talent management case study ibm

Performance Management Case Study

In collaboration with mckinsey & company.

Rebooting Work for a Digital Era

How ibm reimagined talent and performance management, february 19, 2019, by: david kiron and barbara spindel, introduction.

In 2015, IBM was in the midst of a tremendous business transformation. Its revenue model had been disrupted by new technology and was shifting toward artificial intelligence and hybrid cloud services. To increase its rate and pace of innovation, the company was rapidly changing its approach to getting work done. New, agile ways of working together with new workforce skills were required to accomplish its portfolio shift. But standing in the way was an outdated performance management (PM) system employees did not trust. Diane Gherson, chief human resources officer and senior vice president of human resources, recognized that IBM’s approach to performance management would need to be entirely reimagined before the organization could fully engage its people in the business transformation.

Gherson says the performance management system then in place followed a traditional approach, one that revolved around a yearlong cycle and relied on ratings and annual reviews. “You’d write in all your goals at the beginning of the year, and at the end of the year, your manager would give you feedback and write a short blurb and then give you your rating,” she says.

IBM’s approach to performance management would need to be entirely reimagined before the organization could fully engage its people in the business transformation.

That approach was “holding us back,” Gherson says. “The massive transformation meant we were shifting pretty dramatically into new spaces and doing work really differently. Whereas efficiency was very important in the prior business model, innovation and speed had become really important in the new business model. And when you’re trying to make that kind of a fundamental shift, it’s important, obviously, to bring your employees along with you.”

Gherson knew from employee roundtables and surveys that IBMers didn’t have confidence or trust in the existing PM system. This view was at odds with the views of other senior leaders, who felt the system in place was working well from their perspective.

It took Gherson more than a year to convince her peers in senior leadership that IBM’s digital transformation would not succeed without higher levels of employee engagement, and that meant focusing on the existing PM system. Eventually she won them over. As for the traditional PM system that was holding the company back? “We threw all that out,” Gherson says. “We kept our principle of cultivating a high-performance culture, but pretty much everything else changed.”

Company Background

2015 was hardly the first time the company had found itself in the midst of a fundamental shift. IBM has had to reinvent itself time and again to remain relevant. Founded in 1911 as machinery manufacturer Computing-Tabulating-Recording Co., IBM (International Business Machines) over the decades has repeatedly adjusted its business focus — from early data processing to PC hardware to services to software systems — in response to evolving markets and competitive pressures.

Today, IBM, headquartered in Armonk, New York, employs about 360,000 people in 170 countries. After 22 consecutive quarters of declining revenue, the company reversed the trend in the fourth quarter of 2017 and subsequently has shown revenue growth. Growth in its cloud, artificial intelligence, cybersecurity services, and blockchain units have contributed to the turnaround, with about half of its revenues now derived from new business areas. Indeed, these days, IBM is betting big on AI and hybrid cloud, recently announcing plans to acquire open-source software pioneer Red Hat, an innovator of hybrid cloud technology, for $34 billion. With that notable acquisition, the company is making a bold bid to compete against heavyweights like Google, Amazon, and Microsoft in the cloud services market.

The new strategic direction has necessitated a change in how IBM’s talent is managed and how the work of the digital enterprise is done. “In a classic, traditional model, a manager will oversee the work of an employee and, therefore, have firsthand knowledge of how they’re doing,” Gherson observes. “That traditional model is long gone in most companies. Work is more fluid.”

At IBM, work is being done differently in three fundamental ways. One is a stronger emphasis on project work: Individuals move around the organization to work on various projects and initiatives, joining teams for short stints before moving on to new teams to tackle new challenges. Two, the entire concept of performance is shifting from primarily emphasizing performance outcomes to a model that also emphasizes the “how,” including the continuous development and application of new skills to keep up with the exponential rate of change in technology. Finally, with the adoption of agile ways of working, continuous feedback becomes a critical part of workflow. The new PM system needed to abandon the concept of an annual feedback event and find a way to reinforce a culture of feedback ― up, down, and across.

Meanwhile, digital transformation in the economy at large is exerting pressure on IBM as the tech giant strives to maintain an edge over its competitors. As a result of these internal and external changes, the company has seen the need to prioritize not only innovation and agility but also the continual development of employee skills, since what it requires of its talent base has also changed, with the need to continually develop employee skills becoming paramount.

Test-Driving a New System

The company’s key decision was to crowdsource its new performance management system rather than impose something top-down on its workforce, which was not consistent with agile methodologies or design thinking. Gherson says it was “really important to have employees feel like they were stakeholders in the new design, not just bystanders or consumers of it.” To that end, IBM undertook a process for designing the system that was a radical departure from the past. “There were many skeptics initially,” Gherson recalls, highlighting the challenges of the project. IBM relied heavily on enterprise design thinking, creating a minimum viable product (MVP), and invited the workforce to test it and offer feedback. Gherson likens the process to “giving people a concept car that they can drive and kick the tires as opposed to asking them what they would like to have in a car.” The rollout was fast: The September 2015 launch of the MVP happened within a couple of months of the first design-thinking session.

While many employees were thrilled that the traditional approach to performance management was on its way out the door, most were skeptical that the replacement program would be an improvement. As Joanna Daly, IBM’s vice president of global talent, recalls, “Employees actually said to us, ‘We don’t believe that you want our input. We think you already know what you’re going to do, and you’re just sort of pretending to ask for our input.’ We had to figure out how to prove to employees that we were authentic and serious in wanting them to shape this.”

Changes to IBM’s Performance Management

HR did so in a simple way: by asking employees what they wanted, giving their responses due consideration, and playing back what it was hearing. “We asked, ‘What do you want to get out of our approach to performance?’” Daly says. “And the answer we got was they wanted richer feedback. And they hated being defined by a single assessment rating.”

When Gherson blogged about the new system on the company’s internal platform, her first entry was viewed by 75,000 IBMers within hours, with 18,000 responding with detailed suggestions. The company used its proprietary Watson text analytics to sort through what employees wrote, enabling Gherson to put out a second blog within 48 hours enumerating which elements employees liked and which they disliked. The company proceeded through numerous iterations and playbacks, with employees continuously participating in the design process. Management even reached out personally to the most vocal critics at every step, directly engaging their input in producing the next prototype. The eventual result ― officially launched in February 2016 and called Checkpoint ― was aligned to the employees’ input, providing a PM system focused more on feedback and less on assessment. (See “Changes to IBM’s Performance Management” for key differences between the old and new system.)

The eventual result was aligned to the employees’ input, providing a performance management system focused more on feedback and less on assessment.

Rather than receiving a single rating at an annual review, employees now have more frequent check-ins with managers. Through the company’s mobile ACE (appreciation, coaching, and evaluation) app, they also can seek feedback from peers, managers, or employees they manage.

The new and more agile system allows IBMers to revise their goals throughout the year. In response to crowdsourced input during the design process, employees are assessed according to their business results, impact on client success, innovation, personal responsibility to others, and skills. Managers are held accountable through pulse and mini-pulse surveys of the people they oversee, with poor results leading to training or, in some cases, removal from management.

Checkpoint is a far cry from the previous stand-alone HR program that rated and ranked employees. It’s aligned to the critical factors for IBM’s success and designed to ensure that the company achieves advantage with its talent in a fast-moving competitive landscape.

Checkpoint has been a major contributor to employee engagement, which has increased by 20% since IBM deployed the revitalized performance management system. In fact, in the company’s annual engagement pulse survey, employees pointed to Checkpoint as the change that made the biggest difference in their experience at IBM.

Focus on Learning and Growing

Technological change ― in the marketplace and in IBM’s business focus ― is driving an unremitting need for new skills, making their development an essential part of IBM’s corporate strategy. “In today’s world, skills are actually more important than jobs,” Gherson declares. “In order to reinvent our company, we need everyone to reinvent their skills on a continuous basis. You can’t hire someone because they have a particular skill. You have to hire someone because they have the capacity to continue to learn.” To that end, in addition to the new approach to performance management, talent management at IBM now includes a personalized learning platform and a personalized digital career adviser.

The platforms use data to infer which skills employees have and connect them with learning to build those skills that are increasingly in demand. The personalized program is “really accessible, very consumer-friendly,” Gherson says. “It has everything: internal and external courses, Harvard Business Review articles, MIT Sloan Management Review articles, YouTube videos ― you name it. And it serves it up for you as an individual, based on your unique role. It will say, ‘Given what you’ve taken so far and your career goals, here are some recommendations and here’s what people like you have taken and how they’ve rated it.’”

To encourage career mobility, IBM launched a digital coach for employees wishing to advance their careers within the company. My Career Advisor (known commercially as Watson Career Coach) was created by employees during a company-wide hackathon. It features a virtual assistant that uses data to provide personalized career counseling, such as average time to promotion from an employee’s current role and career steps taken by others to acquire the job a user might want. Another related platform, Blue Matching, serves IBM employees internal job opportunities tailored to their qualifications and aspirations, inferred from their CVs.

What enables these learning and career programs, says Daly, is “having more data available and having better insights to guide the user. These new digital platforms mean we can get these insights directly into the hands of employees and their managers.” Also essential has been uniting these platforms. “It’s not about having a learning platform and having separately an internal jobs platform,” Daly notes. “It’s how do we integrate these two together with AI-enabled advice for employees to explore? What kind of job should I do next? What are my skills gaps if I want to pursue that job, and then what learning would I take to close that gap?”

Real-Time Insights

The new PM system was about agility and prioritizing feedback over assessment. IBM elected to go further and figure out how to use all the insights it was developing from its analytics and AI capabilities to ensure that useful insights could readily emerge and be accessible to both HR and the workforce.

More predictive and prescriptive insights will be transmitted directly to managers and employees at the moment they’re needed most, embedded in the workflow.

“Thanks to these digital experiences, we’ve modernized how to deliver insights to our workforce and management ― right when they need it,” Daly says. She cites compensation decisions as an example. Using machine learning, “we advise managers about which employees should get the highest salary increase. We arrive at the recommendation using dozens of internal and external data sources. This helps with more transparent conversations between the manager and her employee,” she says. “We give managers talent alerts directly on their personalized dashboard. For example, the system might observe, ‘Hey, your team member has been in her band level for a few years and is a good performer and is building her skills. Have you thought about promoting her?’”

Going forward, Daly anticipates that more predictive and prescriptive insights will be transmitted directly to managers and employees at the moment they’re needed most, embedded in the workflow.

Preventing Attrition

“In our industry, talent is the No. 1 issue,” Gherson contends. “And so, it’s really important that we attract and develop and continue to upgrade our skills and retain talent if we’re going to win in this market.” Despite more than 7,000 job applicants coming into IBM every day, with a tech talent shortage and ongoing talent wars in AI and cybersecurity, retention becomes particularly crucial; experts agree that in the coming decades, there won’t be enough qualified people to fill available jobs.

Gherson and her team received a patent for their predictive attrition program, which was developed at IBM using Watson AI algorithms to predict which employees were likely flight risks. Most managers were initially skeptical at the notion that algorithms could have more insight into their employees’ intentions than they did — until the algorithm consistently made correct predictions. Then, Gherson recalls, “We started getting these little notes from managers saying, ‘How did you know?’”

Significantly, the technology is about prescription in addition to prediction. “We reach out to you as a manager,” Gherson explains, “and we tell you that you’ve got someone who is at high risk to leave and here are the actions we recommend you take.” Because the AI is able to infer which skills individual employees possess, it can then recommend actions for managers to implement — often related to furthering skills development — to prevent them from leaving. By helping their employees develop new skills, managers bolster employee engagement and increase job satisfaction, advantages in a talent-scarce market environment. “The attrition rate of the people we touch with this program is minuscule compared to the control group,” Gherson says, noting the improvement in employee retention has already saved IBM nearly $300 million.

The Evolving Role of HR

Given the heightened significance of talent, HR, as the function primarily responsible for talent, has a revitalized role to play in executing corporate strategy and driving value at IBM.

To achieve a more central role in value creation, IBM’s HR function had to be freed from the tasks that traditionally consumed so much of its managers’ time. “People have a million questions: ‘When do I have to sign up for my 401(k)?’ ‘What’s the deadline for the health benefits program enrollment?’ These are all findable pieces of data, but actually finding them has always been the hardest part,” Gherson says. “I wouldn’t say that’s the highest value that HR could provide, but it’s a lot of what HR has been doing. Maybe in some companies that’s all HR does. But that’s not the purpose of HR. You don’t need HR to answer those questions. You just need really great bots and virtual assistants.”

Here, the company again exploited its own capabilities in AI and analytics. In HR alone, IBM currently deploys 15 virtual assistants and chatbots, and the company is diligent about measuring both employees’ experience and the effectiveness of the bots in responding to questions. With the bots taking on routine tasks previously performed by people, IBM’s HR function can devote itself to what Gherson sees as its real purpose: “to create competitive advantage with your talent and improve the employee experience.”

Of course, technology and data are vital not just in freeing up the humans on the HR team but also in optimizing their performance. “For too long, HR people have relied on just being highly intuitive: ‘I think this person’s going to be a good fit for the job’ or ‘I think a two-year assignment is the right length,’ or whatever,” Gherson observes.

“And actually, you can employ science-based methods to come up with an estimate ― for example, there’s an 80% chance they’ll fail in this job because they lack these capabilities or there’s a 50% chance that you’ll get no return on your investment in that international assignment because it’s too short,” she says. “So, we should be able to give much better advice to the people that we support.”

Gherson acknowledges that working this way also requires culture change within the HR function, which demands different skills like data science and different job roles to fully realize the disruption. She has invested in a robust re-skilling education program for her team of HR professionals.

Gherson says HR can’t simply stop at using technology to detect patterns. Giving managers data on, say, turnover rate, without also offering guidance on how to use that information, leaves them to rely once again on intuition to solve problems. As with the predictive attrition program, IBM pairs reporting data with recommendations for action.

“Technology enables us to not just report, but to then say, ‘If you keep doing what you’re doing, here’s what the picture will look like a month from now, a year from now. Your cost of labor will be higher than your competitors by 12% if you carry on hiring at the rate you’re hiring. So here’s a prediction that’s going to be a bit of a wake-up call for you. But if you take these actions, here’s the impact,’” Gherson explains.

“We’re going from intuitive to reporting to predicting to prescribing,” she adds. “And if we can take it all the way to that level, then we’re really adding value. We’re very proud of the fact that through these talent programs, HR delivered more than $107 million in benefits in the last year.”

IBM’s efforts to modernize its performance management system are part of an ongoing process. “We will continue to refine the measurement and expectations of skills growth in IBM as it becomes clear that we need to become a fabulous re-skilling-at-scale machine and hold ourselves accountable to that,” Gherson says. Daly echoes that point: “These aren’t programs that HR is developing. This is a new way of working that all IBMers are developing together so that we can keep our skills up to date as things keep changing in the future.”

Joanna Daly

vice president, global talent

Joanna Daly is IBM’s vice president of talent with global responsibility for talent acquisition, people analytics, AI strategy for HR, employee experience, performance management, and careers and skills. Her previous roles at IBM have included leading compensation and running HR for the company’s global industry platforms, blockchain businesses, and European business services operations, with stints in Singapore and India as well. Joanna is a frequent speaker at conferences and in the media on AI in HR, diversity and inclusion, skills, and the future of work.

Diane Gherson

chief human resources officer and senior vice president, human resources

As chief human resources officer and senior vice president of human resources, Diane Gherson is responsible for the people strategy, leadership, skills, careers, engagement, employee services, labor cost, and diversity and inclusion of IBM’s 360,000-person global workforce. During her tenure as CHRO, as IBM has dramatically shifted its business portfolio, Gherson has redesigned all aspects of the company’s people agenda and management systems to shape a culture of continuous learning, innovation, and agility. At the same time, she has digitally transformed the HR function, incorporating AI and automation across all offerings, resulting in more than $100 million in net benefits in the past year.

HR Transformation as the Engine for Business Renewal

Commentary by Anna A. Tavis

Industry disruptions have headlined business news since the early 2000s. With the cloud revolution driving change in global markets, traditional built-to-last companies have had to rapidly transform themselves to survive, adapt, and compete. Market-facing customer service, sales, and marketing functions reinvented themselves in the new digital image a decade ago. Although HR is a latecomer to the digital scene, it stands ready to undergo its own reinvention armed with smart technology, data-driven insights, and a renewed sense of purpose.

To paraphrase Diane Gherson, IBM’s chief human resources officer, talent is unquestionably the new economy’s number one competitive asset. HR, as a traditional caretaker of talent, has to leapfrog generations of evolution, moving from intuition to reporting to predicting and ultimately to prescribing — all in a matter of a few years. Some companies, like IBM, are successfully making this leap. Critics, so ready to question HR’s relevance and viability, should take note.

This case study describes HR transformation at IBM. It is particularly instructive for companies embarking on their own HR digital transformation efforts. IBM’s most important lessons are less about the specific solutions they introduced and more about the way they went about finding their new philosophy and their new operating model. The IBM story is as much about what they decided not to do as it is about what they ended up doing.

Diane Gherson’s most consequential first step was to abandon the practice of benchmarking other companies and not to rely on HR experts to renew her strategy. She turned instead to IBM’s own employees for answers. Not surprisingly, the message her team heard from employees was not always in line with the view of senior management, which did not believe much in HR could change. It became clear that IBM’s transformation was to be anchored in agile ways of working. The company’s traditional performance management (PM) was seen by employees, however, as an administrative chain holding back the adoption of fast agile ways of working. The decision was made to radically redesign PM with employee experience in mind. In the process, all other functional areas in HR were redesigned and realigned to serve HR’s new purpose.

The following 10 decision points are worth considering when reviewing the IBM case in the context of your own organizational transformation:

1. Decide where to start. IBM’s first and highest priority was to redesign its PM system. The team turned to its own employees for redesign ideas, not HR experts or senior leaders.

What you can do: Identify the weakest link in your talent management system. If it’s your PM approach, this is where change should begin.

2. Connect your transformation to an existing element of your strategy. IBM used its adoption of agile practices across the organization as the primary catalyst to overhaul its entire talent management system.

What you can do: Choose the one key performance indicator (KPI) that intersects with talent that will have the most impact on your business.

3. Renew your talent/HR purpose. By committing to employee experience, engagement, and learning, IBM shifted away from an earlier focus on differentiation and high potentials.

What you can do: Decide what type of culture you want to have. Assess how fast you can move from an administrative compliance- and appraisal-based approach to being employee-centric and learning-focused.

4. Decide where to start: Identify the most consequential first step with the broadest possible impact. IBM made a PM redesign the priority in its talent transformation process and had the capacity, capability, and political capital to go global with its minimum viable product (MVP) for the entire organization.

What you can do: Identify whether performance management is the weakest link in your talent management system and where the pain points are for your employees and management.

5. Select the design method consistent with your new purpose. For IBM, agility and design thinking became key methodologies HR successfully applied.

What you can do: Select and agree on design principles and method(s) consistent with your talent philosophy and aligned with your purpose. Teach those skills and test to see if they work for all.

6. Get your organization’s buy-in to support your transformation effort. IBM took a two-tiered approach to secure buy-in: (1) It earned employee trust and engagement by crowdsourcing design ideas from across the company. (2) It won over senior management by running successful experiments proving that attrition could be predicted by data.

What you can do: Learn to listen. Generate insights and communicate decisions supported by the evidence you collect. Engage key stakeholder groups with data relevant to them.

7. Decide how to test and improve the designed product. IBM went for speed, customer feedback, and continuous improvement. Having designed and released their crowdsourced PM process, Checkpoint, in record time, the company “proceeded through numerous iterations and playbacks, with employees continuously participating in the design process.”

What you can do:

Choose one of three approaches:

• Launch a company-wide MVP: Your priority initiative is based on your company’s KPIs and readiness for the company-wide rollout.
• Experiment and create a proof of concept. Run a series of experiments starting with the business units most ready to innovate. Show results to others.
• A combination of the above two approaches.

8. Go beyond performance management: Decide on your next steps. Successful implementation of the redesigned PM process revealed further strategic talent needs for IBM:

• Accelerate and personalize skills renewal.
• Customize decision support for managers.
• Create an internal marketplace for jobs.

What you can do: PM renewal has a domino effect on all HR processes and tools. What comes next on the renewal list will have to be decided by your company depending on its strategic priorities. Meanwhile, HR will have to renew and upskill itself as the transformation process continues.

9. Assess how to turn technology and data into the greatest enablers of transformation. IBM HR fully leverages its tech and AI capabilities, often creating its own tech tools. My Career Advisor, for example, is IBM’s mobile in-house career coach created by employees at a company-wide hackathon. Blue Matching serves IBM employees with notice of new internal job opportunities tailored to their qualifications and aspirations.

What you can do: Technology and automation are central to the transformation of HR. Yet, no two companies’ technological and data capabilities are alike. Choose your tools wisely, develop technical expertise internally, or borrow your experts. Do not overspend on systems unless you understand how they will deliver.

10. Integrate tools, platforms, and processes with employee experience in mind. IBM’s case shows how to bring all processes, tools, and platforms together into one renewed talent ecosystem. “It’s not about having a learning platform and…an internal jobs platform,” noted Joanna Daly, IBM's vice president of global talent; it’s how they integrate together with AI-enabled advice for employees to explore what jobs they should do next.

What you can do: No matter where you decide to start, integration should be your final destination.

IBM’s case could be the timely accelerator of your own company’s HR transformation. There is a lot to learn here, but no one’s “best practice” is a replacement for your own discovery. The best lesson to learn from Diane Gherson and her team is their innovative attitude and openness to experiment in the face of the unknown. Learning to innovate, take on risks, and show courage is what IBM’s HR has shown us how to do. It is now the right time to take the right lessons from IBM and apply them and scale. Best of luck as you begin.

Anna A. Tavis is a clinical associate professor of human capital management and academic director of the human capital management program at New York University. She tweets @annatavis .

About the Authors

David Kiron is the executive editor of MIT Sloan Management Review ’s Big Ideas Initiative, which brings ideas from the world of thinkers to the executives and managers who use them.

Barbara Spindel is a writer and editor specializing in culture, history, and politics. She holds a Ph.D. in American studies.

Contributors

Carrie Altieri, Michael Fitzgerald, Jennifer Martin, Allison Ryder, Karina van Berkum

Acknowledgments

Joanna Daly, vice president, global talent, IBM

Diane Gherson, chief human resources officer and senior vice president, human resources, IBM

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JOSH BERSIN

Insights on Corporate Talent, Learning, and HR Technology

• HR Technology / Talent Management

The Evolving Role Of IBM In The HR Marketplace

by joshbersin · Published December 30, 2020 · Updated December 31, 2020

As we enter 2021 and look at all radical changes in work, technology, and HR, it’s time to reflect on where we are. The world is responding to the Pandemic, technology is advancing at an incredible rate, and we are literally reinventing the workplace in real-time.

It also means that HR technology and HR organizations have to be fully integrated into the company: Employee Experience touches facilities, legal, IT, finance, as well as HR. So our job as HR leaders has been expanded this year, and we need technology partners that can see the big picture.

And now it’s even more important: in the middle of this change, as I discuss in the HR Technology 2021 Report , HR Tech is merging with WorkTech.

Suddenly we live our lives in video conferencing tools (witness the growth in Microsoft Teams , Salesforce’s acquisition of Slack , a major new release of WebEx , the growth of Workplace by Facebook)  and messaging, team management, document management, and knowledge management are hot. In fact, the whole world of HR Tech is evolving into WorkTech , and there’s nothing we can do to stop it.

For those of us in HR, the traditional “talent management” platforms are being replaced. We have new integrated systems for employee feedback and self-development, smart systems to facilitate internal mobility (the Talent Marketplace segment), AI-based candidate and job matching systems, and amazing tech for learning in the flow of work , safe workplace monitoring , performance and goal management , and more. I feel like the entire tech stack at work is being disrupted, and it’s all focused on Employee Experience first.

Well IBM, one of the most seasoned technology companies in the world, is now heavily focused in this area. I spent the last two years collaborating with IBM on a research study we call HR 3.0 , and I’ve come to understand a lot about the company’s offerings. So I wanted to take some time to explain.

IBM Has A Deep History in Talent and HR

It’s important to understand that IBM, as an organization, deeply understands HR. I worked for the company in the 1980s and their talent practices formed the foundation of my career. The founding culture of IBM (going back to Thomas Watson ) was based on developing people (hiring, training, developing, supporting) better than any competitor. And this focus has helped the company reinvent itself again and again.

Back in 2008 we invited Ted Hoff , a senior HR leader at IBM, to speak at our first customer conference. Ted showed us how IBM had developed a personalized platform for continuous learning , a system for personalized micro-learning, and how the company built a global talent model that used data to drive development, mentoring, and career guidance for 300,000+ employees. They were a decade ahead of the market.

Since then, under the leadership of CHRO Diane Gherson (now retired) and new CHRO Nickle LaMoureaux , the company has pioneered many of the most innovative talent practices in the world. Not only does IBM use AI (Watson) for amazing things, IBM pioneered many of the “future of work” practices we all dream about.

• IBM pioneered agile performance management over a decade ago and crowd-sourced the ongoing design,
• IBM uses AI-based data to identify skills and market demand for employees, making all pay “market-based,”
• IBM uses AI-based matching, career assessment, and candidate assessment to recommend jobs to candidates and internal staff,
• IBM has a broad global network of social communication tools and can spot harassment or employee issues anywhere in seconds,
• IBM developed its own internal social network (Blue Pages) before Facebook even existed and connects employees to projects, opportunities, and learning directly,
• IBM’s HR team includes dedicated data scientists, chatbot developers, UI designers, and engineers to build world-class solutions.

I worked for IBM in the 1980s and this is a company that “builds what it needs” with no fear of trying something new.

Under Diane’s leadership (and I know Nickle feels the same) the company continuously tries new ideas, pioneers experiments, and quickly iterates on HR solutions – which range from “work at home” to “satellite office” to new practices for pay, rewards, vacation, and just about everything else.

And all this is built around its culture.

During my decade at IBM I was always treated with respect (I was a systems engineer and sales and marketing manager) and became engrained in a culture that focused on people and customers above all else.

Yes, IBM has been through a lot of change (selling off the PC business, exiting the proprietary networking business, transforming the mainframe business, pioneering investment in AI, and now acquiring RedHat to become a leader in hybrid cloud), but despite these changes, the culture of “solving business’s most complex problems” remains. And this would not be possible without a continuous investment in people.

IBM’s History In the HR Marketplace

Led by IBM’s relentless focus to invent, IBM invested in Workday, Saba, Slack, and many advanced HR technologies internally. And every time IBM went out and acquired a new platform, the company built new services, interfaces, and integrations on top. The IBM YourLearning system (which probably has roots in Ted Hoff’s project) is one of the most advanced, predictive learning systems in the world. It grew out of years of design and development designed to help IBMers build new skills, find peers and mentors, and improve their careers in the company.

When cloud HCM took off, IBM’s services organization rapidly built a business around the implementation of Workday, SuccessFactors, and Oracle. Today IBM is one of SAP’s largest implementers and continues to be a leader in Workday and Oracle projects as well. Not happy to just “implement” these systems, the company built vertical solutions, employee-experience add-ons, and an entire platform ( The IBM Talent Platform ) of AI services that can be added to any solution.

In the 2000s IBM acquired Kenexa ($1.2 Billion), and amassed a set of consultants and IP in employee assessment, skills taxonomies, and recruiting. This helped IBM grow its outsourcing business and eventually resulted in the new IBM Talent Platform , a set of plug and play AI-based technologies that can automate almost any part of HR. 

Originally the company tried to sell these offerings as standalone solutions: now it is all integrated and customers can buy any part of the IBM Talent Platform to address their most urgent needs. 

Moving From A World of “Buy” to “Integrate”

We are now in a world where all the “systems of work” have to fit together. While vendors focus on each independent area of HR, the problem is ultimately the Employee Experience, so we need a consultant that can help put all the pieces together. 

Suppose you’re a company and you buy Workday, SuccessFactors, or Oracle as your core HCM. You probably want an AI-based recruiting portal, globalized recruitment and onboarding process, a set of career and development tools, and also a real-time mobile app that helps employees schedule their work location, attest to their health and infection, and submit cases and questions on their pay, rewards, and wellbeing benefits. Good luck doing this with one vendor – it’s impossible.

Along comes IBM. As with other systems integrators (Accenture, TCS, Deloitte, PWC, E&Y, and others), IBM understands how all these systems work, and can likely show you industry examples and industry solutions where they’ve built “just what you need” before.

But there’s more under the covers.

Since IBM, at its core, is a software and technology company, the company can build “Intelligent Workflows” on top of these applications, designed to give you the custom experience you need. I remember my years at IBM decades ago when IBM pioneered the ideas of online transaction processing, two-phase commit, and intelligent user design. Well, the company has done this again, and now can build secure, data-driven, AI-powered “workflows” that turn all these off-the-shelf products into a customized, integrated solution.

But wait, you may say. I don’t want a bunch of custom stuff – I want off-the-shelf cloud solutions so I can avoid lots of effort.

Well actually that’s no longer the right strategy – every vendor is tweaking and working on their product roadmap, so you need an employee experience that’s INDEPENDENT of the vendor you choose. Yes of course ServiceNow and the HCM vendors will argue that they do have everything you need – but in reality, your EX is up to you, and IBM can help you build just what you need.

Intelligent Workflows: A Few Examples

Let me give a real-world example.

One of the world’s largest insurance companies hires more than 20,000 people per year. They hire customer service agents, nurses, medical practitioners, analysts, business professionals, and a wide variety of technology people at a rapid rate. Each time I meet them they come up with innovative ideas for sourcing, internal talent mobility, employee performance measurement, and more. And as the US healthcare industry keeps changing, they are relocating service centers on a regular basis.

Some years ago this company hired IBM to help, and IBM built what is now called the “ Precision Talent Model ” for hiring. This solution, which uses Intelligent Workflows and AI, enables recruiters to immediately see bottlenecks in high volume or high scarcity recruits. It monitors the entire process and sends alerts if an offer letter is late or a hiring manager has fallen behind. With tens of thousands of candidates flowing through the process, Precision Talent has real-time dashboards that let the company monitor the entire process in real-time. And the candidates gain the benefits of an AI-based conversational chatbot, career advice, and excellent job applicant experience.

Since hiring IBM to build this solution, the company has seen a 40% increase in hiring manager satisfaction, 66% improvement in candidate experience, and 30% reduction in time and cost to hire. And in 2020 the volume has been massive.

Could this company have done this alone? Probably not. Behind the scenes, there are applicant tracking systems, candidate marketing systems, intelligent assessment systems, and tools for selection, background checking, and process management. All this is integrated and engineered by IBM using Intelligent Workflows: IBM serves is the architect, general contractor, and service provider for this work.

Let me cite a second example.

As you probably know, there is a massive interest in reskilling, internal mobility, and what we now call “internal talent marketplaces.” I’ve written about the “ War of the Skills Clouds ” and vendors like Workday, Gloat, Fuel50, Cornerstone, Degreed, EdCast, Eightfold.AI, PhenomPeople, and dozens of others are jumping in. Some of these vendors are LXP vendors moving into talent mobility; others are talent marketplace vendors adding features for coaching and development; and others are LMS or learning vendors moving into career solutions. It’s a confusing and rapidly changing mess.

Along comes IBM. IBM has solved this problem internally. Inside IBM there are systems that infer your skills (IBM goes beyond the resume and uses more than 22 sources to figure this out), assesses your skills and skill depth, and constantly looks at new skills in demand.  IBM then uses digital badges and personalized learning to keep the workforce current.

Through its acquisition of Kenexa, IBM acquired what is now called IBM Talent Frameworks, one of the most complete job-competency models in the market. It lets companies build a career marketplace and AI-driven career management solution from experience, not by starting from scratch. While the company doesn’t promote it as a “product,” it is embedded in career management solutions IBM can build.

Redesigning HR Service Delivery

Finally, let me mention IBM’s enormous experience in HR outsourcing and HR Service Delivery. Today IBM outsources the HR service delivery, recruiting, and ongoing employee care for some of the world’s biggest companies. This business started years ago when one of IBM’s biggest insurance clients wanted to go through a cost reduction. 

In the process of doing this, IBM developed a massive set of workflow rules, chatbots, and self-service systems to help in every aspect of EX service delivery. The company’s Cognitive and Virtual Agents for HR are well refined and ready to go to work for any company. And IBM has productized its internal communications platform (called Social Pulse last I saw it) so you can set up an internal “listening” solution as well.

In many ways IBM has redefined the role of a “systems integrator” to that of a “general architect” that can bring together platforms to deliver an integrated solution. And the timing for this could not be better: in 2021 companies are going to accelerate their plans for the Safe, New Workplace, so we all need to do this now.

IBM Is Here To Stay

Of course, IBM has lots of smart competitors. TCS, Accenture, Deloitte, E&Y, and PwC are also very focused in this area.

But as the WorkTech market continues to expand and the ever-increasing focus on Employee Experience becomes urgent, IBM is in a strong position to thrive. Remember this is a company that survived decades of disruption and invented many of the IT technologies we use today. Their evolution in the world of HR has been impressive, and I believe they will grow in the year ahead.

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IBM Case Study – Changing HR Operating Models & Technology to Improve Productivity

Feb 24, 2021

HR operating models are at the centre of all good, functioning HR organisations and indeed all good businesses in general. Yet, traditional HR operating models are constantly trying to balance two ‘value agendas’ and often struggle to meet both effectively as a result.

The two main ‘value agendas’ of HR organisations are running an effective back office (bottom of the model) and enabling people productivity and engagement (top of the model). However, despite the top of the model fostering productivity and creating the most long-term value, most HR professionals will tell you that they spend most of their time at the bottom of the model, trying to save money.

IBM’s HR Journey

IBM were one of the first companies to realise this inherent challenge. Back in 2005 they embarked on a journey to change their HR operating model to help relieve some of the pressure from this internal need to get the right people, in the right place at the right time.

I was lucky enough to be brought on board to IBM in 2006 as an executive to lead their global human capital consulting practice and helped the company throughout their HR transformation journey.

Following IBM’s acquisition of PWC Consulting, a new unit was created – IBM Global Business Services. This new unit comprised of more than 60,000 IBM and 30,000 transferring PWC consulting professionals. At this critical new stage in the business, IBM decided to make getting the right people in the right place a critical strategic imperative.

Indeed, in order to acquire value from this acquisition and make this new organisation thrive, IBM had to change their HR operating model alongside developing new HR technology. The two had to be combined to create a single source of truth for HR data across the company.

During our initial strategy stages, a new HR operating model began to emerge with some key considerations in mind:

• Decentralising HR operations across different lines and regions of the business
• Expanding shared service centres into local regions and automating HR administration where possible
• Managers taking on more responsibility for talent management – getting the right people, in the right place at the right time

Whilst these questions may seem like the norm now, it was revolutionary in 2005 for such a large company to be considering such a fundamental shift. At that stage, most companies had a semi-centralised HR department, responsible for most of the talent management. Still, fast forward to today, and most organisations have yet to make this shift.

Indeed, undertaking any sort of HR operating model can be a huge task even in 2021. It requires valuable time from leadership, as well as line managers who will need to develop skills or tools to handle new responsibilities such as performance management, learning, succession, recruitment, compensation, staffing and more.

Push back from the line managers was one of the key challenges that we faced at IBM. Their previous HR tools were clunky, inflexible and unintuitive. At that point only SAP HR, Peoplesoft and other similar highly customised, on-premise software systems were available. Additionally, people weren’t as akin to software as they are now thanks to the rise in people’s personal relationships with social media.

So, not only did IBM need to create new HR technology, but they also had to make the software easy enough to use across the board, particularly for line managers taking on new responsibilities.

The way that we combatted this task was first organising the new HR operating model and then developing the HR technology and tools to meet the requirements of that model. This way, the IT was moulded to fit the needs of HR and not HR moulding to fit the needs of technology.

Indeed, there was some resistance in senior management to the new technology we were developing at IBM. Their concern was the need to focus on executing day-to-day business if we were asking line managers to take on more responsibilities whilst using clunky tools and technology. Fair enough!

We needed to get them on board by creating new technology that would show them the future of getting the right people in the right place and making the managers better managers through these new talent management duties.

The HR team worked with top designers from the internal IT team mocking up a prototype with our operating model motto (right people, right place) at the core. Our aim was to create one internal site that would bring together performance and goals management, staffing and employee collaboration. Managers could use it to manage talent and employees could use it to access a personal development platform.

We then showed this prototype to senior management, to demonstrate the new HR technology and how it would work to make their lives and meeting business needs easier, rather than harder. The session was ultimately a success because they could see that we had built this technology in line with the new HR operating model to meet the business needs, and make the job of people development easier for them

Whilst there are now lots of examples of HR operating models and technology working together seamlessly, this was simply not the done thing at the time. Technology has made great advancements since then thanks to the scalability of cloud enterprises, but what IBM were working on in 2005 was really an early version of what SuccessFactors and Workday platforms would become just a few years later.

Whilst we now have these options, it is still important not to be swept away by HR technology. As this case study with IBM proves, you need to remember that any new HR operating models should be developed first and then consider how tools and technology can be incorporated to meet those needs.

To learn more about developing HR operating models that get the right people in the right place at the right time, take a look at my book Solving the Productivity Puzzle .

Photo Credit: Carson Masterson , Mikita Yo and Cytonn Photography

JULY 19TH 2022: TOP HR MOST INFLUENTIAL THINKERS 2022:

Tim named to the list of HR Most Influential Thinkers. HR Most Influential is an annual list that celebrates the most influential players in the field of people strategy.

Tim has over 30 years' experience as an executive in the HR Consulting and HR Software industry. He has architected and led some of the largest and most successful HR IT and change programs in North America, Europe, Asia and the Middle East.

He began his career in Andersen Consulting (now Accenture) in 1990 where he was Managing Director, in Accenture’s Talent and Organization, Service Line. In 2006, he was recruited to IBM Global Business Services where he led IBM’s global Human Capital Management (HCM) consulting practice.

He was most recently Vice President of SAP SuccessFactors for Europe, Middle East and Africa. He led SuccessFactors’ HR Advisory teams across the region.

Additionally, he is on the Board and Non-Executive Director of Optunli an HR solution providing a unique approach for strategic workforce planning. Tim is a Chartered Fellow of the CIPD (FCIPD).

MAY 25TH 2021: SOLVING THE PRODUCTIVITY PUZZLE IS CATEGORY WINNER:

Business Book Awards 2021 – HR & Management at the Business Book Awards. See Business Book Awards 2021 winners announcement, click here.

• Corpus ID: 107360360

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For this article, I have collected 15 of the best HR analytics case studies I’ve come across in the past two years. Each of these case studies are connected with a concrete business impact. For each case study , I will refer to their original publication. 15 HR Analytics Case Studies .

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Not as interesting as the Disney case study though. I found the session by Edward Bryan from IBM on Smart Cities more interesting – and there’s an obvious link here to the Smarter Workforce.'

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We''re not IBM or Google Forget what they say - it''s great, but it doesn''t apply to the rest of us. Most current case studies are rubbish, and that tells us something! I think it''s because of these concerns that most (make that nearly all) case studies I read on analytics leave me completely underwhelmed.

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This is what IBM did bringing in their second top person in SCM to design their approach for talent – including a governance model for skills etc. Book review Case study Events HR measurement Innovation' For example, we need to learn from Supply Chain Management how we can improve the supply chain of talent.

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He makes the comment in particular relation to a case study of Deutsche Telekom introducing job families to support succession management. Rather, it is a rigorous science based on solid numbers.” It’s complete nonsense of course, and I don’t understand how Boudreau gets away with it. But a rigorous science???!!! I think not.

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And I’m largely unimpressed by the book’s case studies . However, there are some good examples too, eg I liked the CORP case study which concerns a case where measures showed a negative relationship between performance of the supervisors and the sales of a team, and a positive correlation between sales and team turnover.

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On most topics in HR I''m pretty sure what I believe, and although I do sometimes shift on this slightly, my learning tends to be more about how I argue my position, and case studies , pro and con, etc. However there are a few other topics I find I touch a lot but don''t feel as confident in my perspectives.

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However Phaedra suggested that IBM try to create a ''social wrapper'' to help people apply their learnings from games into work. And to have had some case studies on this, rather than just ones on serious gaming (other than IBM which is many miles ahead of where most organisations are looking.) for avoidable blindness.

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His research focuses on case studies of companies that successfully deliver results on their talent and learning transformation projects. Recently large companies such as IBM , GE, Adobe, Microsoft, Expedia, Motorola, and Juniper Networks have eliminated doing traditional employee performance ratings.

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I learned about this app roughly 18 months ago and we recently wrote a case study on this platform. So I'm surprised that Salesforce aren't pitching at conferences like HR Tech World as part of a new Big Four (or perhaps along with IBM Kenexa and Watson Talent Insights as a Big Five).

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A great example of a proactive organization is IBM . This could include partnering with select schools (like IBM mentioned above), creating internship and graduate hiring programs, and also internal capability development. They’re cultivating relationships with potential candidates early on to attract them after graduation.

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In this blog, I share six key takeaways from the 1 st -day sessions, case studies , and demos, in which I attended. It only makes sense that I would look for a case study that demonstrates exactly that. #2. The case studies of Siemens were great examples of an organization that acts today to be prepared for the future.

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I decided to mention the women behind amazing case studies in the field of People Analytics. The project was mentioned as one of the top 10 HR & People Analytics articles in a monthly list of IBM ’s David Green. Within a few days this project was out of control. I could not believe how viral it went.

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There are also other benefits, as IBM found when they surveyed 675 CIOs and IT managers across multiple industries worldwide. Their study finds the most successful companies at creating a flexible environment are reporting a 20% increase in productivity and cost savings.

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IBM Global Talent Management Strategy Case Study

User Generated

npunaqyre04

Business Finance

Description

You will use a SHRM case study, IBM'S Global Talent Management Strategy, to complete this assignment. If you have not already done so, download and read this case study using the link provided in this unit's studies.

By successfully completing this assignment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

• Describe the HRM and human capital indicators that suggest needed changes in IBM's talent management decisions.
• Analyze the case study's evidence supporting improving IBM's talent management .
• Articulate personal views for or against improving IBM's talent management.
• Assess whether a non-HR leader and an HR leader would support the same talent management decisions.
• Communicate in a manner that is scholarly, professional, and consistent with expectations for members of the human resource profession.

Assignment Description

As an HR practitioner working for IBM, use the case study to outline the following in an executive summary:

• Analyze the case study's evidence supporting improving IBM's talent management.

Be sure to communicate in a manner that is scholarly, professional, and consistent with expectations for members of the human resource profession.

Submission Requirements

Follow these submission requirements:

• Written communication: It should be thoughtful and free of errors that detract from the overall message.
• APA formatting: Resources and citations are formatted according to current APA style.
• Number of resources: There is no minimum number of resources.
• Length: 3 typed, double-spaced pages.
• Font and font size: Times New Roman, 12 point.

Unformatted Attachment Preview

Explanation & Answer

I noticed a few typos so this is an edited final copy with Works Cited. Thanks! Human Resource Issues Evident in Global Talent Management Strategy When Sam Palmisano envisioned IBM Corporation as a “Globally Integrated Enterprise”, he knew that HR director Randy MacDonald would have serious work to do to repair the Human Resource issues that plagued the company since they almost had to file bankruptcy years ago. The 2007 IBM Institute paper that is referenced in the case study make clear the matters of concern. (Boudreau, 2010) I completely agree with the plan IBM has mapped out for adapting to an ever changing world and it must be done as soon as possible. Wide spread changes in the demographics both nationally and overseas have put pressure on both government and business to create new ways to inform, integrate and maintain a quickly changing and diverse workforce. As the demographic of the workforce alters, their needs and requirements change too. It is crucial that IBM Human Resource executives understand what is most important to their workers and become much more aware of the technical transitions that need to be made to keep them competitive in the global market. There were several inherent problems in the way they were currently doing things that has to be changed. Utilization rates in the service population was of primary importance and service delivery issues had been an ongoing problem. There was no cohesion in the ...

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All press releases

Telefónica Tech and IBM Sign a New Collaboration Agreement to Drive the Development of AI, Analytics and Data Management Solutions for Enterprises

MADRID , June 18, 2024 / PRNewswire / -- Telefónica Tech and IBM (NYSE: IBM ) today announced a new collaboration agreement to drive the deployment of Artificial Intelligence (AI), analytics and data governance solutions and respond to the constant and dynamically evolving needs of enterprises. The agreement, initially limited to Spain , establishes a framework of collaboration between the two companies to help their customers deal with the complexity of managing new technologies in a heterogeneous and changing environment and to extract the full value of these technologies in their business processes.

According to findings in IBM Global AI Adoption Index study , almost half of the companies in Spain that are already working with AI claim that they have accelerated their investments in this technology in the last 24 months. This highlights the need to provide the business landscape with tools and solutions that drive their digital transformation journeys, in which AI plays a prominent role.

Through this new collaboration, the companies will work together on the development and deployment of an open, hybrid and multi-cloud platform, specializing in data management and AI to facilitate and accelerate business initiatives for customers, a use case office, demonstrations and development of MVPs; and the implementation of resources, training and certifications. Last year IBM launched the watsonx AI and Data platform, which will be at the heart of the collaboration agreement.

Elena Gil Lizasoain , director of the Artificial Intelligence and Data business unit at Telefónica Tech, said: "This new collaboration with IBM will help drive the many benefits of Artificial Intelligence, traditional and generative, and proper data management in the business world. By combining the knowledge of both teams, we will continue to advance in the construction of use cases aimed at creating more efficient and sustainable businesses."

Adolfo Hernández Pulido Technology Managing Director for Telefónica at IBM added: "This collaboration is another step in our long history of working with Telefónica Tech. Together, we are accelerating the digital transformation of the Spanish business community, enabling the development of innovative technology solutions that will help companies adapt to the AI era. Analytics, data governance and the correct deployment of AI are key elements for today's business success, and we both share the commitment to help businesses achieve it."

Technology and co-creation to provide answers to real business needs

Telefónica Tech and IBM will launch a use case office, made up of highly qualified professionals from both companies, to promote and coordinate the definition and development of use cases, proofs of concept, and MVPs to accelerate business development and further showcase the value available to clients through the use of these technologies.

IBM Client Engineering, the IBM team that helps solve business challenges through co-creation and innovative work with experts, will play an important role in the use case office, as will the Telefónica Tech professionals who brings extensive technical knowledge and experience in the implementation of AI in the business sector.

The collaboration is already providing generative AI solutions to its customers that include code generation for IT applications, automation of processes and incidents, cognitive assistants in industrial operations, advice and customer service, analytics, processing and management of audiovisual content and text documents.

IBM and Telefónica Tech have a strong history of collaboration that includes hybrid cloud-based solutions, such as TROS, Telefónica Tech's multi-cloud service based on RedHat OpenShift; integrated AI for the creation of virtual assistants to improve customer service; and optimized supply chain management to increase the traceability of business assets with blockchain. This joint effort is the next step in the fruitful relationship in which both companies continue to drive innovation and digital business transformation through the implementation of cutting-edge technologies.

SHARK.X, the new platform to drive end-to-end AI deployment

SHARK.X, a new and innovative open, hybrid and multi-cloud platform that hosts different IBM hardware and software components, with access to IBM Cloud and other clouds, where the native hyperconverged IBM Storage Fusion HCI infrastructure for running enterprise applications stands out, will be deployed in Telefónica Tech's La Cabina facility, which is Telefónica's technological inspiration centre for the digital transformation of companies and public administrations.

Telefónica Tech will provide specialized professional services to define the most appropriate deployment architecture for each customer and integrate the solution into their environment, as well as ingest data from different sources and develop artificial intelligence use cases aimed at addressing their business priorities. It will also provide advice in the field of data governance and artificial intelligence models and in the field of regulatory and ethical compliance, which is especially relevant with the new regulations approved in the European Union.

At the software level, SHARK.X will include several IBM technologies that will cover the entire value chain associated with enterprise data management, analytics and management of enterprise data. SHARK.X will host IBM Cloud Pak for Data to enable data collection, organization, analysis and governance; it will include the IBM watsonx AI and Data platform to build, deploy and scale AI applications in a simple, secured and governed way; as well as Cognos and Planning Analytics, which enables collaborative business intelligence, planning and reporting solutions.

With these capabilities, the SHARK.X platform will address both traditional and generative AI initiatives and address end-to-end data governance and management while providing a Lakehouse as a robust enterprise data management solution, helping address data security and protection, and delivering business intelligence, planning, optimization and reporting.

About Telefónica Tech Telefónica Tech is the leading company in digital transformation. The company offers a wide range of services and integrated technological solutions in Cybersecurity, Cloud, IoT, Big Data and Blockchain. For more information, please visit: https://telefonicatech.com

About IBM  IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. More than 4,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.

Media Contacts:

Miguel Gimenez de Castro [email protected]

Clare Chachere [email protected]

• IBM-Telefonica-Tech

Release Categories

• Artificial intelligence
• Hybrid cloud
• Research and innovation
• Social impact

Additional Assets

The rise of generative AI has surfaced many new questions about how the technology will impact the workforce. Even as AI becomes more pervasive in business, people are still a core competitive advantage. But business leaders are facing a host of talent-related challenges, as a new global study from the IBM Institute for Business Value (IBV) reveals , from the skills gap to shifting employee expectations to the need for new operating models.

The global skills gap is real and growing . Executives surveyed estimate that 40% of their workforce will need to reskill as a result of implementing AI and automation over the next three years. That could translate to 1.4 billion of the 3.4 billion people in the global workforce, according to World Bank statistics . Respondents also report that building new skills for existing employees is a top talent issue.

AI’s impact will vary across employee groups . Workers at all levels could feel the effects of generative AI, but entry-level employees are expected to see the biggest shift. Seventy-seven percent of executive respondents say entry-level positions are already seeing the effects of generative AI and that will intensify in the next few years. Only 22% of respondents report the same for executive or senior management roles.

AI can open up more possibilities for employees by enhancing their capabilities. In fact, 87% of executives surveyed believe employees are more likely to be augmented than replaced by generative AI. That varies across functions – 97% of executives think employees in procurement are more likely to be augmented than replaced, compared to 93% for employees in risk and compliance, 93% for finance, 77% for customer service and 73% for marketing.

Employees care more about doing meaningful work than flexibility and growth opportunities, but leaders aren’t always in lockstep with their needs . With AI primed to take on more manual and repetitive tasks, employees surveyed report engaging in impactful work is the top factor they care about beyond compensation and job security—more important than flexible work arrangements, growth opportunities and equity. On top of that, nearly half of employees surveyed believe the work they do is far more important than who they work for or who they work with regularly.

However, employers seem to have missed the memo about what matters. Executives surveyed said impactful work was the least important factor to their employees, instead pointing to flexible work arrangements as the most important attribute beyond compensation and job security.

The world of work has changed compared to even six months ago. Leaders are starting to believe that the enterprise of tomorrow may not be able to run with yesterday’s talent—and tomorrow’s talent may not be able be rely on yesterday’s ways of working.

The world of work has changed compared to even six months ago. Leaders are starting to believe that the enterprise of tomorrow may not be able to run with yesterday’s talent – and tomorrow’s talent may not be able be rely on yesterday’s ways of working.

HR leaders can play a critical role in how organizations adapt to the changes driven by generative AI. These leaders can be at the helm of navigating these challenges, redesigning work and operating models to shepherd their organizations into the future. Here are a few actions to consider.

• Redesign the work, leading with the operating model. Automating bad processes won’t make them better. Rather than automating the same activities you’ve always done, go back to the drawing board to find a better way forward. Process mining can analyze how work is done and where bottlenecks or other inefficiencies exist. From there, you can re-think and re-engineer how work gets done, identifying tasks where AI or automation can be applied to free up employee time for higher value tasks where their touch is critical. For example, IBM’s HR team re-examined the highly manual and data-intensive quarterly promotions process, applying a custom watsonx Orchestrate solution to automate data gathering and thereby empowering human staff to devote more time to high-value tasks.
• Invest in talent as much as technology, preparing the workforce for AI and other technology disruption. This is a pivotal moment for HR leaders to step up to help define the organization’s transformation strategy and how people—and AI—will combine to deliver it. HR leaders will drive workforce planning, design and strategy like defining higher-value work, identifying the critical roles and skills of the future and managing hiring, shifting people into new roles, retention and more. That can include reviewing roles, identifying and eliminating repetitive tasks that can be handled by AI, merging roles to create new roles, expanding roles to include tasks like applying or managing AI tools, and creating targeted skill development for the higher-level tasks driven by people.
• Put skills at the center of workforce strategy—for today and for tomorrow . Leaders should be thinking about how to increase the overall technical acumen of the workforce. That can serve as a broad foundation upon which employees build new skills, such as how to work creatively and responsibly with AI. That doesn’t mean every employee will have to learn how to code–but most will have to familiarize themselves with new AI solutions. It’s very important for employees to have a basic understanding of AI and its capabilities so they can be both critical thinkers and users of the technology. Everyone should be empowered to ask questions about models’ training data, how it came to its predictions, potential biases and more. Technology can help with skills and career development too. Interactive career roadmaps with dynamic prompts can help employees see what’s expected for them to progress. At Delta Airlines, IBM Consulting implemented a skills foundation and a talent platform that enabled their IT workforce to upskill into critical new technologies. The future pipeline of talent is an important consideration too. The global AI skills gap is an urgent need facing many companies today across industries, and this will require strategic investments.
• Give jobs more meaning by putting the employee in the driver’s seat . AI has the potential to transform the employee experience. It can automate repetitive tasks, letting people focus on what they are passionate about, freeing up their time for skills development or work-life balance, and potentially create exciting new job roles and career paths. It’s important to engage employees in this process. For example, give teams a forum to recommend tasks that could be automated to make their jobs easier and more fulfilling, leveraging digital channels for a continuous and open feedback loop. This kind of openness to feedback and company-wide growth mindset can also help develop your next generation of leaders. Cultivate an environment where leaders at all levels are encouraged to bring new ideas and creatively apply technology within their roles.

We’re at a pivotal point in the world of work and there’s a massive opportunity in front of HR leaders, but there are risks as well. As businesses further embrace AI, successful change will only come if organizations—by way of HR leaders—prioritize a new approach to talent and operating models where people and technology come together to boost productivity and drive business value.

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