While it might sound trite, competition for talent today is fierce. Trite or not, the data backs this up.
The latest monthly unemployment numbers in the U.S. pegged the unemployment rate at an astonishing 3.7%, the lowest since 1969. The leverage employees have today may be unprecedented.
While it’s often said that first-year attrition is the most expensive, that notion is incorrect. High-potential attrition is much more expensive because this group is the future lifeblood of the organization. While executive high-potential programs draw attention and budget in most organizations, a rapidly emerging challenge—and broader pool to consider—is the development of an organization’s early-in-career high-potential employees. These are the individual contributors or first-line supervisors who have the potential and motivation to rise to more senior and expanded roles in the organization.
Early-career high-potential talent is also the most likely to leave the organization. Despite the obvious risk, most organizations aren’t paying enough attention to them.
Because of this risk, i4cp’s Executive and Leader Development Exchange group, working with i4cp’s research team, recently conducted a pulse survey on the current state of early-in-career high-potential development. Here’s a synopsis of the findings and the group’s discussion that followed:
Five core reasons for early-in-career high potential development
Many organizations recognize that the struggle to retain early-in-career high-potentials is a very real issue: 52% of survey respondents (from organizations with 1,000+ employees) said they already have a development program in place and plan to continue it, while another 30% indicated they have plans to offer such a program in the next 12 months. When the latter respondents were asked for the primary reason(s) they are starting a program for early-in-career high-potentials, the reasons given fell mostly into five areas:
- We need to grow our leadership bench / pipeline, and better support succession planning.
- We need to fight an increasing attrition rate amongst this population. Supporting this is the need for stronger engagement of early-in-career high potentials and specifically a dissatisfaction amongst millennials about the lack of opportunities.
- We will benefit from the new insights and innovation that these new leaders will provide.
- We will benefit from a greater diversity in leadership.
- We are simply growing so fast that we need more mid-level leaders as soon as possible.
The first reason on this list is what is driving the desire to create an early-in-career high-potential development program at Canon USA. Christy Pines, Senior Director of Corporate Human Development, noted that Canon has already developed programs for executive development, management development, and most recently director development. But early-in-career high-potentials have not received the same attention.
“For those individuals that have high potential, what can we do to retain them, to keep them interested in our business? Both our location on Long Island, and our industry being cameras and printers, pose a challenge,” Pines said. “The struggle is most significant in the one to five, up to seven-year tenure with the company—for those that want to make a commitment to our company, we want to give them guidance on how they can grow with us.”
Effective programs are future-focused, selective, transparent, and personalized
The good news is that most organizations believe they are making progress. When asked if current early-in-career high-potential development programs in their organizations are effective at successfully preparing the candidates for the future needs of the business, 42% indicated they are to a high or very high extent, and another 48% indicated they are to a moderate extent. Further, 39% of respondents indicated that to high or very high extent their programs are focused specifically on developing capabilities the organization doesn’t currently have at the next level of leadership, but anticipate will be needed soon.
Some organizations with effective programs have a rigorous nomination and selection process, including BAE Systems, where Dave Pettit, Leadership Development Manager, leads their Catalyst program.
Says Pettit, “Over time we have learned to select delegates who are proactive and hold themselves accountable. Today’s highly-selective application process for Catalyst includes behavioral interviews with questions focused on prior learning experiences. These responses help identify applicants with openness to take risks, push beyond comfort zones and grow from experience.”
Not only is the program important, it’s popular as well. Participants regularly note how transformative it was. Given the rigor of the application process, the Catalyst program has a waiting list every year.
Having a rigorous selection process is one way to maintain a high level of transparency for program selection. 37% of survey responses indicated that to a high or very high extent they are transparent about the selection criteria for early-in-career high-potential programs, and this result is again higher (54%) amongst those indicating highly or very-highly effective programs.
Personalization of any leadership development program is a challenge, and yet 24% of survey respondents indicated that their organizations’ program is personalized for each candidate. Pines at Canon achieves the goal of personalization by having one standard class design, but then focusing on each individual’s objectives ahead of time and carrying that through the program. As Pines noted, “The focus is on the individual and what they need to get out of the experience, rather than changing the entire program for each person.”
Programs involve a wide range of development approaches
When asked to select the top five most effective development approaches used to accelerate the development of early-in-career high-potential employees, survey respondents clearly indicated that standard development approaches, including conventional in-house leadership training programs (78%) and mentoring from more senior and/or external leaders (74%) remain the foundation. External academic or leadership development programs were cited less often (29%), no doubt in part because of the increased cost that such programs usually entail.
Pines at Canon noted that while they do a lot of instructor-led training in their programs, they have started to flip the classroom by using more blended learning.
“We will assign some self-paced online content in an online format, and then bring them together for a discussion session in WebEx,” said Pines. “This virtual session might include breakout rooms where you practice coaching or feedback techniques. This approach better supports our entire employee base, which includes many that are virtual and located around the country.”
Survey respondents reported that project and assignment-centric development approaches are often effective, including involvement in high-profile projects (52%), high-profile stretch assignments (45%), and rotational assignments (36%). Coaching and exposure-centric development approaches, such as exposure to the organization’s C-suite, peer coaching, ongoing use of feedback loops, and coaching from external professionals, were each cited as a top approach by about 1 in 4 respondents. And finally, innovative but less common development approaches (cited by 12% or less of respondents) include community service opportunities, leadership of an employee resource group, opportunities to speak at conferences, and opportunities to serve on a board.
Top organizations provide ample learning and development opportunities for all employees, and many have had focused, high-potential development programs for director- and executive-level leaders in place for many years. But with a tight labor market and fierce competition for talent at all levels, more organizations find the need to do the same for early-in-career high potentials. With benefits ranging from improving retention rates to increasing leadership diversity to simply supporting current and future organizational growth, it is an investment worth making.