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Companies Make Half-Hearted Effort to Spot High Potentials

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8/10/2011

More than one-quarter of large organizations make virtually no attempt to identify their high-potential employees, according to a survey of more than 500 senior managers and executives conducted by AMA Enterprise. Moreover, nearly half of employers make an effort considered merely as satisfactory.

Among the findings are that 27% of respondents reported their organization makes minimal or no effort to identify high-performing contributors, while 48% characterized their endeavors as “adequate.” Just one in five (21%) called their organization’s program to spot future leaders  “extensive.”

“At a time when organizations are struggling to build their leadership pipeline, retain top performers and plan for management succession, it’s ironic that so many are ineffective at the first step, which is to find the most promising employees,” said Sandi Edwards, Senior Vice President for AMA Enterprise, a specialized division of American Management Association that offers advisory services and tailored learning programs to organizations. “The most striking finding, in my view, is that half of organizations don’t seem really committed to holding onto their best talent and developing these people to contribute at higher levels of performance.”

The survey also explored how organizations approach the high potential challenge, explained Edwards. “Less than 10% address this in truly systematic way, so said the respondents. And when we learn that so many companies rely on ‘informal’ methods the alarm bell should sound. ‘Informal’ is often just explaining away a lack of rigor.”

How would you describe your organization’s efforts to identify high potentials?
Mostly informal   44%
Combination of informal and systematic  42%
Systematic   8%
Don’t know  6%
 
Organizations use a variety of methods, typically more than one, in order to discover their promising leaders, Edwards said. “The most common is performance appraisal, according to the findings, but we can’t always be sure what this means. It’s fair to presume these processes are often pretty ‘informal.’ Assessments are used in only one-in-three cases to identify high potentials. However, when used properly, competency based and predictive assessments can provide the hard data to minimize risk and maximize success in identifying the future leaders of the organization.”
 
What are some of the ways your organization uses to identify high potentials? (Choose as many as apply.)
Performance appraisal process    74%
Recommendation of senior managers   69%
Talent assessment   35%
Input from peers  35%
Innovative/unique contribution to the business  42%
Educational background  18%
Don’t know   8%
 
Finding and developing promising employees should be at the core of every company’s talent management strategy, believes Edwards. “There are obvious reasons, but the key one may be the messages management sends to its workers…that they’re valued, that they have a future, and that the organization has a stake in their career. If employees don’t understand the key roles they play, how can management expect to have an engaged workforce, or be surprised when the best employees decide to leave?”

AMA Enterprise conducted the online survey in April and May 2011 in order to explore policies and attitudes in regard to high potential programs. The survey population consisted primarily of senior-level business, human resources and management professional contacts drawn from the AMA database of contacts.

With more than 85 years’ experience and headquartered in New York, American Management Association (www.amanet.org) is a global leader of comprehensive talent development. AMA Enterprise, a specialized division of AMA dedicated to building corporate and government solutions, transforms enterprise-wide talent to fuel a culture of innovation, high performance and optimal business results.