Talent development professionals recently reported an increase in demand for high-potential employees, according to a recent survey conducted by the University of North Carolina at Chapel Hill Kenan-Flagler Business School. But, almost half (47%) state that the current pool of high-potential talent does not meet the anticipated future need.

The survey findings are based on the responses of 1,361 talent development professionals. Eighty-four percent of the respondents reported that the demand for high-potential talent has increased in the past five years, driven primarily by growth (74%) and competitive pressure (61%).  While demand is growing, the research suggests a lack of confidence in the ability to meet that demand.

For example, the majority (52%) of talent development professionals reported only moderate satisfaction with their organization’s current process for identifying high-potential employees.  And, half of those surveyed said that they are only moderately confident in their organization’s ability to develop high-potential talent. Forty-nine percent reported moderate confidence in their organization’s ability to fill mission-critical roles.

Challenges in Identifying High Potentials

So, why are so many organizations struggling to identify high-potential talent?

According to the research, the most common challenge for organizations in identifying high-potential talent is the focus on current performance metrics rather than future potential. Comments from the survey respondents suggest that many involved in the selection of high-potential talent do not understand and/or recognize the difference between performance and potential.

Another common challenge reported in the research is the use of inconsistent criteria to define potential. When asked to rate how consistent their organizations are in applying high-potential selection criteria, respondents reported that they are only moderately consistent within divisions and departments and even less consistent across divisions and departments.

Similarly, the criteria used to identify high-potential talent are only moderately consistent over time. In addition, when asked what one thing would improve their ability to identify high-potential talent, the most common response was consistency.

Competencies for Identifying High Potentials

Assuming that organizations can apply the selection criteria consistently, it’s essential to identify the competencies that are most important in selecting high-potential employees. Strategic thinking/insight was reported as the most important competency (69%) followed by drive for results (67%). Talent development professionals anticipate that change leadership will also become more important in the future. And, when asked how important various competencies will become in three to five years, change leadership emerges as the most important – tied with strategic thinking/insight.

Proficiency of High-Potential Leaders

So, how proficient are high-potential leaders in each of these competencies? High-potential employees were rated as more proficient than typical employees on every competency. Those who reported that their current talent pool meet or exceed future leadership needs also rated their talent as more proficient than those who believe their current talent pool will not meet anticipated future needs. This is true for all competencies and the research indicates a significant difference when it comes to “big picture perspective.” High-potential employees were rated the most proficient in drive for results as well – one of the most important competencies for selecting high-potential talent. They were also rated highly for learning agility.

Strategic thinking/insight was ranked as the most important competency used to identify high potential, however, proficiency in this area is rated as average compared to the others. Proficiency in change leadership ─ identified as a competency that is growing in importance ─ was rated among the lowest. These findings suggest that organizations should focus more energy on talent development in these areas. Builds effective teams and inspires/motivates others were also identified as opportunities for improvement.

Additional Factors for Identifying High Potentials

In addition to competencies, organizations are looking at other factors to identify high potential. As one might expect, future performance was reported as the most important factor (70%) in selecting high-potential employees, followed closely by current/sustained performance (66%).  Culture fit and commitment were also rated as important factors used to select high-potential talent.  Tenure within the organization was the lowest rated factor, suggesting tenure no longer plays a significant role in most organizations.

Notifying High Potentials

There does not seem to be any consensus on whether organizations inform their employees if they have been identified as having high-potential status. More than half of the survey respondents (58%) tell employees that they have been identified as having high potential, while the rest (42%) do not.

A Formal Process to Identify High-Potential Talent

Most organizations surveyed have formal processes in place to identify high-potential talent or plan to establish a formal process in the future. More than half of the survey respondents (56%) already have a formal process to identify high-potential employees. Nearly half (48%) of those who do not currently have a formal process say they plan to start, or restart, a process to identify high-potential talent. Lack of organizational support is cited as the primary reason why organizations do not have a formal process for identifying high-potential employees.

Next Steps

It is clear that the demand for high potential is increasing, and this research study suggests that many organizations are unprepared. While every organization is unique, there are some common challenges when it comes to identifying high-potential talent. Understanding the obstacles that are preventing your organization from creating a robust and dynamic talent pipeline is the first step in meeting the future demand.

For more information on the results from the UNC Leadership Survey 2013: High-Potential Talent, click here.