…So this morning I stumbled across a piece from way back by Compensation Strategist Laura Schroeder. It’s a really solid read, and you can check it out here. The gist of the piece is essentially that a majority (70ish percent) of talent that employers label as high potential – and subsequently invest in – are poor investments, either because (i) their skills aren’t transferable to the next level or (ii) because they aren’t committed to the Company.
In the case of the former, there has been much written about the subject, including this piece from Korn Ferry which lays out a framework of how to assess if / when a talent should be promoted to the next level. But today I want to talk about the latter group – high potential talent that could be future leaders in your organization… if only they were willing to stay.
Schroeder points out that companies which aren’t leaders in some combination of rewards, development, and culture are at risk of losing their highest potential people because said talent is likely to find the top of the market (or at least a higher point in it) over time. Heavily investing in such talent not only speeds up the timeline in which this process occurs, but it also has the double edged effect of representing a sunk cost to the employer.
…Ergo, if we start from the place that these statements are true at least some of the time, to what extent should they be impacting talent strategy? If I’m a leader in an organization that can’t compete at or near the top of the market on pay or development (and my culture also fails to serve as a talent attractor and/or hook), should I instead be focusing on developing a less conventionally talented segment of my workforce? On one level most organizations adopt such practices in their recruiting efforts already: As an example; most companies don’t recruit at, say, Harvard or Stanford business school precisely because those graduates will by and large join the top 1% of employers which offer the best possible opportunities. In this respect I suppose that it similarly makes sense to assess what sorts of people are staying with your organization once you hire them and to then invest (and recruit) accordingly.
…Still, this approach sort of feels like surrender to me. The best companies are so because they have the best ideas and the best ability to execute on those idea…. both of which require the best people. As such, while investing in someone because they are predisposed to stay with your organization should certainly be a big consideration when assessing who your high potentials are… I also think that if someone is an incredible talent that the smart play is to figure out how to hold onto them… even if that means outsized compensation, development, and/or work considerations. Because in the long run, having the best talent wins.
Or maybe I have this wrong? This is just a Wednesday morning thought stream, so as always please share your thoughts in the comments section below.