The interview was difficult, but the job candidate from the city of Wuhan in China quickly demonstrated why she had been identified as a “high-potential finance professional”.
The CFO of an Italian automotive manufacturer flew to China to meet the candidate. A language barrier made communicating a challenge — although the candidate spoke English, the global CFO’s ability to speak the language was limited.
But the candidate wasn’t fazed. She had already demonstrated her business acumen, as she had increased the number of manufacturing sites she was responsible for from one to three.
During the interview, which took place a few years ago, she displayed her can-do attitude and interpersonal skills by using body language to connect with the CFO. She made sure she understood questions and answered them despite the language barrier.
“She’s still with the company,” said David Wu, CPA, CGMA, who observed the interview and is general manager and managing director of executive search and HR advisory firm GMP Talent in Shanghai. “She spent a year and a half in Italy, and now she’s the CFO of one of the company’s manufacturing plants in China.”
During the past few years, as the pace and complexity of change has increased in many organisations, the bar for top talent has been raised to those who can think, act and adapt most quickly.
Identifying, recruiting, retaining and developing high-potential employees such as the candidate from Wuhan is critical for businesses — especially at a time when leadership talent is scarce.
HUNTING FOR POTENTIAL
Building the next generation of high performers starts with finding potential, which doesn’t necessarily mean finding someone who is a high performer in his or her current position. “Seventy per cent of high performers are actually not high potential [for new jobs],” Wu said. “Many times they have already reached their ceiling. If you have been a good finance manager for 20 years and you are doing well, it doesn’t mean you are ready to be a CFO in the next two years.”
High performers who are content in their current jobs and don’t aspire to develop new skills or leave their comfort zone may not possess high potential for new positions, Wu explained. High-potential candidates possess more of what Wu calls “learning agility” — the desire and ability to learn and adapt quickly to new situations.
For example, the CFO candidate for the Italian automaker displayed learning agility by adding responsibility for additional manufacturing sites to her curriculum vitae (CV) and by connecting with the global CFO despite the language barrier.
Alongside an aptitude “for learning on the fly”, high potentials typically have strong relationships with their bosses and peers and are able to build strong teams of competent direct reports, according to Wu. They have a can-do attitude and business acumen that contributes to strategy development, and they are problem-solvers. Wu said they also possess integrity, can be trusted and display interpersonal savvy.
Once a company identifies high-potential candidates, recruiting them usually involves more thought than simply thrusting an attractive compensation package in their direction. Wu said the following questions, ranked in order, are cited as most important by high-potential employees in China when they are considering a new job:
- Is this position a good platform upon which to develop their career?
- Are there training and learning opportunities?
- Who will be their boss, what is their management style, and what is the company culture?
- What is the financial package?
- Is there work/life balance?
- Where is the job located?
Companies that provide the best answers to these questions are more likely to add high-potential recruits to their payroll. Once these recruits are hired, getting them to perform and fulfil expectations is seldom difficult, according to Wu.
He said that in his experience, about 90% of high-potential employees become high performers. The 10% who don’t become high performers usually fall short because they have been placed in a position that doesn’t suit them.
DEVELOPING HIGH PERFORMERS
Barbara Bowes, president of HR consulting company Legacy Bowes in Winnipeg, Manitoba, Canada, explained that the first step in developing high performers is to make sure they are aware of their ability. She uses an assessment tool called a MERIT profile that helps them identify their score using ten elements of character and behaviour to establish that awareness.
Then Bowes focuses on helping them develop “more generalist” skills, as opposed to technical skills. “This can be accomplished through formal training, but also through stretch assignments such as leading a project,” she said.
Employees develop leadership skills and make progress in their careers when they tackle tasks outside their traditional areas and comfort zones, according to a CGMA report, The Fast Track to Leadership. Bowes said it’s also important to look to all hierarchical levels to uncover potential gems.
“One of my most proud moments was to see a high-performing shop floor worker whom I had identified during a workshop session return to school and earn a degree and several designations,” Bowes said. “Within approximately ten years, this individual became the vice president of human resources for her large corporate firm.”
The only bad thing about having high-performing and high-potential employees is that other companies want them, too. According to Wu, companies can use many tactics, in addition to providing financial rewards and recognition, to keep their best employees from leaving.
First, supervisors can help employees plan their career development with the company. In China, Wu explained, it’s common for employees to ask for a plan for their next three to five years with the company. But in other places, he said, a line manager might question the commitment and stability of an employee or job candidate who makes such a request. Nonetheless, a career development plan can be a powerful retention tool.
Other global retention tactics described by Wu include:
- Make their assignments challenging. When you set up the key performance indicators, set stretch goals and assign some challenging tasks so they can learn.
- Provide timely on-the-job coaching and mentoring. This could come from somebody in a senior position with deep knowledge about the company, in addition to the direct line manager.
- Enrol them in a learning and development program. While this might aid retention, Wu said that about 10% of learning is done in the classroom, 20% comes from the direct line manager, and 70% comes through “learning on the job” and applying skills to tasks.
- Offer flexible hours and working locations. This can be especially important for workers with families as companies leverage technology to accommodate families’ needs. Wu said the practice is less common in China than in some other places.
Frequent salary and performance reviews also underpin core retention strategies in China, and typically take place on a quarterly basis, according to Wu.
OVERCOMING WORKFORCE FRUSTRATIONS
High performers can become frustrated as businesses fail to properly manage their talent. Forty-three per cent of senior executives said their organisations are missing financial targets because of inadequate human capital management, according to a global survey described in the CGMA report Talent Pipeline Draining Growth.
In many parts of the world, the past five years have hit high performers as hard as their colleagues — just in different ways. So even if high performers have been spared the layoffs that struck their less fortunate colleagues, many have been forced to take on additional responsibilities as companies have tried to force efficiencies.
Cutbacks and overburdening take a heavy toll on high performers and can reduce their loyalty to the company. And when the job market gets better, high performers have more opportunities to leave. Losing these top employees can be devastating to a company. Particularly in the current climate of complexity and global uncertainty, having a stable “human dimension” — with an entrenched, high-performing staff — can provide companies with a competitive advantage.
High-potential and high-performing employees understand that career progression and promotion opportunities are limited during difficult financial times. They are the ones who look toward the future rather than complaining, despite their frustrations, according to Bowes. Instead, they ask what they can learn during difficult times that will help them in their career, and take advantage of new learning opportunities within their organisations. They might return to school at night or volunteer for new projects.
“The key is, they never stop learning,” Bowes said. “They step up and take leadership within their company.”
Through analysis of more than 20,000 employees across more than 40 organisations globally, the Corporate Executive Board identified ten competencies that set high performers apart from their co-workers.
- Ability to prioritise.
- Working well in teams.
- Organisational awareness.
- Effective problem-solving.
- Ability to influence.
- Effective decision-making.
- Learning agility.
- Technical savvy.
5 TIPS TO MANAGE TOP TALENT
As companies’ situations improve, HR adviser David Wu suggests employers look to incorporate the following methods to cool any simmering frustrations among high performers:
1. Simplify. As strategies change, so too should responsibilities, focusing on the most urgent and important tasks. “What I’ve seen some companies do is adjust their forecast for the year. Then they re-set the KPI so the person is not overly stressed or overly burdened,” Wu said.
2.Unplug. Cut down on the unnecessary email that’s jamming the employee’s inbox, and cancel all but the most important meetings.
3. Recognise. Praise from a manager can be just as effective as financial compensation.
4. Compensate. If the high performer excels even with the additional workload, increase his or her pay.
5. Recharge. When the market gets better, reward top employees with extra time off.