Developing high-potential employees

High-potential employees, or HiPos, are not just top performers. They are people who can help shape an organization's future. They expect opportunities to grow, recognition for their impact, and personalized leadership development that feels meaningful and aligned with their goals.

When organizations fall short in identifying and nurturing this talent, their leadership pipelines and retention can suffer. Developing HiPos is therefore both an individual development priority and an investment in the organization's future leadership.

This guide explores how to:

• Accurately identify and develop high-potential employees.
• Avoid the common pitfalls of HiPo programs.
• Deliver personalized, useful development opportunities that give talented people reasons to stay and grow.

Retaining HiPos is not about a quick fix. It requires rethinking leadership development and building a culture of growth that connects people's aspirations with organizational goals.

High-potential employees display the motivation, ability, and organizational commitment to rise to and succeed in senior positions. Technical expertise matters, but potential also includes the capacity to grow into a different kind of contribution.

1. Strategic insight

   HiPos seek new challenges, feedback, and experiences. They can process and apply new information to make an impact on their immediate team or the broader organization.

2. Inspiration

   HiPos connect deeply with others, using emotional intelligence to inspire colleagues and foster high performance across their teams.

3. Results orientation

   HiPos have mastered the technical skills their current jobs require while showing potential to expand the interpersonal skills they will need as leaders.

4. Collaboration

   HiPos are team players who value diverse perspectives and prioritize collective wins over individual achievements. Their contribution includes helping other people succeed.

5. Integrity

   Future leaders need ethics and authenticity. HiPos demonstrate these qualities by upholding organizational values and inspiring trust.

The original guide cites research reporting that HiPos brought 91% more value to their organizations and worked 21% harder than their peers, while only one in seven employees was identified as high-potential. These are historical research findings cited by the guide, not a formula for assessing any individual employee or a promised Torch outcome.

The practical implication is to identify and nurture potential deliberately, rather than assume today's highest technical performer will automatically become tomorrow's strongest leader.

Sources linked in the original guide: Gartner's 2019 workforce research; Human Capital Institute, How to Accelerate Leadership Development.

Identifying potential is a challenge even for organizations that invest heavily in it. The original guide cites Gartner research finding that more than two-thirds of organizations focused their HiPo development efforts on the wrong employees. Misidentification can direct scarce time and resources away from people who could thrive with the right development.

There is also a retention cost when promising employees are overlooked. The guide cites historical estimates of direct replacement costs reaching 50% to 60% of annual salary. Its illustrative calculation puts replacement of an employee earning $90,000 at $45,000 to $54,000, compared with a cited average development investment of $4,000 per individual. These are the source's historical estimates, not current pricing or a prediction of your replacement costs.

A useful identification process is simple, evidence-informed, and responsive to change. It recognizes potential in the context of your business rather than relying only on intuition.

Simplicity

Keep the process straightforward and scalable. Consider evidence about engagement, collaboration, and learning patterns. Be transparent about the behaviors and measures you value so employees understand how they can grow and succeed.

Common pitfalls

Overly complex, time-consuming processes, including cumbersome nine-box calibrations, can be difficult to apply at scale. When assessment requires too much time, organizations may consider only general managers or a handful of visible employees, overlooking potential elsewhere.

Data-informed decisions

Manager assessments can be affected by favoritism, inaccurate benchmarks, or assumptions about experience. Analytics can help surface overlooked potential, particularly among emerging talent, but still require scrutiny for bias. Define potential through aspiration, ability, and commitment, not tenure alone.

Common pitfalls

The guide cites research suggesting that subjective assessments can misplace up to 70% of people. Relying on perceived experience may overlook early-career employees with leadership potential. Data can inform a fairer process; it does not automatically guarantee fairness or accuracy.

Agility

Talent identification is not a one-time exercise. Build a continuous feedback loop that captures insights throughout the year and responds to changing business needs and employee circumstances.

Common pitfalls

Annual or less frequent assessments can lag behind changes in talent needs, business conditions, and leaders' personal circumstances. The guide cites research describing an average organizational tenure of 28 months for the high-potential population studied, reinforcing the case for regular reassessment rather than waiting for the next annual cycle.

Sources linked in the original guide: CEB's 2014 high-potential employee research; Harvard Business Review, How to Keep Your Top Talent (2010); SHRM, Retaining Talent; DDI, Global Leadership Forecast 2018; Harvard Business Review, Why Top Young Managers Are in a Nonstop Job Hunt (2012).

Investment alone does not make a high-potential program successful. The original guide cites research in which two-thirds of leaders allocated funds to HiPo programs, but only 25% of programs were deemed successful. It identifies three recurring weaknesses: a lack of continuity, insufficient support, and one-size-fits-all development.

1. They lack continuity

   Leadership development is not a one-and-done exercise. Episodic training and fragmented opportunities can leave HiPos without the consistency they need to grow. The guide cites research reporting that 95% of organizations failed to follow through on development commitments. The underlying risk is a poor learning experience and diminishing engagement when promised development does not materialize.

2. There is no built-in support

   Programs can overlook the importance of guidance and feedback. Without accessible peers or coaches, HiPos may be left to navigate challenges alone. The guide cites research reporting that more than half of employees dropped out of HiPo programs because they lacked adequate support.

3. They are one-size-fits-all

   Generic programs fail to address individual needs, contexts, and goals. Development needs to feel relevant. Off-the-shelf experiences can leave employees disengaged or looking for opportunities that better match their aspirations.

A lack of development opportunities is one reason employees leave. These program weaknesses are addressable: identify the gaps in continuity, support, and personalization, then design a practical response to each.

Sources linked in the original guide: Gartner's high-potential employee research; SHL's high-potential ebook (cited in the original guide); SHL's high-potential research and development resources; ClearCompany, Engaging the HiPo: Handle with Care (cited in the original guide); Harvard Business Review's 2012 research on young managers. The percentages above describe research cited by the original guide, not a current audit of all development programs.

A useful HiPo program helps talented people develop in ways that matter to their work while building the organization's future leadership pipeline. Start with three design principles.

Create continuity

Avoid stop-and-go learning. Provide continuous opportunities such as guided on-the-job learning, bite-sized accessible content, and peer support. These help people maintain momentum between formal development activities.

Provide hands-on support

Build a support network of peers and coaches so participants have resources to navigate challenges, discuss decisions, and sustain motivation.

Offer a personalized experience

Align development with each employee's strengths, goals, and business context. The guide recommends an integrated learning experience combining guided and experiential learning, goal setting, and ongoing feedback.

How coaching supports these principles

Leadership coaching can complement skill development and create a foundation for succession planning. Its contribution is not simply another training event:

• Continuity: Regular goal tracking and scheduled sessions provide structure for growth and preparation for leadership responsibilities.
• Support: A coach can act as a sounding board, helping a HiPo work through challenges and decisions.
• Personalization: Coaching focuses on the individual's goals, growth areas, work context, and upcoming leadership transitions.

The guide identifies coaching as an unmet development need for many HiPos, citing Harvard Business Review's research on young managers. Program design should make this support usable and connected to work, not simply available in theory.

Coaching is a development-focused relationship in which a specially trained coach supports a client in working toward goals and developing their potential. It can help HiPos contribute in their current roles and prepare for future leadership responsibilities.

Benefits for HiPos

The original guide draws on research summarized by the Institute of Coaching. In the studies cited, 80% of people receiving coaching reported increased self-confidence, and more than 70% reported improved work performance, relationships, or communication skills.

Benefits for organizations

The guide also discusses the potential for individual development to benefit the organization:

• A cited study of executive coaching as a transfer-of-training tool reported a productivity increase of up to 88% when coaching included goal setting and feedback. This is a finding from a particular research setting, not a general productivity guarantee.
• The Institute of Coaching research summary cited by the guide reports that 86% of companies recouped their coaching investment and more.
• The guide connects strong coaching cultures with employee engagement, an important consideration for retention.

These historical findings provide context for a business case. They should not replace measurement of your own population, program design, costs, and outcomes.

Sources linked in the original guide: Institute of Coaching, Coaching Benefits; Executive Coaching as a Transfer of Training Tool: Effects on Productivity in a Public Agency; CNBC's 2019 report on employees with mentors. Mentoring findings are not interchangeable with coaching outcomes.

Succession planning is often treated as a reaction to retirement or an unexpected departure. A stronger approach invests in high-potential employees before a critical role opens, helping them prepare for future responsibilities.

Coaching can develop leadership capacities as well as specific skills. Think of capacities as a leader's core operating system: deeper, more durable abilities that support adaptability. Skills are more task-specific; mindsets shape how leaders approach learning and challenges. Development benefits from connecting all three.

For example:

• If a high-potential leader struggles to engage a team, coaching can help develop the emotional intelligence needed to build stronger relationships.
• If a new manager must adapt to a rapidly changing project, coaching can support learning agility and the ability to change course.

When to incorporate coaching

The guide recommends introducing coaching when high-potential employees are first identified for leadership tracks. Early support gives them time to develop the skills and capacities they will need for the next step.

Revisit coaching at important moments:

• Role transitions: Emerging leaders face new responsibilities and expectations. Coaching can provide a steady source of support as they develop the adaptability and resilience their expanded roles require.
• Organizational transitions: Retirements, mergers, and restructurings introduce new challenges. Coaching can help leaders work through the demands of change in their actual context.

Related reading linked in the original guide: The Power of Moments That Matter: A Strategic Approach to Coaching.

Leaders at different stages need different kinds of support. Prioritizing the right populations and moments can help development benefit not only the participant, but also the teams they lead.

HiPos and individual contributors

Moving into leadership for the first time can bring excitement and uncertainty. Early coaching can support delegation and the development of a leadership identity. It also helps people shift from an execution-focused mindset to a people-centered one: inspiring and guiding a team rather than concentrating only on personal contribution.

Managers

Managers sit between senior leadership and frontline employees. Coaching can help them build capabilities for more advanced roles, especially during promotions, stretch assignments, or new projects that require new skills and introduce uncertainty.

Executives

Senior leaders need strategic vision, adaptability, and the ability to navigate complex stakeholder relationships and expectations. Coaching can support both the transition into an executive role and the demands of organizational change.

1:1 coaching

One-on-one development focuses on a leader's strengths, growth areas, and challenges. Its uses include:

• Customized development: Setting personalized goals and working through real-time challenges in the coaching relationship.
• Focused skill building: Developing emotional intelligence, delegation, and strategic thinking.
• Readiness for transitions: Preparing for promotions and expanded responsibilities.

The original guide describes a confidential setting. Confirm confidentiality and reporting arrangements for the particular program rather than assuming identical terms in every engagement.

Group coaching

Group coaching brings leaders together to share experience, learn collaboratively, and build connections. It can provide:

• Peer learning: Insight into others' challenges and successes, alongside collaboration and camaraderie.
• A supportive community: Networks across the organization that can support leaders beyond a single session.

Choose formats in relation to the leadership transition and organizational goal. Individual and group approaches can serve different, complementary needs in a succession strategy.

Related reading linked in the original guide: How Does the Coaching Ripple Effect Transform Individuals, Teams, and Organizations?

A succession plan is not only about filling roles. It is about preparing leaders who can move the organization forward. Use these questions to review your current approach.

1. How well do we identify and support HiPos early in their careers?

   • Are we equipping them with leadership skills and capacities through coaching and development programs?
   • Do they have opportunities to move from execution-focused roles into people-centered leadership?

2. Where in the leadership journey could coaching have the greatest impact?

   • Are we using coaching during important role transitions?
   • Are we providing support during organizational changes?

3. Which populations need which format?

   • Who would benefit most from 1:1 coaching, and who would benefit from additional group coaching?
   • Are we addressing individual challenges through personalized leadership coaching?
   • Are we fostering peer learning and collaboration through group coaching for new leaders or teams?

Even well-intentioned organizations can miss the mark in how they identify and develop high-potential employees. The opportunity is to improve the process: recognize potential earlier, provide continuous and relevant support, and connect development with future leadership needs.

Torch's contextual coaching approach connects leadership development with the work and challenges leaders face. The guide describes using 1:1 and group coaching to help HiPos, managers, and executives develop the capacities to adapt, collaborate, and lead through change.

Use the frameworks and reflection questions in this guide to examine your own pipeline. A conversation about succession should connect individual growth, the leadership roles ahead, and the practical support people need to prepare for them.