I recall with sincere fondness the memory of playing a few childhood games – Life, Monopoly, Chutes and Ladders (Snakes and Ladders), Scotland Yard and Ludo.
Each of these games has some message or theme associated that could be related in some form or other to the Corporate World – risk/reward, entrepreneurial spirit, getting ahead with hard work, perseverance, moving two steps back after a mistake made, etc.
The player who leads the game despite all the associated risk and hard work, the player who shows the right attitude, the player who balances risk with caution and aggression with diffidence can be referred to as the “Celebrated” High Potential.
Speaking in simple terms, high potentials are employees who demonstrate capability to be groomed into future leaders. Research conducted by the Harvard Business Review shows high potentials represent the top 3 to 5% of a company’s talent. But, the big question of the hour that arises is that if HiPo’s represent such a niche population of the organization who are performing well and seem to at the top of their game, why is it so difficult to retain the HiPo’s? A recent study conducted by the CEB reveals that 25% of employers – identified high potential employees plan to leave their current companies within the year as compared to 10% in 2006. This is quite alarming especially when combined with the data that 84% of HiPo’s leave the organization within two years of completing the in-house High Potential Development Program (2013 Right Management High Potential Survey).
The war for talent is showing no signs of letting up even in sectors that are experiencing significant growth. Even though organizations across the globe have some form of leadership development program specifically catering to the HiPo’s, translating them into action is much more difficult and remains a challenge. Most firms have trouble keeping the top talent despite their large investments in talent management programs. So why do they jump ship so soon?
As a consultant with Right Management, I have had the opportunity to manage and support multiple leader development and high potential development assignments. To begin with, high performing employees are not necessarily high potentials. High potentials are merely a subset of the high performers, with research claiming that only 14% of high performers are considered high potentials.
What I have observed is that HiPo’s are very hard to hold onto because they are in huge demand. If one firm wants them, then so would their competitors. Employees consider the HiPo development programs as opportunities for professional growth; however they can be a costly expense for the organization if the employees do not stay back with the organization.
The real cost of losing a High Potential employee is up to the tune of 3 ½ times (source: talentmgmt.com) the employee’s annual compensation and that includes:
· The cost of hiring a new employee including the advertising, interviewing, screening, and hiring
· Cost of on-boarding a new person including training and management time
· Lost productivity... it may take a new employee 1-2 years to reach the productivity of an existing person
· Lost engagement... other employees who see high turnover tend to disengage and lose productivity
· Customer service and errors, for example new employees take longer and are often less adept at solving problems
· Training cost. For example, over 2-3 years a business likely invests 10-20% of an employee's salary or more in training
· Cultural impact... Whenever someone leaves others take time to ask "why?"
There’s hope yet. In order to keep the HiPo employees around long enough for them to reach their potential, organizations need to engage them in a different way. They should be:
· Given visibility and access – The increased visibility through organizational initiatives and events translates into more career opportunities, and a chance at furthering individual development. High potentials should also be included in senior level/cross-functional meetings where their opinions should be sought after more frequently.
· Given special assignments and training – Special assignments or high impact projects, participation in task force team and role rotations should be considered frequently for the HiPo’s
· Given higher and wider responsibilities – When HiPo’s are provided more responsibilities it usually translates into higher ownership. While it may seem that high potential employees, are rewarded with more work, the assignments bring along with them a wider scale of influence and increased appreciation.
Recognizing HiPo employees isn’t easy, but it is necessary. While you may have a slew of high performing workers, only a handful of them have the particular set of skills and abilities to effectively lead a business or organization. The bigger problem, however, is retaining these employees long enough to transition them into company leadership roles. Because HiPo employees are such a hot commodity in the workplace, employers have to stimulate and challenge them in order to maintain high engagement levels. Doing so helps to reduce the dropout rate from high potential development programs and subsequently, increasing the internal leadership success rate.
“A lot of people, when a guy scores a lot of goals, think, 'He's a great player', because a goal is very important, but a great player is a player who can do everything on the field. He can do assists, encourage his colleagues, give them confidence to go forward. It is someone who, when a team does not do well, becomes one of the leaders.” - Pele
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