workplace. Further, offer your high potential employees guidance and responsibility to help them reach their potential.
