High potential employees (aka HiPos) are the people in your organization who have the capacity to assume greater levels of leadership, either upwardly or laterally, and take on more challenging roles.
As the economy takes gradual (and cautious) steps toward recovery, many financial institutions are coming head-to-head with some new challenges, including how to engage, develop and retain top talent.
And the situation isn’t going to get easier, as competition for top talent is expected to get even stiffer.
According to the Corporate Executive Board (CEB):
“25 percent of employer-identified, high-potential employees plan to leave their current companies within the year, as compared to only 10 percent in 2006.”
That’s an attrition rate 2.5 times greater than just five years earlier. A revealing 64 percent said their current employment experiences were having little impact on their development.
To make things even more interesting, banks must also build new competencies in response to new more rigorous regulatory mandates. According to KPMG, many banks are “scrambling to build the capacity for people in a wide range of functions, from financial analysis, finance, and accounting to risk management and technology.”
Financial institutions that want to retain the best-of-the-best need to look at making the attraction and retention of HiPos a priority — one where development or upskilling plays a key role.
“Organizations are at a real risk of losing their most talented employees as disengagement levels increase, the economy recovers, and the labor market warms up,” said Conrad Schmidt, executive director and chief research officer of CEB’s Corporate Leadership Council. “It is paramount that companies act now, not only to re-engage and retain high potential employees, but to re-evaluate and shore up their succession plans and preserve leadership development within their organizations.”
Case in point:
Maine-based Halogen customer, Gorham Savings Bank, has been staying ahead of the curve in retaining top talent by investing in employee development. By stressing the importance of providing employees with feedback, coaching and development opportunities, the bank has already reduced turnover by 50 percent. Gorham Savings Bank attributes its success, in large part, to its progressive talent management strategy.
You’ve got HiPos, now how do you motivate them?
It’s a fact. Many organizations simply do not have the talent management processes or practices in place to effectively identify and manage HiPos. For example, it’s common for managers who know they have these prized individuals, to hoard them (wouldn’t you?). And even when HiPos can be identified, company leaders don’t always have a good understanding of how to actually motivate and retain them.
Contrary to popular belief, when it comes to motivating HiPos it’s not all about the pay and benefits. HiPos know they can secure similar compensation packages fairly easily elsewhere. They are looking for opportunities to differentiate themselves, to have more control over their careers and to take on more challenging assignments with real risks and rewards.
So to motivate and retain your HiPos, you can do things like:
- Assign them to talent or acceleration pools to support their development and prepare them for career progression.
- Ensure they are given challenging or plum work assignments that leverage or even stretch their skills.
- Involve them in strategic initiatives that increase their exposure to other parts of the business.
- Support them in building a career network (both in and outside the organization)
But to do any of these well, you need some standards and processes in place. What criteria do you use to determine if someone is in fact a high potential employee, and how do you nurture your hight potentials once they are identified?
To nurture your HiPos, you need to be systematic
According to CLC Pro, 48 percent of managers are ineffective at identifying and developing HiPos because of a lack of standards and or, when they exist, an inconsistency in the way they are applied.
So you need to implement processes for creating criteria, assessing performance and controlling compliance with those processes. When you do, the benefits are numerous:
- Managers more readily and easily identify HiPos when they have criteria (competencies) to use and a system in place to test for them.
- Managers are more likely to put development plans in place for HiPos if the process is not burdensome (availability of talent or acceleration pools with defined curricula).
- Senior leaders are more likely to mentor HiPos if their development needs are identified and made visible to them.
Financial institutions that use talent management best-practices to build a strong company culture can reap significant business benefits. For example, Deloitte research has correlated a 5 percent increase in employee engagement to a 3 percent increase in customer loyalty and shareholder value at one retail bank.
Another one of our clients, Florida-based Ocean Bank, took a practical, methodical approach to developing their employees and drive better business outcomes. The bank’s goal was to improve the percentage of clients using multiple services. Talent management professionals at the bank quickly saw the potential in training managers to develop their teams’ cross-selling skills – helping to turn the issue around and improving their results.
They trained managers on the cross-selling behaviors they needed to develop in their teams and on how to provide strong feedback. They also trained front-line employees who were expected to perform the cross-selling. The bank then tied the managers’ and the front-line employees’ goals to the business’ goals.
Today, the talent management team leverages the tight integration of Halogen Performance™ and Halogen Learning™ to provide senior-level executives with training effectiveness metrics. Using this system as part of an integrated talent management approach, the Ocean Bank HR team has successfully invested in developing their people, while aligning employee goals with positive outcomes for the business.
Once you’ve created a program to identify the HiPos in your workforce, begin to look at solutions that will help you implement a more systematic approach to developing and nurturing them.