Before having a look at how companies assess people depending on each approach, there are two things to keep in mind:
1. Talent as a concept used in the organisational world is not without controversy and it’s usually defined in many different ways*.
2. This division between exclusive and inclusive approaches should be considered as a continuum rather than as two opposites with no degree of overlap.
At the very heart of the ‘War for Talent’* lies the notion of ‘workforce segmentation’ (a.k.a. ‘workforce differentiation’), according to which organisations should classify and monitor people through some sort of segmentation framework (e.g. A, B and C players* or by using a 9-box grid) and then give preferential treatment to the most valuable ones. This is based on the perception that organisations create unnecessarily high costs when they invest equally in all their workforce, when they could actually only focus on attracting, selecting, developing and retaining star employees who will ensure organisational success*. The idea is to invest disproportionate resources where disproportionate return on investment can be expected* (20% of the workforce or less*).
When organisations adopt this approach to assessing people, they look for differentiating factors or characteristics, and levels within these, in order to make this segmentation. Current performance is important but for organisations with a strong focus on the future it is not enough as this doesn’t predict future performance*. Therefore, they classify their people on the basis of possibility, i.e. how likely it is going to be for them to do or become something in the future. Here is when high-potential practices come into play and people are assessed on the ‘components’* of future success. These ‘components’ tend to be grouped into models and these models tend to vary from organisation to organisation (as their definitions of talent and high-potential do). It is difficult to include in a short article a taxonomy of models of potential, so for the sake of simplicity let’s say that these tend to go from ‘let’s duplicate successful people in the business’ to ‘we don’t know what the future will look like so let’s assess characteristics that will ensure success regardless of context’.
Retractors of the exclusive approach argue that by focusing on a few employees, organisations neglect the negative effects on those not considered valuable (up to 80% of the workforce), decreasing motivation, performance levels, commitment, justice and fairness perceptions, and team effort*. It is also argued that exclusive practices don’t necessarily ensure the retention (and therefore return of investment) of employees labelled as ‘high-potentials’ as these tend to increase their expectations to a point that organisation can’t meet, leading them to move to different organisations*.