Henry Ford is credited as saying, “the only thing worse than training your employees and having them leave is not training them and having them stay.” In the real world, however, limited budgets force organizations to be much more selective, which explains the growing interest in high potential (HiPo) identification. An employee’s potential sets the upper limits of his or her development range — the more potential they have, the quicker and cheaper it is to develop them.

Scientific studies have long suggested that investing in the right people will maximise organisations’ returns. In line with Pareto’s principle, these studies show that across a wide range of tasks, industries, and organisations, a small proportion of the workforce tends to drive a large proportion of organisational results, such that:

  • the top 1% accounts for 10% of organisational output
  • the top 5% accounts for 25%, of organizational output
  • the top 20% accounts for 80% of organizational output

Thorough research over many jobs and across many organisations in multiple industries highlights a clear pattern: the payoff from employing top talent — defined as the vital few who account for the biggest chunk of organisational output — increases as a function of job complexity.

It is also noteworthy that talented employees are “force multipliers”, raising the performance bar for their colleagues. In other words, they model and teach winning behaviours that shape high-performing cultures. Simply adding a star performer to a team boosts the effectiveness of other team members by 5-15%. No wonder, then, that study after study shows stronger financial performance in companies that make proportionally greater investments in identifying and developing top talent.

If we are going to invest in the right employees, the key question concerns who they actually are. This begs the question of what highly talented people are like. In other words, what are the key indicators that signal star potential?

As academic reviews noted, the first and most important decision that needs to be made in this regard is to decide “potential for what?” In our view, HiPo interventions should focus on predicting who is likely to become a key driver of organisational performance. That is, they should define future stars as the people who will “consistently generate exorbitant output levels that influence the success or failure of their organisations.’’ Fortunately, science reveals that regardless of the context, job, and industry, such individuals tend to share a range of measurable qualities, which can be identified fairly early in the hiring process.

In a review that compared scientific research on predictors of job performance to the qualities in highest demand for the 21st century workforce, three general markers of high potential were identified.

Ability

First and foremost, ability to perform the job at hand is paramount. However, in forecasting potential to excel in a bigger, more complex job in the future, the question shifts to how likely an individual is to be able to learn and master the requisite knowledge and skill. The single best predictor of this is IQ or cognitive ability assessment.

Social skills

The next category reflects the growing significance of team work and collaboration in modern organizations. At a basic level, employees have to be able to get along and earn the support of supervisors and co-workers.

Social skills involve two fundamental abilities: the ability to manage yourself and the ability to manage others (relationships). Employees likely to succeed in bigger, more complex jobs are first able to manage themselves — to handle increased pressure, deal constructively with adversity, and act with dignity and integrity. Secondly, they are able to establish and maintain cooperative working relationships, build a broad network of contacts and form alliances, and be influential and persuasive with a range of different stakeholders. And for senior roles, they have to be able to develop sophisticated political skills — the ability to read an audience, decode the unspoken rules, and find solutions that satisfy the often competing interests of key power brokers.

The ability to manage oneself and to manage others are the core elements of emotional intelligence which can be assessed by psychometric assessment and further refined through training and development.

Drive

The third category concerns the will and motivation to work hard, achieve, and do whatever it takes to get the job done. It is easily identified as work ethic and ambition. This deeply motivational category is the accelerator that multiplies the potential influence of ability and social skills on future success. Ability and social skill may be considered talent; but potential is talent multiplied by drive, as this will determine how much ability and social skills get put to use.

Drive can be assessed by psychometric assessments that measure conscientiousness, achievement motivation, and ambition. It can also be identified behaviourally — as signalled by how hard an individual works, willingness to take on extra duties and assignments, eagerness for more responsibility, and even readiness to sacrifice.

In sum, most organisations can upgrade their talent identification processes by using a combination of interview and psychometric assessment. Not many employees are highly able, socially skilled, and driven — but if you bet on those who are, which involves evaluating these qualities as accurately as you can, through interview and psychometric assessment, you will end up with a higher proportion of future stars who will contribute disproportionately to the organisation. Investing in those individuals will produce the highest ROI.

Adapted from article by Dr. Tomas Chamorro Premuzic (2017)