In this guest column, Adam Rogers, Chief Technology Officer at Ultimate software, describes effective ways to use data in recognizing and retaining your best talent.
Finding, retaining and engaging top talent is one of the most difficult challenges organizations face. Developing high-potential employees is crucial for priming future leaders and improving organizational performance while building a culture that fosters growth from within.
Having a solid pipeline of high-potential talent is also one of the best ways to ensure future competitive advantage through intentional, strategic and proactive (rather than reactive) succession planning.
Additionally, not knowing who your top performers are–and whether you’re at risk of losing them–is a significant liability. Statistically, high-potential employees are 91 percent more valuable to businesses than their peers, and losing one of them can cost up to 3.5 times their annual salary, in addition to lost productivity and institutional knowledge.
Yet according to UNC’s Kenan-Flagler Business School, 47 percent of companies say their current high-potential talent pool didn’t meet their anticipated needs.
Clearly, there’s a strong business case for optimizing the potential of your people. With the right strategy and tools, identifying and developing both current and future high-potential employees becomes data-driven and highly effective. You’ll be rewarded with engaged, committed and productive employees, better business outcomes and a strategic succession plan.
Inherent Challenges Of Spotting Potential
So, how do we recognize high-potential employees? It’s perhaps the most difficult aspect of leadership development, and the stakes are high. By promoting the wrong people, we lose valuable individual contributors to management roles and risk losing other top performers to competitors. There’s also a substantial risk to team engagement and morale.
I don’t suggest using personality analysis as a primary predictor of employees’ future success, due to the innate difficulty of judging someone else’s inner workings. Relying on manager nominees and performance reviews to determine future value is also inherently flawed due to personal bias or political networking.
Finally, current performance isn’t always a trustworthy indicator of future potential – studies suggest only 30 percent of high performers are actually high-potential employees, and a full 90 percent of high performers have difficulty adjusting to higher levels of responsibility.
So, if high performance, personality and manager recommendations aren’t quality indicators, what’s left?
The Science Of Potential
Thanks to big data and tech innovation, today’s leaders possess detailed profiles for each employee, including job and salary history, goals and achievements, performance reviews, department-wide recognition, learning-module completion, advanced certifications, previous actions and outcomes and much more.
By coupling this people data with statistically accurate algorithms, advanced HCM tools analyze millions of data points to pinpoint employees exhibiting performance and/or leadership potential. This incredible ability to spot not only current top performers but also those most likely to succeed with strategic development is truly game-changing.
Organizations can build succession plans, consider future compensation or professional development, and decide which top performers are worth investing in long-term. It’s the kind of insight leaders dreamt about 20 years ago.
These advanced systems can also leverage data to identify and predict engagement and retention, allowing leaders to strategically focus on retaining these high-value employees. Managers can be alerted automatically if an employee falls below a specific benchmark, suggest new challenges or training opportunities, or offer promotions or compensation increases.
Everybody wins: Managers benefit from improved employee effectiveness, engagement and retention, and employees enjoy increased recognition and opportunities to positively influence their career trajectories.
In fact, leveraging data to predict future outcomes isn’t limited to internal HCM data. Innovative companies like OutMatch deliver actionable workforce analytics during the recruiting process to help employers predict employee performance long before the offer letter is drafted.
Meanwhile, advanced e-learning platforms like Schoox offer specialized training and career development courses that help future leaders hone their skills while ranking employees on their skills and acquired strengths, giving leaders data-based insights and helping to guide talent decisions.
Turning Potential Into Performance
Once you’ve identified your high-potential employees, it’s important to strategically develop them. High-potential employees usually know they’re outperforming their peers, so it’s crucial to begin the development process before their motivation wanes and they begin looking for outside opportunities. However, it’s important to remember that while these individuals have potential, they’re often not yet ready to jump into leadership roles.
In my experience, there are a few best practices for developing your high-potentials into successful and highly effective leaders:
- Create specialized leadership tracks. This can include anything from education or certifications to multidisciplinary programs across departments and divisions. I also recommend offering unlimited learning opportunities for high-potential employees, if possible. Most high-potential employees will be excited about continuous skill growth and recognize that the investment signals confidence in their long-term value to the company.
- Keep a pulse on how they feel. Cognitive assessment and sentiment analysis can analyze exactly how your high-potential employees truly feel about their roles, their motivations and their expectations. These advanced pulse surveys leverage machine learning and natural language processing to analyze open-ended text and identify themes, emotions and red flags.
- Offer mentorship and coaching. Most of the great leaders I know credit at least part of their success to devoted mentors or coaches who guided them through their careers. Leadership is rife with potholes and detours, and the ability to learn from someone else’s mistakes (or, even better, their successes) is truly invaluable. Consider establishing formal mentorship or coaching programs to help employees establish solid connections.
Leadership, both good and bad, plays a fundamental role in organizational effectiveness, success and morale. Developing a succession program that effectively identifies and develops top talent into a steady pipeline of senior leadership is critical to success.
If you’re one of the many organizations whose succession strategy leaves something to be desired, consider the impact emerging technology can have on the long-term quality and effectiveness of your people and your business.
Adam Rogers, Chief Technology Officer of Ultimate Software, a leading cloud provider of HCM solutions. Based in Weston, Fla., Ultimate Software is a sponsor of the HCM Technology Report. To learn more, click here.
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