Training and reruitment column, Ciara Aspinall, Stepping Stones
High potential employees are difficult to find and recruit, yet are an incredibly valuable asset within any organisation. These individuals typically represent the top three to five per cent of a company’s employees and have an enormous impact on business results. According to the Harvard Business Review, high potentials are individuals who “consistently and significantly outperform their peer groups in a variety of settings and circumstances… they exhibit behaviours that reflect their companies’ culture and values in an exemplary manner. Moreover, they show a strong capacity to grow and succeed throughout their careers within an organisation – more quickly and effectively than their peer groups do.” It is estimated that under normal business circumstances, high potential employees put in 20 per cent more effort than other employees in the same roles.
Despite the obvious benefits of retaining such talent, many companies struggle to hold on to their top performers. Recent research by Jean Martin and Conrad Schmid shows that one in four high potentials employees intend to leave their current employer within the coming year; one in three admits to not putting their full effort into their existing job and one in five believes that their personal aspirations are very different from what the organisation has planned for them.
What can companies do to improve these statistics and keep hold of their high performers? In the author’s experience the first step should be to establish a formal high potential development programme, geared toward identifying and developing the company’s strongest employees and creating future leaders. Jean Martin and Conrad Schmidt, writing for the Harvard Business Review, studied more than 20,000 employees in more than 100 organisations worldwide and have identified 10 critical components of such a talent development programme:
Explicitly test candidates in three dimensions: ability, engagement and aspiration.
Emphasise future competencies needed more heavily than current performance when you are choosing employees for development.
Manage the quantity and quality of high potentials at the corporate level, as a portfolio of scarce growth assets.
Forget rote functional or business unit rotations; place young leaders in intense assignments with precisely described development challenges.
Identify the riskiest, most challenging positions across the company and assign them directly to rising stars.
Create individual development plans; link personal objectives to the company’s plans for growth, rather than to generic competency models.
Re-evaluate top talent annually for possible changes in ability, engagement and aspiration levels.
8. Offer significantly differentiated compensation and recognition to star employees.
Hold regular open dialogues between high potentials and programme managers, to monitor star employees’ development and satisfaction.
Replace broadcast communications about the company’s strategy with individualised messages for emerging leaders – with an emphasis on how their development fits into the company’s plans.
Aside from implementing such a development scheme, there are a number of other strategies which companies can initiate to boost morale and engagement. Perhaps most importantly is recognition – studies show that the single biggest factor in retention is whether or not high performers feel valued and believe they are considered to be amongst the elite performers.
High performers often join an organisation because they see an opportunity for personal and professional growth. If their expectations are not met, they will quickly look for other opportunities which will present them with the challenges they are seeking. Management should therefore look to promote their rising stars as early as possible. However, if such rapid growth is not possible, retention can be achieved through recognition and through expanding their existing role.
Companies should be prepared to pay for their top talent. It should come as no surprise that the strongest candidates command the highest compensation packages. However, the competition for high potentials does not end when they commence an employment contract. In order to protect a company’s investment it is important to regularly re-evaluate and update top employees’ compensation structures.
There are various other initiatives that companies can implement outside of compensation packages. Firstly, encourage supportive management – no human resources retention policy will be successful unless it has the buy-in from senior management. Secondly, maintain an accommodating corporate culture – a positive, productive culture is not expensive but will have dramatic results on performance. Thirdly, one of the most important aspects of company culture is openness – the more that a company can communicate with employees the better an employee feels. Finally take the time to thoroughly research employees – by finding out what is important to its staff, a company will be far better placed to meet their needs and objectives.
Retaining high potentials is not rocket science, but succeeding requires commitment, creativity and courage. Employee retention must be managed proactively, not reactively. Don’t wait until your high potentials resign to find out why they decide to leave. Instead find out now what would most strongly encourage your existing employees to stay with the company, and help managers to start doing more of those things. Usually the solutions will not cost much to implement, and provide attractive returns on the company’s human capital investment.