How to Develop High-Potential (HIPO) Employees

By Plum

Blog Home

Engaging high-potential employees (HIPOs) is critical to business success. After all, between 50 and 70 percent of organizations feel they are impacted by a shortage of qualified leaders.

A mission critical task for many organizations is to identify HIPO employees early in their career, in order to take the necessary action to retain them before they move on to another organization. HIPOs in general understand their high capacity potential, and therefore crave growth opportunities like stretch assignments and personalized learning & development and young HIPOs even more so. After all, Millennials crave development more than any other generation. Needless to say, professional development is critical to engaging HIPO talent especially young HIPO talent.

In our previous two blog posts in this professional development essential guide, we provided a primer to distributing development and feedback to your team or workforce. Professional development of HIPOs, however, may require a separate approach, in that these employees may have different desires or needs from their development programs than employees who are not classified as HIPO.

As with the previous chapters in this series, this blog post was written in collaboration with I/O Psychology Masters students at Central Michigan University. We’ll be taking an I/O Psychology approach to understanding how to provide effective development for your HIPO employees.

But first, let’s dig into how we’re defining HIPO, and how that definition may influence your learning & development plans.

Who are High-Potential Employees?

High-potential employees (HIPOs) have been defined as employees who contribute the most to the organization, resulting in providing the organization a competitive advantage. Any employee at any level within an organization can be identified as a HIPO.

HIPOs can be classified as either early-stage or late-stage, each requiring a unique developmental approach. Early-stage HIPOs are usually near the beginning of their career. These employees are in the lower ranks of the organization and are classified as HIPO because of their perceived talent, not their track record.

In comparison, late-stage HIPOs are experienced senior managers who may be executives. Late-stage HIPOs will typically have had various experiences with professional development programs and are known for their track records.

A way for organizations to capitalize on the advantages provided by HIPOs is to consider the following practices:

What are the Benefits of HIPO Professional Development?

HIPOs sometimes act as interesting challenges to organizations, due to their high rate of turnover. Furthermore, a HIPO employee is not necessarily an engaged employee.

HIPO professional development is particularly important because it can have various positive outcomes for organizations, including:



There are specific professional development strategies and methods that may be beneficial to HIPOs, including, but not limited to: coaching & mentoring, and leadership development.

Providing Development: Coaching and Mentoring

Because of their stellar performance, HIPOs can frequently move up quickly within an organization before learning the necessary information in each position. Coaching and mentoring may help HIPOs acquire valuable job-related information. Furthermore, mentors and coaches may serve as good role models, motivating HIPOs to obtain valuable knowledge to promote a successful career. Some other beneficial uses of coaching and mentoring programs for HIPOs include:

This variety of potential uses of coaching and mentoring programs within the context of HIPOs provide support for their worth. Indeed, coaching and mentoring programs may be crucial to the development of HIPOs who remain committed and engaged, and continuously learn and progress within the organization.

Providing Development: Leadership Development

Leadership Development is related to HIPO professional development in that it focuses on developing stronger skills and abilities, although this specific area focuses on increasing leadership ability and relationships with subordinates as a primary outcome of interest. Leadership development is a form of HIPO development, as organizations wish to target their highest performing employees for leadership positions.

Leadership development programs can be related to positive feedback from employees and increased employee effectiveness, as rated by managers. These programs are also linked to improvements in productivity and in turn, return on investment.

These methods of professional development may be further improved upon when coupled with some of the suggested organizational practices, such as training rotations and unlimited developmental opportunities.

Training is a key factor to successful leadership development. Similar to other areas of professional development, training has been identified as a means of improving leader effectiveness toward desired outcomes. Specifically, training has been linked to improvements in:

  • “Authentic” leadership-subordinate relationships, where employees perceive a more trusting and open relationship with their leader.

  • Orienting the new leaders toward the preferred leadership style of the organization. Examples of leadership styles include orienting leaders toward a focus on developing their subordinates (transformational leadership), which inspires and stimulates thoughtfulness toward and consideration of others, and leadership styles that are more stringent and achievement oriented (transactional leadership), which has been linked with improvements in innovation.

Other factors which have been identified as “best practices” in leadership development include:

  • Formal developmental programs. These are systems recognized by the organization which provide developmental training and opportunities for practice or application of learning

  • Executive coaching

  • Teamwork development and team-based leadership skill development


And with that, we’re wrapping up our 3-part Professional Development 101 series, written in partnership with I/O Psychology Masters students at Central Michigan University. Whether you’re kicking off a brand new learning & development initiative in your organization, or you just needed a refresher on the basics of professional development, we hope that you are able to bring this expertise informed by I/O Psychology into your own organization, and begin growing and retaining your talent with learning & development.

If you’re on the employee development train but don’t know where to start, or you’re looking for a “soft skill” supplement to your established technical skill professional development initiatives, we’d love to help. To learn more about how Plum can provide your employees personalized, talent-based professional development guides at scale, take a look at our professional development solutions page.