CEO: I like the idea of embedding hiring and retaining quality talent into our organization’s DNA. Can you elaborate on how HR can make this a way of life across the organization?
CHRO: Absolutely. You see, our business is constantly evolving in response to customer demands, technological advancements, and competitors’ strategies. To remain competitive, we constantly adapt by launching new products and services and discontinue outdated ones. This means the skills in our people we require are also evolving, and consequently, their roles in our business—each defined by a collection of skills—are changing too. And this is a never ending cycle and is supposed to be so. Let’s consider two key elements: skills and roles.

HR’s ability to provide a framework and system to continuously assess employees’ skills, redesign roles by adding or removing skills based on changing business needs, and ensure employees are deployed in roles that match their skill ratings is critical. If this happens, our business will keep moving forward or else it will stagnate. Moreover, new employees must be hired based on the skills required for these refreshed roles. This is an ongoing process owned by HR. Without HR’s strategic involvement, skills and roles would be defined instinctively by business leaders rather than through a proven framework or best-practices.

CEO: I agree, we must measure skills and refresh roles as the business needs continue to evolve. Can you share how HR has demonstrated its impact on this framework—and perhaps other areas—over the past 8 months?
CHRO: Certainly. After our last board meeting, and with your support in approving HR’s proposed budget, we launched a strategic program called R7. This program focuses on seven KPIs that HR designs, implements, and owns. We formed a small strategic team called the R7 Team, which oversees this program. R7 stands for:

Recruit | Rate | Retain | Redeploy | Redevelop | Release | Rehire

R7 Framework

It’s a three-year transformational program designed to position us miles ahead of our competitors. I’m thrilled to share some remarkable results the R7 team has achieved in just 8 months.

CEO: Those are familiar terms individually, but I’m curious how you’ve tied them into the R7 strategy and what results have been delivered.

CHRO: Thanks for your belief in R7. Let me start with the first and most important R: Recruit.

Recruit defines the foundation and quality of our company’s performance. For this, the first step was to build an external image of the company in the eyes of the best candidates among the available pool of candidates.

We worked with our marketing agency and a few of our key BU leaders to develop a story about five high performers who have stayed with our company for the last 10 years. We interviewed them to learn the best things about the company from their perspective. The R7 team updated our internal Culture Code, conducted internal roadshows to proudly present our renewed culture, and then worked with the Talent Acquisition leader to incorporate the storyboard into our external Career Portal and candidate pitch deck. The R7 team ensured every single word and every single slide had a soul, creating a euphoria within the company among all leaders and their direct teams about how proud we are of this renewed culture. The five high performers were made the brand ambassadors of the new culture. The results were phenomenal. I am using a scale of 100 to showcase the results we achieved for ease of understanding, using one market as an example.

For our graduate program in Singapore, out of 100 available candidates, 40 applied last year, and we hired 10 out of 40. Out of these 10, 3 were highly rated, 5 were above average, and 2 were average. This year, 70 candidates out of the 100 available candidates applied, and we selected 10 out of 70. 8 were highly rated, and 2 were above average. Similar results were achieved in our other markets as well. The R7 team’s philosophy for achieving the Recruit KPI was simple:

Increase the ‘Willingness to Join’ for our company among the best candidates available in the market, so that more high-potential candidates apply, and our firm can select the best candidates from the best pool. We are replicating the same strategy for lateral hiring as well, and I am confident that we will achieve stellar results for lateral hiring too.

CEO: That’s impressive. Which other KPIs in the R7 program have you executed and delivered results for in the last 8 months?

CHRO: I appreciate your encouragement for our R7-Recruit strategy. Let me briefly talk about what we did for ‘Rate | Retain | Redeploy | Redevelop | Release.’

We created a rating program called ‘Democratization of Ratings Across the Organization.’ We rolled out a digital initiative to collect ratings from everyone for everyone. This included peer-to-peer ratings, manager-to-direct-report ratings, and direct-report-to-manager ratings. We also hired an external consulting company to administer and analyse the data. Before rolling out the program, the R7 team cleaned up the skill definitions across BUs and markets, mapped them to roles, and adjusted the skills required for roles by consulting with BU leaders. Based on the rating results, we found that approximately 15% were highly rated, 55% were average, and 30% were low performers.

Performance Rating Breakup & Attrition % by Performance Score

The R7 team then collected historical attrition data across the company, segregated by high performers, average performers, and low performers. Previously, we focused on the overall attrition rate, which was below 15%—a healthy level compared to our industry average. However, the R7 analysis revealed surprising findings: 25% attrition among high performers, 15% among average performers, and 7% among low performers (which is worse than industry average)

The R7 team analysed the common reasons cited by high performers for leaving. Understanding this issue couldn’t be fixed in a few months, we deployed a one-on-one retention strategy for every single high performer by collaborating with their individual managers and BU leaders. They addressed these concerns and explained the organizational changes already underway, which would yield visible results within the next 6-12 months.

In parallel, the R7 team implemented a comprehensive strategy to increase the retention of high performers and devised a plan to increase the overall percentage of high performers in the company through a combination of Redeployment and Redevelopment strategies.

Last year, we had 15% high performers, 55% average performers, and 30% low performers. Among these, 25% of high performers, 15% of average performers, and 7% of low performers left the company. The R7 team’s goal is to reduce high-performer attrition to below 5% as part of the retention strategy. Instead of focusing on reducing attrition among average and low performers, the R7 team is analysing the skills of these groups (which make up 85% of our workforce) and has created a Redeployment and Redevelopment plan to increase the overall percentage of high performers from 15% to 30%.

The strategy involves releasing employees whose performance remains below average after undergoing a 12-month Redeploy/Redevelop cycle (we need this as our low performers attrition is way below industry average and it is because we have low performers in middle management too who are responsible for these sub-par industry average and it is costing us tangible business). So far, year-to-date, we have increased the percentage of high performers from 15% to 20%, reduced the attrition of high performers from 25% to 15% and our low performers attrition has increased from 7% to 10% over the last 7 months.

CEO: That’s impressive. Now I can see that, while the individual words in the R7 strategy are commonly used, you’ve created a well-thought-out plan to connect them meaningfully, aiming to increase the percentage of high performers in our company and, most importantly, retain them. I am curious to understand your definition of R7-Rehire. What’s unique about your approach, given that we already have an Alumni chapter in our company?

CHRO: I’m glad you asked. Rehire is one of the most important KPIs I want to measure R7 against because it is directly tied to our company culture. The Rehire strategy has a clear agenda: to turn our ex-employees into brand ambassadors.

The reference value of ex-employees in the market is significantly higher than that of current employees. If our employees leave the company on a positive note, not only do we stand a chance to rehire them, but they also significantly enhance our company’s brand as a great employer. This, in turn, increases our ‘Willingness to Join’ index among the best talent in the market and strengthens our Recruit KPI.

Our goal is to rehire 10% of ex-high performers annually as boomerang employees.

CEO: I love the idea of measuring our company culture based on the relationships we maintain with our ex-employees. Over the years, I’ve realised it’s impossible to retain 100% of our high performers. Great talent will always have plenty of job opportunities, and while we can reduce high-performer attrition by offering fast growth, quality work, and salaries above market rates, some will still choose to leave. With your strategy, we can hopefully bring 10% of them back as boomerang employees.

CHRO: I’m glad we’re on the same page—that HR is NOT a Cost Center 🙂. And I look forward to meeting you again next year to showcase R7’s positive impact on our business.

The article introduces the R7 Framework (#R7F), inspired by the groundbreaking ideas of legendary HR thought leaders Dave Ulrich and Josh Bersin.

References:

Forbes Article on best practices for hiring and managing top performers by Henryk Krajewski.
Thought Leadership piece on organization culture by Donald Sull and others in MIT Sloan Management Review.
McKinsey’s Roberta Fusaro and Bonnie Dowling’s podcast on handling employee attrition.
Award-winning author Marlo Lyons’s HBR article on best practices for boomerang hiring.

Summary : R7 is a framework to ‘Recruit & Retain’ High Performers while adapting to evolving business needs.

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