Get awesome marketing content related to Hiring & L&D in your inbox each week

Stay up-to-date with the latest marketing, sales, and service tips and news

Talent Assessment | 10 Min Read

The Ultimate Guide to High Potential Identification


It is a well-accepted maxim that the greatest asset of a company is its people. Employees play a critical role in driving organizational growth. The primacy of continual employee growth and development opportunities has been a chief concern for human resource professionals. Not only is continuous growth beneficial for the individual, but also in the best interest of the organization. L&D professionals often stand on opposite ends of the spectrum – the ones who believe that learning and development opportunities should be available to all, and the others who feel that special programs or attention should be accorded to high potentials of the organization for better returns. It is, therefore, essential for organizations to be future-ready, with a talent pipeline prepared to take on more senior responsibilities and face future challenges, irrespective of their stance on the subject.

While organizations expect all their employees to function to the best of their caliber, it is a generally accepted premise that an organization is driven and sustained by a select few high potential employees.   

0_Quote 1-1

Thus, identifying employees who drive the organization towards success is becoming crucial to optimize the workforce and undertake better people management. With an increasing need to continually evolve in times of rapid transformation and limited resources, identifying and developing star performers is a pressing priority for HRs and line managers.

What Does High Potential Employee Mean?

A high potential is an employee who possesses the intellect, drive, agility, and leadership orientation to successfully undertake broader and complex roles in the future. High potentials are part of the larger pool of the best talent in any organization.

HiPo employees drive the overall business performance by making significant and consistent contributions, delivering superior levels of performance while outperforming others, and exhibiting behavior and skills that align with the company’s culture and vision.

Mercer | Mettl’s High Potential Assessment Framework


How Do You Identify High Potentials?

High potentials can be identified through a process that intends to discover individuals who possess competencies essential to succeed in more evolved roles for personal and organizational advancement. The process involves a series of steps starting with a sensing exercise, identifying the right tool, finalizing the talent, creating individual development plans, and lastly, validating the results, to find employees who demonstrate a higher possibility of outperforming others in the same role and depict a differentiated leadership/role potential. 

High potential employees display not only high levels of competencies for their current role but also exhibit a high future propensity for taking up bigger responsibilities and challenges. It plays a significant role in making your workforce future-ready and helps your organization prepare to plug future talent gaps.

Major Roadblocks to HiPo Identification

To classify employees as highly capable and carry out a successful HiPo identification process, organizations typically rely on individual performance along with managers’ feedback. While these might be conventional practices, they are not without limitations.

i) Unclear Definition of a “High Potential”

Organizations often don’t focus on future competencies. Their competency framework, if at all they have one in place, usually focuses on present business requirements and fails to acknowledge the changing business landscape and the aligned future competencies. The absence of a clear definition of a HiPo employee for your organization, and it could vary based on the industry, size, etc., leads to ambiguity on which employee and what competencies qualify as a high potential. Most organizations arrive at a loosely defined competency framework based on the subjective opinions of only a handful of people within the organization. They, therefore, struggle to objectively identify specific attributes/competencies they would need their high potentials or future workforce to demonstrate. As a result, no one has a clear picture of the characteristics required for assessing the potential.

ii) Performance Versus Potential


Yet another commonly found method of identifying HiPos is evaluating the current performance. Many organizations confuse performance with potential, two concepts that are often used interchangeably but don’t always mean the same thing. While performance takes into account past accomplishments, potential, on the other hand, is forward-looking.

Considering that the expectations and demands of the future role might be starkly different from the one being performed currently, organizations can put their high performing employees in a position that might lead to unfavorable results. These results may stem from their inability to cope with the transition or the lack of skills required to excel in that particular role. While performance and potential are not mutually exclusive as potential includes elements of performance, a high performer, however, doesn’t guarantee a high potential.

Confusing performance and potential can be an expensive miss for an organization, pushing high potential employees to look for alternative roles or even switch jobs, due to the absence of challenging roles and associated recognition or placing high-performers in positions they might not be equipped to handle.

iii) Assessing Candidates Subjectively

Organizations often rely on the manager’s feedback to assess an individual’s performance for appraisals and promotion-based decisions. That this practice is mostly subjective, prone to bias and can be detrimental to the process of high potential identification is well-known. Relying solely on the manager’s feedback means that candidates are being nominated for subjective reasons rather than scientifically-validated results based on using standardized tools. 

The convergence of these factors has left many organizations struggling while designing a successful strategy for high potential identification for organizational planning and talent development.

The Need for High Potential Employee Identification

Regularly assessing your internal talent pool is critical for better people management. While some people may argue that new talent can be recruited for the same position for which an existing employee can be trained, it often comes with the caveat that a recruit would take more time to attune to the needs of the business, before he/she can be productive to the best of his/her capability. From an organizational perspective, recruitment is always more expensive than development. 

HiPo Identification, Succession Planning, Leadership Development, and Training Need Identification go hand-in-hand with the broader construct of future readiness. While the objectives may differ based on the organizational requirement at a given time, all of them stem from the same need, which is the identification of a talent pool and deployment of developmental interventions to ensure organizational success in the longer run.

High potential employees prefer to be challenged at the workplace and are often aware that they are outperforming their peers. Often, acknowledging their contribution in one way or the other – providing them better learning opportunities, promoting or appraising them, placing them in strategic or more challenging roles, training them to be future leaders, etc. – can help retain these individuals.

High potentials make sizable contributions to the present and future success of the organization. Therefore, organizations must ensure that they nurture and utilize this talent pool appropriately.

i) Build a High Potential Talent Pool

Investing in your high potentials can help you build a talent pipeline when faced with a loss of talent owing to attrition, retirement, or any other such issues. A high potential talent pool can be accessed on a need basis to fill a critical business position, create a new business unit or team, consider employees for leadership pipeline, or carry out succession planning. 

ii) Develop High Potential Employees

HiPo identification provides organizations the opportunity to develop their HiPo employees by placing them in advanced developmental programs to prepare them for future roles, expose them to better opportunities, put them on fast-track training programs, or assign them to special assignments that provide advanced growth opportunities.

iii) Retain High Potential Employees 

When performance is the only criteria employees are evaluated on, high performers will be the only ones moving up - and your high potentials will be moving out.

Brian Kight
Director of Performance at Focus 3

With attrition being one of the most prominent challenges confronted by organizations, losing a high potential employee can be a significant setback for any organization. High potential identification provides organizations with objective data to focus their efforts on retaining the right people.

By engaging high potential employees, organizations acknowledge their need for achievement and advancement, giving them a reason to stay in their current organization.

iv) Reward High Potential Employees

Promotions and appraisals are powerful tools to reward high potential employees and keep them motivated. Traditionally, performance has been the central focus of appraisals. While performance has and should always be rewarded, identifying and rewarding potential is equally critical. Potential data serves as an enabler to better people’s decisions. Since high potential employees are often driven, agile and ambitious individuals, promotions become an extremely important tool to ensure that they are motivated to work to the best of their ability, delivering consistent results. The addition of potential to already existing performance parameters, thus, allows you to make appraisal decisions objectively and accurately.

Tools to Measure HiPo Employees

With the focus shifting on combining potential and performance, conventional methods are giving way to more dynamic ones. High potential employee identification is an essential component of the shifting global work environment filled with new challenges and uncertainties. 

These high potential identification tools are designed considering the present business environment. While high potential identification is often carried out for select employees based on seniority, these highly flexible and customized tools allow your organization to implement HiPo identification at scale across all employee levels (frontline and managers) timely and cost-efficiently.

Assessment & Development Centers (ACDC)

Assessment and development centers combine roleplays, situational judgment tests, presentations, group discussions, interviews, simulations, psychometric and aptitude tests, and other such techniques to make critical people decisions, like match an employee to a particular role or for employee development purposes. This allows assessors to objectively evaluate candidates in situations that imitate real-life workplace scenarios and observe skills and behaviors specific to the defined competencies.

ACDCs can be undertaken in the following ways:

0_Virtual ACDC-1

Virtual ACDC

A complete suite of online programs that simulate traditional ACDCs for a holistic understanding of employees, they are time and cost-efficient without any logistical hassles. The biggest USP of virtual ACDCs is their instant and automated reports, along with reduced overhead expenses. These are best suited for mid-level managers and individual contributors.

0_Traditional ACDC

Traditional ACDC

Conducted in an offline setting with a dedicated team of assessors, traditional ACDCs are on the decline because of high cost, complex logistics, and the time taken in implementation and obtaining results. 

0_Blended ACDC-1

Blended ACDC

A better alternative for traditional assessment centers – blended ACDCs combine the best of technology and human touch by bringing together on-field programs and online assessments for an integrated approach to talent management. These are best suited for mid to senior-level leadership profiles.

360-Degree Feedback

A holistic process where an employee’s superiors, peers, direct reports, and, sometimes, even customers, evaluate an individual’s performance and potential. 360-degree feedback tools are often used for performance appraisals and promotions. They can, however, be adapted to look at potential as one of the metrics, through additional indicators of potential on which stakeholders evaluate employees.

Assessment Battery

A comprehensive battery of assessments can quickly help organizations zero in on their high potential employees by evaluating employees on their personality and ability. Best suited for entry-level employees and first-time managers, the assessment battery can be used as part of advanced tools for a holistic understanding of an employee’s potential.


High potential identification contributes heavily to the future readiness of organizations and hence is critical to the overall organizational strategy. Identifying, developing, and retaining future potentials can significantly add to an organization’s capacity to cope up with a transition in the present and future. High potential identification needs to be driven by a comprehensive view of performance while taking into account an extensive understanding of a person’s future role in the organization.

With skillsets, roles, and technology becoming obsolete in less than three years, businesses realize the significance of high potential employees in a Volatile, Uncertain, Complex and Ambiguous (VUCA) world. The current war on talent due to the shortage of skills adds more weight to the importance of high potential identification of existing employees. The right strategy, tools, processes, and partners can help organizations to identify untapped potential and make high potential identification an indispensable part of their business strategy.

How Mercer | Mettl Can Help?

Mercer | Mettl’s solution for high potential identification helps organizations to accurately recognize high potentials through a structured process:

0_Sensing Exercise

Sensing Exercise

A sensing exercise is the first step towards a coherent high potential identification process. It involves understanding the building blocks of the program, the roles, the levels, and the competencies under consideration. 

Mercer | Mettl handholds organizations by interacting with key stakeholders vested in the high potential identification process. Focused group discussions and visionary workshops are integral to the sensing exercise to identify essential competencies and tool composition.

0_Employee Evaluation

Employee Evaluation

Once competencies have been identified, our suite of tools is best matched to the organization’s complexity and cost requirements. Mercer | Mettl’s customizable and scalable tools, namely virtual and blended assessment and development centers, 360-degree feedback, and a comprehensive battery of assessments, etc. can be used independently or in conjunction to identify untapped potential.

0_Talent Pool Finalization

Talent Pool Finalization

Mercer | Mettl’s swift and automated reports help organizations identify the accelerated talent pool, initiate talent mobility, and implement developmental strategies.

0_Organizational _ Individual Developmental Plans

Organizational & Individual Developmental Plans 

Given that potential cannot be equated with readiness, the organization must invest in developmental initiatives through Individual & Organizational Development Plans (IDPs/ODPs) for the identified pool to equip them to take on future roles and responsibilities. Mercer | Mettl provides organizations with ODPs that pronounce the way forward and IDPs that help bridge the gaps obtained from employee evaluations. 

0_Result Validation

Result Validation

Mercer | Mettl’s end-to-end solution for high potential identification of employees helps organizations validate results through predictive modeling and correlation exercises.

The process of HiPo identification can be different for different organizations, just like the meaning of HiPo. Organizations need to undertake a two-fold approach for HiPo identification programs – one that enables them to reflect inwardly for their business vision and goals and the second that accounts for the business environment.

Why Choose Us?

Mercer | Mettl’s high potential solution is scalable. It can be customized for all levels of your employees throughout their employee life-cycle, starting from frontline employees to managers and other senior positions.

With a variety of tools to offer, Mercer | Mettl designs quality assessment solutions tailored to your organization’s needs of complexity that are quick, reliable, and cost-effective.

Mercer | Mettl’s deep analytical rigor and specialized expertise come together to provide every organization with a developmental plan for its current and future needs.

Originally published April 9 2020, Updated June 24 2020

Bhuvi Kathpalia

Written by

Bhuvi is a content marketer at Mercer | Mettl. She's helped various brands find their voice through insightful thought pieces and engaging content. When not scandalizing people with her stories, you’ll find her challenging gender norms, dancing to her own tune, and crusading through life, laughing.

Would you like to comment?


Please write a comment before submitting


Thanks for submitting the comment. We’ll post the comment once its verified.

Related posts

Get awesome marketing content related to Hiring & L&D in your inbox each week

Stay up-to-date with the latest marketing, sales, and service tips and news