How to identify High-Potential Employees for Future Leadership Roles

High-potential employees (HIPOs) are an important segment of the workforce.

In a survey by the organizational consultancy Korn Ferry, 98% of respondents said knowing which employees have high potential is important for their organizational success. And 55% said they have HIPO programs in place as a result.

How to recognize a HIPO

Who qualifies as a HIPO? According to the leadership development research firm Zenger Folkman (Zenger), HIPOs usually rank in the top 5% of their organization. They’re perceived to be highly capable and motivated, and are likely to rise up the corporate ladder.

Once identified, organizations are often quick to involve them in HIPO development programs, Zenger notes. But the path to success is not one size fits all. Zenger reviewed close to 2,000 employees across three organizations and found that many employees identified as HIPOs might not be good candidates for future leadership roles.

After evaluating 360 assessments, Zenger found that more than 40% of the employees designated as HIPOs were below average for leadership effectiveness, and 12% were in the lowest quartile. This is a long way from the top 5%.

Korn Ferry’s data mirrors Zenger’s. Just 29% of its survey respondents said they had confidence their businesses had the leaders needed for future success.

So how can you identify who is a HIPO and who is not

To avoid misclassifying workers as HIPOs when they are not, Zenger identifies several traps to steer clear of:

  • Don’t assume that just because someone is a top performer in their current role they’re leadership material. While technical experience and knowledge are important, a person with superior technical skills may still require leadership development. Leadership isn’t necessarily innate.
  • Don’t place too much emphasis on whether an employee is productive and self-motivated. Having a desire to achieve results is a top trait managers look for in direct reports. But just because an employee is a top individual contributor doesn’t necessarily mean they’re leadership material.
  • Don’t rely on an employee’s track record of honoring their commitments. A can-do attitude and reliability are great assets, but they don’t always translate to success in leadership roles. If a leader refuses to delegate, they can become overwhelmed by the sheer amount of work they’re responsible for.
  • Don’t fixate on any one trait. One of the organizations Zenger researched placed a heavy emphasis on being nice. For other organizations, volunteering to take on new challenges was highly valued. As a result, managers misidentified employees as HIPOs simply because they displayed characteristics that aligned with their organization’s core values — even though they weren’t all that effective in other areas of work.

The key takeaway: Don’t zero in on one quality to determine if someone is a match for HIPO development. And don’t overvalue things like cultural fit in deciding whether someone is a HIPO.

So, what traits should you look for?

According to Zenger, two traits that all HIPOs share are the ability to motivate others and strategic vision. The firm believes these factors far outweigh things like cultural fit or an employee’s individual results.

Zenger also recommends paying close attention to what employees want out of their career paths. Steering high-performing employees toward senior management could backfire if they’re better suited as individual contributors. That miscalculation could have consequences that go beyond derailing the individual employee. If they become a bad boss, they and their team may end up unmotivated and leave the organization altogether.

On the other hand, don’t write off under qualified employees who want to assume leadership roles, Zenger notes. Instead, focus on providing them with learning and development opportunities in leadership.

According to Zenger, strong leaders excel in: 

  • Innovation
  • Relationships
  • Acumen
  • Inspiration
  • Strategic vision
  • Execution

Developing these skills can help you spot and nurture employees with innate leadership potential.

Other ways to identify HIPOs

Close to 20% of the respondents to Korn Ferry’s survey lacked confidence that they had selected the right people for their HIPO development program. And 66% of respondents said their organization may be missing out on identifying HIPOs because they aren’t looking deep enough.

Plum, which helps organizations make talent decisions, says psychometric assessments may help identify attributes that aren’t evident from performance reviews or a person’s resume. These assessments can evaluate personality, social intelligence, problem-solving skills and other key traits. To build an effective, long-term strategy for developing HIPOs, being able to objectively measure aptitudes for adaptability, communication and innovation is key, according to Plum.

The bottom line

Whether you use personality assessments, manager feedback or a combination of both, learning how to spot HIPOs in your organization can help you fast-track them into valuable leaders.

For more information

To learn more, reach out to our Human Resources Consulting team.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2022 Applied Systems, Inc. All rights reserved.