IBM optimizes human supply chain

Filed in archive News on January 3, 2006

What do hurricanes and retirees have in common --- besides Florida? They both significantly impact a company's staffing strategy. In the short term, disasters and other scenarios can make it hard to find skilled employees in affected areas. In the long term, "brain drain" is a looming crisis, with companies expecting anywhere from one-fourth to one-half of their workforces to retire in the next 10 years.

In its "workforce optimization" initiative, IBM is taking a supply chain management approach to solving these problems, cataloging skill sets as human inventory and applying the same supply chain technology used for the company's hardware to respond quickly to short-term needs and plan for long-term demands. This approach makes sense, says Bruce Richardson, chief research officer at AMR Research. "As happens in a supply chain, you can find you have too much of one 'product' and not enough of another in the labor chain," he says.

When IBM started the project in 2004, the company saw that the first barrier to development of a common "skills-supply" database was a lack of common language to define skills and job roles --- a "manager" in one division might be a "leader" in another, for instance. IBM developed a skills taxonomy structured on a hierarchy of 500 job roles and skill sets. In the short term, it planned to use that taxonomy and ETL tools to translate skill data into a common language when loading the new database. In the long term, the taxonomy would drive standardization in job descriptions. All 320,000 IBM employees will be identified by mid-2006 and, once subcontractors and suppliers are added, IBM expects to have one million individuals represented in the database.

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