Why Do More Than Half of HiPos Drop Out of Development Programs?

Organizations the world over are investing big sums in high-potential employee (HiPo) development programs because they rightly see that developing their employees is the best and most efficient way to find their firm’s future leaders.

And the rewards can be great: CEB research shows that organizations with strong leadership can double their revenue and profit growth.

But all this investment is for naught if a firm’s brightest and best take all their “world class” training and hot foot it off to a competitor. SHL Talent Management research shows that a staggering 55 percent drop out of HiPo programs.

Given the career risk to an HR executive in telling their CEO that half the top talent in the company is likely to leave within five years, they should not only focus on those development programs but on engaging and retaining HiPos.

HiPo engagement

That HiPos are hard to hold onto shouldn’t really surprise anyone, because they are in huge demand. If one firm wants them, then so do their competitors. And they are rare. Only one-in-seven high performers are considered “high potential;” i.e., that they are likely to reach a senior position.

So for those few, it’s a seller’s market. They’re will look carefully at their experience with their existing company and weigh it against career prospects elsewhere.

SHL Talent Management research shows that whether they go or stay depends on their engagement with the firm. It’s one of three essential components (with aspiration and ability) that helps managers understand which of their employees is likely to rise to a senior position, perform well in the role, and stay with the firm long enough to justify the investment.

Before allocating a place on a HiPo program it’s important to understand whether the employee is committed to the organization and sees it as the best place to realize their career goals.

The anatomy of engagement

As our data and research show, engagement can be measured and has two components: ”current engagement” and “future engagement.”

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Current engagement is determined by a combination of past experiences with an employer, and an employee’s current experiences in their job, role and work environment.

Future engagement is determined by an employee’s expectations about their job, career and their employer, or what we call “engagement capital.”

Engagement levels, both for now and the future, will depend on an individual’s rational and emotional commitment to their employer. They are going to be as interested in their alignment with the organization’s mission and goals as they are with their personal challenges and goals.

How to keep HiPos engaged

Almost 60 percent of HiPo employees with high engagement have a high intent to stay; more than double that of HiPos with lower levels of engagement. To keep HiPos engaged, managers should take three steps.

  1. Show them some love. Make sure they know they’re important to you, as that helps build commitment. Amazingly, 63 percent of organizations don’t even tell their HiPos that they are high potential.
  2. Give them a challenge. Give them highly visible and challenging stretch roles. Our research shows that 70 percent will stay if they get a challenging task and unconditional support.
  3. Make them commit. In return for your firm’s investment in them, consider asking your HiPos to commit to your organization for a period. A surprising 89 percent of organizations ask for no such commitment.

Taken together, these steps can improve the success a high potential development program by a factor of 11.

This was originally published on the CEB blog.

Jean Martin is the talent solutions architect at CEB, a best practice insight and technology company. Her areas of expertise span the HR spectrum, including leadership, the future of the HR function, workforce diversity and labor market trends. Contact her at MartinJ@cebglobal.com.

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3 Comments on “Why Do More Than Half of HiPos Drop Out of Development Programs?

  1. While I agree completely that getting HiPo’s engaged and keeping them engaged is essential, I think the vast majority of firms have HiPo problems that start much farther back. That is, very few firms have a defensible, measurable definition of what a HiPo is. Most organizations can identify current high performers with reasonable certainty (there, even impressionistic judgment is usually close enough to the target to be workable, if not defensibly measurable). However, their near-total reliance on “I know it when I see it” leaves HiPo programs chock-full of high performers who are either well-placed or who in fact have limited stretch or even limited ambition.

    Jean Martin and CEB have my highest respect and insightful articles based on credible research like the above are the reasons why. I have no quibble with the content presented here, but I assert that we can’t do a good job of developing high potentials if we don’t know who they are, and we can’t know who they are if we don’t have a real and meaningful way to define and demonstrate high potential that is more sophisticated than a business unit head saying, “yeah, that guy.”

  2. Jean,

    This is an excellent article. Thank you!

    I’m interested in the third recommendation: Make them commit. The article states that a “surprising 89% of organizations” do not ask for a commitment from their HiPos.

    Is this surprising? Or is this a conscious choice that companies are making because employees (particularly HiPos) are skeptical of these arrangements?

    I am very interested in your thoughts and experience in this matter. I am the Co-founder & CEO of a company called Virtuali (http://govirtuali.com). We help companies develop their HiPo emerging leaders with our Go! program, which is like a short-term MBA meets study abroad.

    We have recommended that potential clients incorporate “retention agreements” as part of our program, but no one has done this thus far. It seems as if some (if not many) have a strong aversion to this type of agreement.

    If you are interested in continuing the conversation offline, please send me an email at sean@govirtuali.com.

    Thank you again!

    Regards,

    Sean Graber

    http://govirtuali.com

  3. Jean — would like to know if your research covers the average length of time a HiPo program lasts — from start to finish (which assumes the end results in a new position?). I think one reason HiPos leave is that they get tired of the endless program dragging on with no goal or clear end result provided. Peter Cappelli writes about these programs and says the old days of 2-3 year programs are over and that programs are now almost “just-in-time” with specific jobs in mind for each person. “Just-in-time” may be an exaggeration but no longer than 6-12 months with gradual immersion in the new job.

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