In most organizations, 1-10% of employees are labeled as “talent” and given access to the best training, mentorship, and career opportunities. These individuals are expected to deliver outsized returns for the company. Recently, however, many have called for more inclusive talent programs that recognize a wider range of skills across the workforce.

A new study by researchers at IÉSEG, the University of Zurich, and KU Leuven shows that this push for inclusivity may not have the intended effect. It turns out that how organizations define and communicate “talent” can strongly influence how employees feel about their place in the company.

Finding geniuses

The researchers based their work on the “genius effect.” This theory suggests that when only a small group of employees is labeled as talent, others are more likely to see them as extraordinary—true standouts—and accept being left out without much resentment. Meanwhile, being part of an exclusive group feels more prestigious to those chosen.

When talent pools are broadened, however, both groups react differently. Employees excluded from larger, more inclusive programs feel more envious and are more likely to think about leaving. Even those included in the talent pool feel less special and are similarly inclined to leave. The researchers call this the “inclusion paradox”: efforts to make talent programs more inclusive can unintentionally leave employees feeling less valued.

The way organizations communicate these programs also matters. Some companies keep talent status secret, fearing backlash about fairness or fears of favoritism. Surprisingly, this secrecy can help. The study found that employees who were told their company had a talent program but weren’t informed of their own status reacted better than those explicitly told they were not chosen. Similarly, explaining that the company chooses not to disclose talent status helped soften negative feelings.

Good intentions

The lesson? Transparency and inclusivity aren’t always the best policies when it comes to talent programs. Creating larger talent pools can alienate both the included and excluded, while openness about selections risks breeding envy or resentment.

To avoid these pitfalls, the researchers suggest limiting talent pools to no more than 5% of employees. This helps preserve the perception of those chosen as exceptional while ensuring others still feel valued as part of the team.

Ultimately, organizations need to weigh the benefits and risks of their talent policies carefully. A well-designed program can build pride and loyalty, but a poorly handled one might erode the very trust it’s meant to foster.