This is borne out by further research from recruitment outsourcing specialist Capital Consulting and Cranfield School of Management. Their study found that British business was failing miserably to make the most of its star performers – and that there was a major ‘disconnect’ between what senior managers say about talent management and what is actually happening on the ground.

Phil Smith, managing consultant at corporate psychologists YSC, gets straight to the heart of the issue. Talented people aren’t leaving because there is no room at the top - the problem, he believes, is that organisations haven’t yet cracked how best to nurture and develop their high flyers. “The critical issue isn’t really about clogged pipelines, it’s a broader issue about the ability of organisations to capably host talented people,” he says.  “The thrust of most talent work has been about ability and aptitude – how to find people with brain boxes as big as houses and oodles of energy. But we haven’t devoted as much time to trying to understand specifically what kind of workplace environments are going to bring the best out in very capable people.”

Experts in the field point to the fact that highly talented people are also often quite complicated and demanding individuals. They are free-spirited and value their independence – but they also need frequent reassurance that the business still regards them highly and is helping plot their course to the top.

Tim Richardson, director of leadership and talent at PricewaterhouseCoopers UK, says this means that if organisations want to keep hold of their best people, they need to develop an insight into what motivates them - not just generically, but on a very personal basis. “Organisations need to work on understanding individually what motivates these key people.  They can then compare these personal motivators with organisational goals and see what they can achieve within that. So if someone needs new challenges and there are no opportunities in terms of status or promotion, you need to look at how to create cycles of experience that will give people the stimulus they need. You have to keep these people working on the edge, because if they stagnate, there is potential for them to derail,” he says.

HR professionals seem agreed that open, honest communication between the organisation and its high flyers is a vital part of keeping people engaged. Both parties need to know what is on each other’s minds.

The Prudential Group, for example, places great emphasis on creating an ongoing conversation with the people in its talent pool. “It’s about building a very open dialogue with individuals so they understand what they are capable of in the context of their own aspirations, as well as in the context of what we need them to do as a business,” says Laurence Barratt, director of group resourcing and development. “If you can build a really clear insight around that you are able to be much sharper about that sweet spot in the middle – the development needs of individuals, in the context of Prudential.”

He acknowledges that this isn’t always an easy conversation. “You may have people who do not have the capability to meet their aspirations. Alternatively, they may have the potential but may be unwilling to follow the path mapped out by the organisation, so it helps to understand these dynamics.”

Prudential facilitates this dialogue with its top talent through a structured, individual development programme. Those who have been earmarked via the succession planning process as having the potential to reach board or executive committee level go through either an intensive one-to-one assessment, spread over a three to six-month period, or a three-day intensive programme, depending on their level.

Individuals come out of the process with a clear picture of their potential and the development required for their journey. The organisation tracks progress over time, ensuring they are getting the support and opportunities they need.

“Having this shared view between the organisation and the individual is vital, because until you have this detailed dialogue you can’t be sure they are someone you want to retain, because they can’t be sure they want to stay,” says Barratt. “A good assessment facilitates this process - it’s not just the boss having a chat, it’s a much richer discussion.”

This in-depth understanding can also help organisations enrich people’s jobs in the most appropriate way for them – through secondments and projects, for example. “Organisations are constantly going through change, so it’s not difficult to find these opportunities,” says Barratt.  “The difficulty is being able to target them more specifically. So are you putting individuals on a project because you want to keep them busy for a while, or are you doing it because they are gaining career capital that will help both them and the business?”

Many organisations do indeed use secondments and projects as a way of giving high potential people the ‘stretch’ they need. There is of course a danger that these opportunities can become ‘holding’ mechanisms, used to keep people happy until a top job becomes available. But managed strategically, they can give high potential people the challenge they crave – and add real value to the business at the same time.

UBS Investment Bank follows this approach for international assignments. “We are a global firm and for years we have been sending people overseas. What we realised is that the process is best used not to fill gaps but to develop people with leadership potential,” explains Issy Homan, global head of career and performance management.

“The board’s ‘people committee’ realised that to get the best from the investment we were making, we needed to develop a strategy for sending people on assignment. Managed correctly, assignments can be an invaluable part of the bank’s overall talent strategy, and far more than a means to fulfil local recruitment needs,” says Homan.

Development opportunities play a critical role in helping organisations retain their top people.

Maria Yapp, chief executive of Xancam Consulting, says organisations must take heed of the fact that high potential people like their development delivered in a different way to mainstream employees.

Xancam’s research suggests that high flyers want contact with, and mentoring from, the most senior people in the company, together with broad commercial exposure to increase their understanding of the business as a whole. They want opportunities to prove themselves in high-profile, high-risk roles.

Top talent also value personally tailored development programmes, rather than one-size-fits-all approaches, and like ‘active’ learning as opposed to the widely used ‘action’ learning sets.   “These people want to write the book, not read it,” says Yapp.

This view is confirmed by recent research from the CIPD, which shows that hands-on experience – as well as one-to-one coaching - is significantly more effective for high potential people than traditional management development programmes.

The Legal Services Commission, for example, places a strong emphasis on coaching within its talent management programmes. “People have told us that having access to good coaching has been one of the things they really value,” says Elizabeth Crosse, executive coach and HR consultant at the commission.

When employers are deliberating about how best to keep talent engaged, they also need to take account of what is known about ‘Generation Y’ – namely those people born from the early 1980s onwards. Research predicts that these individuals may go through as many as ten career changes during their working lives, with a significant proportion going on to start their own businesses.

“They are an interesting group with high expectations of their employers, and what they will not appreciate is a sense that the employer is trying to pin them down for life,” says Yapp. “What they will value, however, is an employer who gives them the kind of skills and experience that will help them achieve their goals.”

Yapp acknowledges that this calls for a significant mind-shift on the part of organisations and they will need to get over the fact that many of the people they invest heavily in will leave the business. “You need to follow the path of least resistance and acknowledge that increased mobility is a fact of life,” she says. 

“What organisations should be doing is thinking about how they can develop their reputation as  ‘exporters’ of talent. If they can manage that successfully, they will attract new talent and keep refreshing the pipeline. It’s about letting go of that attachment and working with the natural flow of things,” adds Yapp.

The National Audit Office certainly subscribes to this thinking. As part of its talent management programme it regularly sends people on secondments – and doesn’t view it as a failure if they don’t come back. “Our aim as an organisation is to have a greater impact on improving the quality of public services, so if some of our senior people went on to take up leadership roles in public-sector organisations, we would regard that as a success,” says Pat Taylor, head of talent management at The National Audit Office. “Of course we don’t want them all to leave, and we do want to grow our own leaders within the organisation, but we have to be mature and take a broader view of it.”

There is a tendency for organisations to regard people who leave in a negative light, with ‘never darken our door again’ being the prevailing attitude. But there are advantages to leaving the door ajar and making it easy for people to return.

“Appreciate that they will go to other places and learn fantastic things, and should come back with a knock-out combination of the wisdom they have gained in your organisation and fresh insights from elsewhere,” says Xancam’s Yapp.

She adds that this means organisations need to reframe the way they think about their relationships with people – treating departed employees as ‘alumni’ and using technology to keep in touch. For example, to keep tabs on talented employees some employers are already using social computing utilities, such as Facebook.

Dale Haddon, director of talent at Royal Mail, uses a sporting analogy to illustrate the approach employers need to take. “In any football league you know who the good players are in other teams, and you know the value and worth of the players who have left your team. Today, that knowledge needs to extend internationally – and I think increasingly companies need to find ways of monitoring a growing network of people they know are talented,” he says.

Royal Mail actively uses networks as part of its strategy for keeping high potential people engaged. It regularly brings groups of talented individuals together, for example, to learn from each other while working on charitable projects.

The postal group also keeps high flyers fulfilled through secondments and exchange opportunities, and by encouraging them to take up non-executive directorships or trusteeships. Lateral moves is another approach it employs. “We might say here’s a level move which is just outside your experience, just on the edge of your comfort zone, which will give you the stretch we think will satisfy you. In many ways that sometimes provides a more rewarding and broadening experience than going up the pipeline to the next level of hierarchy,” says Haddon.

“It doesn’t have to be a pyramid approach where people are climbing inexorably to the top. It’s not about forcing everyone up a kind of funnel that narrows increasingly the higher you go – it’s about keeping things open and addressing people’s development needs in a way that keeps them fresh and interested,” he adds.

Haddon also notes that employees often actively welcome these lateral moves, particularly if it enhances their work-life balance. “Giving people challenges that fit their lifestyle is increasingly an issue rather than just assuming they are executives 24/7 and prepared to do anything at any time.”

Of course it’s not just people’s personal needs and expectations that have changed. Business boundaries are also a constantly moving feast.

Anita Mattison, HR director at chartered accountants Baker Tilly, says organisations need to take account of the pace of organisational change when considering succession planning. The traditional ‘traffic light’ system, where there are always two or three people ready to step into critical roles, often just isn’t relevant any more.

“The trouble is that organisations change so rapidly that you end up reinforcing structures that aren’t fit for purpose any more,” she says. Baker Tilly takes a strengths-based approach to its top talent strategy, focusing on what people do really well, rather than trying to ‘fix’ their weaknesses.

“All of the people who are two or three years away from partnership go through a series of assessments, and as part of that we capitalise on identifying what their strengths are and how the company can benefit,” she explains. “That’s a lot more motivating for people - and to my mind an organisation that does this has a better chance of getting key people to stick around.”