High potentials vs high performers – which should HR focus on? (and how to spot each type)

What’s the difference between a high potential employee and a high performing one? Huntly founder, Sergiy Ovcharenko, gives his take, and why one is better than the other:

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Nov 22, 2023

Much as HR likes to think it’s there to support and guide ‘all’ talent (after all, why would these people be hired if they didn’t have skills that bring value to the business?), it’s a fact of life that all organizations also have their exceptional top talent – the people that rise to the top, the people that make a bigger than usual contribution to projects/performance of the business.

These are each company’s “rock stars“, their “tech wizards,” or their “game changers.” All are words frequently used to describe these people.

They are individuals who excel at their tasks and elevate entire teams. Their commitment propels them to strive for unparalleled achievements. They magnify their value and diving deep into problems and come up with solutions.

But how do these people really differ from other performing potentials?

And do these people deserve the lion’s share of HR’s attention, to be nurtured at the expense of others?

High Potential (HiPo) employees

When a select fraction of employees tend to drive a majority share of results, these people often defined as the HiPo – or High-Potential employee.

According to Gartner, HiPos are individuals within an organization who possess the ability, engagement, and aspiration to ascend and to excel in senior, critical positions.

A HiPo isn’t merely a good performer but a beacon of aspiration, capability, and passion.

They possess the potential to both ascend the corporate ladder and dramatically amplify value.

Studies suggest that certain HiPos can bolster productivity levels up to 400% above the average.

With HiPo individuals, companies don’t just scale heights; they set new benchmarks.

Why retaining HiPo employees matters

 We all know that losing staff comes with a high cost to employer.

But with HiPo employees, this loss is more acute. In the first place, businesses will lose out from not having a HiPo on their team are much greater.

But according to analysis by The Dream Collective, the loss of a HiPo can cost up to $200,000. Why? New employees simply aren’t as productive as the person they replace, and it might take a year or two to reach that level.

Distinguishing High Potential (HiPo) employees from High Performance employees

On paper, HiPo employees seem to identify themselves, however, life is not always so simple, and for CHROs, it’s pivotal they differentiate between “High potential” and “High performance” employees.

For while all HiPos inherently exhibit high performance, not all high performers necessarily harbor high potential.

Here’s a breakdown of what you need to look out for:

1) Focus on timeframes:

The High-Performer:

Tend to focuses on the immediate tasks and responsibilities of their current role.

The HiPo employee:

Besides everyday tasks, they actively work toward future growth and are ready to take on more significant responsibilities.

2) Skillsets:

The High-Performer:

Excels at their job and is an expert in their domain.

The HiPo employee:

Skills aren’t confined to just technical expertise. These people demonstrate a proactive approach to communication, process development, and problem-solving.

3) Outcome orientation:

The High-Performer:

Aims to complete current tasks and requires consistent feedback on the work done.

The HiPo employee:

Sees hidden opportunities and is ready to invest time and effort into prospects. Doesn’t consider the current result to be the sole marker of success.

4) Planning:

The High-Performer:

Prioritizes short-term goals and achievements. “Here and now” is their central working ethos.

The HiPo employee:

Views current tasks as part of the preparation for new, significant milestones.

5) Risk Appetite:

The High-Performer:

Stability is the primary criterion for success.

The HiPo employee:

Sees stepping out of the comfort zone as an opportunity for growth.

6) KPI Evaluation:

The High-Performer:

Reviews results based on clearly defined metrics and outcomes.

The HiPo employee:

Has a holistic view and requires a more comprehensive approach for evaluating outcomes.

Capitalizing on the HiPo edge

Data from Gartner reveals HiPos contribute disproportionately to a company’s trajectory, often outperforming peers substantially. They are individuals who not only effectively handle current business tasks but also unlock significant growth potential. Studies by PWC show that HiPo employees contribute up to 93% of a company’s total revenue and put in an average of 21% more effort than their peers.

For teams in place, refining evaluation metrics is the game-changer:

  1. Productivity. HiPo individuals always aim to exceed expectations and set the highest goals for themselves. Check reports and converse with those who consistently achieve high results.
  2. Leadership potential. For HiPo, a position is merely a formality. They go beyond their designated authority to improve processes and outcomes. So focus on those who don’t view their job solely as selling their time and skills.
  3. Agility. A thirst for new challenges and knowledge signals you’re dealing with a HiPo. Evaluate who always responds to development opportunities.
  4. Innovation and versatility. HiPo individuals suggest process improvements and seek new solutions for regular problems. Also, pay attention to those who have achieved the desired goals in different positions or departments.
  5. Manager feedback and colleague affinity. HiPo individuals are always at the forefront and inspire the team. Find out who has earned respect at all levels in your company, and start investing in their development.

Recruiting HiPo individuals and helping them fully realize their potential is what differentiates market leaders from other players.

To stay ahead, it’s crucial to invest in people capable of executing the boldest professional visions.