How Big Blue manages its human assets

May 31, 2006
High-tech giant IBM Corp. ( employs 325,000 people in 75 countries, but it still faced an enormous staffing challenge: The company wasn't

High-tech giant IBM Corp. ( employs 325,000 people in 75 countries, but it still faced an enormous staffing challenge: The company wasn't always able to match the right person to the right situation. When IBM's Integrated Supply Chain (ISC) group set out to optimize all of its labor resources, it discovered it had over 13,000 different job descriptions, which made it extremely difficult to identify and develop-the talent the company believesit needs to remain competitive in the coming years.

According to Mark Henderson, manager of IBM's Workforce Management Initiative, finding somebody with the skill sets needed for a specific task among those 325,000 people was very much like trying to find a single needle among 75 different haystacks. But figuring out how to optimize its labor supply chain and in the process create what it calls a "demand-driven workforce — would present IBM with a significant competitive-advantage. All it would take would be a transformation of its entire management processes.

Getting to that point, Henderson explains, required linking up four core workforce disciplines: talent and mobility, supplier management, resource management and learning. Linking up talent, for instance, meant finding a simpler way of identifying the skills of each IBM employee.-"We created a common taxonomy-based on 500 core job descriptions," he says, which applies a consistent assessment of skills across all internal, external and subcontracted personnel. That was just for starters, though, as IBM began shifting its corporate culture from being an asset-based company to a laborbased company.

Over the past several years, IBM's ISC group has developed the capability to identify where its computer components and systems are located anywhere in the world, but it had no such proficiency to identify where, for instance, all of its French-speaking Java programmers experienced with Voice over Internet Protocol (VoIP) might be at any given time.What the company really needed, Henderson observes, was "a comprehensive ecosystem for tracking skills and job opportunities, and matching those skills with current and future work opportunities."

To that end, then, the Workforce Management Initiative developed what it calls a "Hot Skills Index," which as Henderson describes it resembles a temperature gauge. It offers a visual look into the company's labor supply chain where now any IBM employee or manager can access this index to identify where job opportunities are, anywhere in the world.

Let's say there's a pressing need for Spanish-speaking Java programmers in Ireland. An IBM manager can access the index and find all the Spanish-speaking Java programmers in the entire company, wherever they might be located. At the same time, any Spanish-speaking Java programmer who might be interested in moving to Ireland, whether permanently or temporarily, can let the hiring manager know that they're interested.

Making this skills-and-opportunities information available not only improves IBM's labor mobility, but it also allows its employees to reinvent themselves to match current job demand. It's also reduced the cycle time and operational cost to fill permanent positions.

In total, the various WMI projects have produced more than $1 billion in cash savings to date — $100 million in travel savings alone -—and a 5% to 7% improvement in employee utilization. The WMI has also greatly improved the company's ability to rebalance skills. As Henderson notes, "The WMI enables us to quickly adapt our workforce to the business ups and downs, while keeping us focused on our core business and core skills. We didn't want to change the IBM culture, but we did want to change our behavior and get away from the silo mentality."

As a result, the company has been able to speed up its staffing of key growth areas.