I'm pretty much on the record in favor of telling high potential employees (HiPos) that are part of a formal succession plan that "they're on the list". John Sullivan gave 20 reasons last week over at ERE why releasing the names in some fashion makes sense. It's a good list, if a little long. The length makes it comprehensive, so check it out.
You don't have to tell the HiPos that they're part of a Succession Plan to retain them long-term. But doing nothing - having no special plan for the HiPo - is a sucker's play.
Bottom line - you better run, not walk, to pair the HiPo with someone that gives a #### about their development and about keeping them at the company. For some companies, that might mean a formal mentoring program. For others, it might mean a customized development plan that gives the HiPo some access to training that others don't get.
Yes, Dorthy... Both mentoring and customized development plans are common components of Succession Plans. You can run the programs and include people without the formality of telling people they're on a list. But you're really telling them by including them in these types of programs. Still, stopping short of telling people that they're part of a list is the preferred approach by many.
The bigger question is this... The small to medium size company in America generally doesn't have a succession plan, nor do they have a formal mentoring program or the availability of customized development plans and the dollars it take to run them. What do those HR pros do?
Match the HiPo up with someone who cares, preferably their manager or the skip-level director. Talk to them about what "being interested" looks like. Conversations about what the person wants to do, special projects to develop them and an eye on accelerated comp goes a long way.
Informal Succession Planning = Giving a ####. Just a little bit. If you don't care enough to recognize the HiPo in some way, then you get what get.