In 1998, the war for talent was launched. Talent managers and HR professionals wanted to win the war and the struggle for high potentials was high on every agenda. Yet today, this struggle is even more important than ever before.
Thanks to Covid, changing work landscapes and the evolution of technology, the focus of talent search is changing. Once again, talent managers and HR professionals face new challenges. Their practices need to change significantly to stay ahead of the curve.
Benefits of identifying high potentials (High Potential)
Companies that devote resources to identifying, developing and retaining high potential employees tend to achieve better financial performance.
For example, a recent study by Prof. Matthew Call and colleagues at Texas A&M suggests that adding a star performer to a team can boost its performance by up to 15%.
One of the reasons for this dramatic impact is that talented employees act as positive role models for their colleagues and serve as benchmarks for brand-appropriate, high-functioning behaviour.
Moreover, high-potentials often represent the “crucial few” of the Pareto ratio in a company’s talent pool, as they contribute disproportionately to the company’s overall bottom line and performance.
While the benefits that high-potentials bring seem relatively clear, the path to selecting high-potentials is much more contentious. Part of this puzzle is understanding what drives the need for improved talent management practices, particularly in managing high potentials.
Current drivers for the management of high potentials
The environment in which well-suited employees have to compete has changed a lot. The integration of technological advances also demands new skills and competencies. A McKinsey survey identifies three main drivers of the talent management process that focus on high potential candidates:
- The rapid allocation and movement of talent between projects as needed.
- The need to align engagement strategies with talented employees
- Alignment with corporate strategy and goals.
In addition to the three drivers mentioned above, the study also identified the increased creation and use of cross-functional teams as a key differentiator for companies.
In a fast-changing environment that favours a more flexible, task-oriented approach to work over a more static reality, managing and appropriately developing high-potential employees becomes essential for strategic HR functions and IO practitioners alike.
Given the above factors, how to identify such employees should be on the strategic agenda of every talent management function.
Problems in defining high potential
It may seem obvious, but there is by no means a consensus on what high potential really is.
Many methods of identifying high potential unfortunately contribute to this confusing state of affairs by promoting a generic approach to high potential. The main assumption of such models is that high potential candidates are universally gifted and show potential for any position they find themselves in.
This may be partly due to the solid scientific evidence on the predictive power of cognitive ability, problem-solving skills and logic, which have been shown to be general indicators of job performance across stable life stages. But this is not the whole picture.
Research on the interaction between competencies and occupation-specific criteria shows that taking specific competencies into account also adds validity. In light of such research findings, it seems more likely that individuals have a high potential for very specific competencies and thus for very specific types of jobs.
The right question, therefore, is not “What does high potential look like?” but rather “What does high potential look like for this job in this organisation?”
The notion of a universal high-potential is largely a myth, a particularly unhelpful myth for IO professionals who want to serve the goals of the organisation.
High-potential as context-dependent and multi-layered
Once high-potential is seen as contextual and related to specific tasks, skills, abilities and behaviours, talent identification and management processes can be more focused and purposeful.
As with most assessment tasks, getting as close to the job as possible is essential to accurately selecting the right candidates. In addition, understanding what brand-appropriate behaviours are required for success helps the HR professional understand the context in which potential employees may need to work.
We view high-potential as a multi-faceted feature of the talent and succession landscape. For example, to be high potential for a particular job (i.e. high potential for what?), candidates often need actual skills and experience relevant to the job or the activities associated with the job.
But skills and experience are only part of the picture. High-potential candidates also need to have the specific competencies required to perform well and succeed in the job and in the company. In addition, high-potential candidates often need a solid mental, motivational and emotional foundation on which to build their careers. These aspects can be measured in a scientifically sound way.