Building a Better Workforce

What technology can (and can't) do to help companies optimize their most valuable asset.

Another goal is to spend the company’s annual $800 million training budget more wisely. Having hashed out a “common taxonomy” that reduced 10,000 hazily defined job roles to just 524, IBM creates a profile for every employee based on a primary role, a secondary role, and information about other skills the person may have. This allows the company to assess which employees are ripe for “up-skilling.” If it anticipates, say, a sharp rise in the need for open-source programmers and can identify high performers in roles that may soon be obsolete, it can give them priority in training. That way, the company hangs on to good people and is spared the expense of competing for talent in the open market.

Such efforts also demonstrate good faith on the part of the company. “There was some concern when we started that employees would equate being ‘optimized’ with us squeezing more work out of them and making them feel like cogs in a machine,” says Blake. Perhaps not without reason, given that Blake came to his new post from IBM’s hardware empire and was charged with applying the same supply-chain principles to people that he had previously applied to, well, machines. “Unlike hardware,” he says, “people can learn, so we invest in them and improve their skills. In fact, we have researchers who are studying ‘optimization algorithms,’ or how to get a person from point A in their career to point B as effectively as possible.”

Randy MacDonald, IBM’s senior vice president for human resources, says that as companies apply new kinds of technology to HR issues, they must also apply new measurements. “The CFO gets to see the CEO faster than anyone else,” he says, “because he or she can show a series of metrics. HR is now doing the same.” Some of those metrics are old hat, such as time to hire, attrition rates, and revenue per employee. But increasingly, HR departments are looking at other facets of the labor market. IBM, for example, looks at everything from the percentage of summer interns who sign on for full-time work to a rolling three-year forecast of anticipated labor needs. HCM software companies have added various metrics capabilities to their products, or partnered with business-intelligence firms that offer a range of “workforce analytics” applications.

Some Employees Are More Equal than Others

Once companies identify top performers, they shouldn’t hesitate to treat them accordingly. Matt Brush, director of human-capital planning at Corning (which uses HCM software from Softscape), says that as part of its efforts to make a more strategic contribution to the enterprise, the HR department should take a portfolio approach to managing talent. “Every job is not equally important,” he says, “and every employee shouldn’t get an equal slice of the training budget. You need to identify the roles and the people who are most influential to your success and invest the most in them.”

The “all employees are not created equal” message is sometimes anathema to HR executives, but it reflects a new pragmatism taking hold at many companies. Advance Auto Parts, a retailer with more than 2,500 stores in North America, began to “recalibrate” its workforce three year ago in response to poor performance.

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