Many of the elements of a HIPO compensation strategy are like your company’s overall compensation approach. In addition, they include robust measures that address current performance, future potential and talent fit for the organization’s strategic direction and cultural values. These programs reward and promote employees who exhibit the desired behaviors and serve as role models for others. Instead, more businesses are rethinking their HIPO compensation programs to favor engagement and alignment with key strategic goals. This plain vanilla approach may not be enough for future leaders and high potentials. But too often these programs rely exclusively on traditional compensation models designed to Attract, Retain and Motivate (ARM) employees. Many companies have programs in place to reduce turnover, especially for their top performers. To combat turnover and prevent employees from leaving, Mercer reports the two most prevalent employer practices are continuous compensation reviews and regularly looking at engagement. Although employers have little input when their employees leave for personal reasons or to pursue an entirely new career, they do have control over what they pay them and how they support growth opportunities.Įmployees surveyed by Mercer gave the following reasons for their decision to leave: This turnover stat reflects s 15% voluntary, 6% involuntary, and 1% retirement rate. companies had an average turnover rate of 22%. Turnover Takes a TollĪccording to the 2019 Mercer Turnover Survey, U.S. Not only do companies lose their investment in training and development for HIPOs to another employer, they also incur costs to recruit, hire, onboard and train a new employee at many times more than base compensation. If they choose to leave, these ambitious and motivated employees are difficult and costly to replace. Still, at the same time organizations are mentoring and coaching their high potentials, recruiters have your top performers squarely in their sights for their own critical positions. Likewise, employers who cultivate high potentials by creating structured learning environments that also support their business strategies build competitive advantage. Training and development are equally valued by high potentials. Rewarding high potentials for their development and accomplishments.Īs these priorities make clear, high-potential employees require much more than higher compensation to succeed in the workplace.

Expanding HIPO skills with new growth opportunities and experiences, and.

Building a pipeline of talent to fill future company leadership positions,.

High potential employee compensation programs typically share these priorities: Researchers from MIT and Harvard have found that companies can consistently identify 3-5% of their workforce as HIPOs.

To tap into this talent pool, many companies invest in High Potential Employee (HIPO) compensation programs to develop and retain their most promising future leaders. Identifying the right talent for your organization’s long-term success is a business imperative.

Hipo employees