Potential is the limit on the total base stats a mercenary can gain through experience. Growth slows near that limit, and regular mercenaries can earn chances to raise potential through veteran breakthroughs in combat.
Read "Potential" on candidate cards in "Recruit" to assess room for growth. For guild members, open "Growth" under "Mercs"; improve the Appraisal Office to narrow the uncertainty in potential estimates.
A young candidate with low current ability and high potential may be worth training. For an immediate boss attempt, compare current power alongside potential.