How to Identify High-Potential Employees

By Bob Nelson

High-potential employees, those individuals who are thought to have the ability and capacity to be future leaders in an organization, are critical to the viability of any organization. The first step in better managing these employees is identifying exactly who they are.

Some companies have a formal process for identifying this group of future leaders that includes systematically pinpointing such individuals, discussing their potential among senior staff members, and closely monitoring their progress over time. Some firms even categorize these potential leaders as “promotables” (those ready to be promoted when an opportunity arises) and “high potentials” (those that with the potential of being promoted to a higher level with the right development).

Some organizations launch a program for high potential employees without ever clearly defining who those employees are. How does your organization identify high potential employees? Find out. And if there isn’t a way, make one! One thing is certain: If you wait until a crisis to find these people — such as an unexpected departure of a key leader in your organization who you now need to replace — it will often be too late to engage in a thoughtful, rational selection process, even if you wanted to.

And in the case of a serious illness or death of a key leader, the topic of succession may become completely taboo. Why? Because the discussion at that time often seems disrespectful to the ailing senior leader or to the memory of a recently deceased leader. It’s best to discuss and implement a way to identify and develop your HIPOs now, before you need them!

Often, people confuse high-potential employees with top performers, but they aren’t necessarily the same. People can perform their current jobs excellently but still not be viable candidates for promotion to top management. According to the Corporate Leadership Council, 70 percent of top performers lack critical attributes essential for success in future roles.

To decide who best falls into the high potential category, the Council recommends that you evaluate and systematically rank HIPOs according to established criteria. This process involves first interviewing the candidates and then validating your findings through interviews with managers who have worked with the candidates.

In these interviews, you should evaluate employees on the attributes of ability, engagement, and aspiration:

  • Ability: This is the most obvious attribute. To be successful in progressively more important roles, employees must have intellectual, technical, and emotional skills (innate and learned) to handle increasingly complex challenges. Candidates with exceptional ability are typically well-known by their managers and peers.

  • Engagement: Engagement refers to the level of personal connection and commitment the employee feels toward the firm and its mission. You shouldn’t just assume or take for granted this attribute; you may need to do some work to really assess this. For example, just asking employees whether they are satisfied with their jobs isn’t enough. Instead, you need to probe deeper, perhaps by asking a question such as, “What would cause you to take a job with another company tomorrow?” Questions like this prompt employees to share their underlying criteria for job satisfaction and perhaps to identify what’s currently missing from their jobs.

  • Aspiration: Aspiration can be more difficult to measure than the other two attributes. It refers to the desire for recognition, advancement, and future rewards, and the degree to which the employee’s desires align with the company intentions for him or her. Because knowing what people are thinking is difficult, evaluating a person’s level of aspiration really requires a discussion with that person. Be direct and ask pointed questions about what the employee aspires to and at what price: “How far do you hope to rise in the company?” “How quickly?” “How much recognition would be optimal?” “How much money?” And so on. To get the full picture, weigh these responses against individuals’ “softer” objectives involving work-life balance, job stress, and geographic mobility.

The two-step evaluation process of interviews (interviewing the employee and then validating your discoveries by interviewing managers who have worked with the employee) is important because shortcomings in even one of these three attributes can dramatically reduce a candidate’s chances for ultimate success as a future leader in your organization, and the cost of misidentifying talent can be high. You may, for instance, invest tens of thousands of dollars and time in a star employee who jumps ship just as you are looking for him or her to take the lead on a significant project for the firm.

AMN Healthcare is a good example of how an organization considers all three attributes. The company built its annual talent-assessment processes around measures for ability, engagement, and aspiration. As part of its annual succession-planning process, AMN typically conducts interviews with more than 200 rising leaders, specifically to get a read on their engagement and aspiration levels. This information, combined with managers’ assessments of ability, gives AMN a clear picture of its bench strength for talent.