This High-Tech Company Is Using Artificial Intelligence To Hire, Fire And Promote Employees
Ginni Rometty is CEO, president and chairman of IBM. She has held the top job since 2012.
When she joined the company in 1981, total headcount across IBM was roughly 350,000. By 1994, under the direction of CEO Lou Gerstner, headcount dropped to around 225,000.
When she took over as CEO from Sam Palmisano—who had enjoyed a ten-year run as IBM’s top dog—the global employee population at the company had swollen to nearly 450,000 people. Some of it was organic. A lot of it was by acquisition.
Today and under Rometty’s leadership, IBM headcount has dropped approximately 25%. There are now less than 350,000 people. How? In part, artificial intelligence.
Rometty recently spoke at a CNBC event titled “@WORK TALENT + HR: Building the workforce of the future.” It’s her comments that got me thinking about the impact that artificial intelligence is going to have on an organization’s HR strategy and employee population.
First, Rometty indicated that 100% of all jobs will be impacted by artificial intelligence.
I agree. Every role in the corporate hierarchy will in one way, shape or form be affected by the introduction of AI over time. She went on to say that job losses as a result of AI is a “red herring” and that we really shouldn’t “follow that logic all over the place.”
Not so fast.
There are millions of people in need of retraining and reskilling as a result of AI. If they aren’t at least partially taken care of by the organization, society will be overrun by people wondering what happened to them. It will become a zombie-like apocalypse of people wandering the streets looking for work.
In Rometty’s defense, she pointed out to audience members that organization’s ought to be considering three tactics to help with the transition to AI:
- Retrain current employees;
- Embrace people with less than a four-year degree;
- Reskilling employees by apprenticeships.
Somewhat ironically, however, Rometty indicated that skills were going to become the lifeline of an employee’s relevancy. “If you have a skill that is not needed for the future and is abundant in the market and does not fit a strategy my company needs, you are not in a good square to stay inside of,” Rometty said. “I really believe in being transparent about where skills are.”
Again, transparency is one thing but helping employees with their transition under the shadow of AI, in my opinion, has got to be one of the organization’s top strategies going forward.
By example, IBM has reduced its global HR workforce by 30% through the introduction of AI into the company. But did it do anything to help those who were packaged out to learn a new skill?
Perhaps it did and those HR employees simply decided to leave. After all, Rometty suggested that transparency is key to IBM’s workforce planning and skills gap. She also said that the AI that’s in place “infers” through the analysis of data, networks, relationships, skills, rankings and education what jobs are possible for internal candidates.
Maybe Watson felt those HR employees at IBM just didn’t have it in them to take on a new role.
That being stated, Rometty’s love for HR and the potential benefits of AI is demonstrable.
She alluded to other traditional HR systems being uprooted by AI for the better. MYCA—IBM’s internal career platform called My Career Advisor—no longer acts as a self serve system; instead the AI proactively recommends jobs to you based on skills, tenure, project work, rankings, and so on.
The company’s learning management system has become the “Netflix of Learning,” again proactively recommending courses and skill upgrades based on your progress at the company.
In an apparent knock to the antiquated way that HR organizes itself, Rometty believes that HR has got to become employee centric. “We have to do things for employees not to employees,” she said. She wants to see co-creation become a large part of its culture.
She wants companies to move away from centres of excellence to solution centres. Perhaps we should be thinking about pop-up solution shops. Using agile skills and collaborative team processes, these pop-up solution outfits allows her teams to come together for specific HR-related issues rather than the centre of excellence model.
Rometty rightly believes HR should be the role model for agile, AI, design thinking, net promoter score, and putting skills at the center of the organization. She believes it is an underutilized department. No complaints from me on that point.
IBM’s talent strategy also involves the proactive retention of people. Its HR AI system accurately predicts 95% of the time if people might want to leave the company. “It has saved the company over $300 million,” said Rometty, specifically due to proactive retention practices. It’s the artificial intelligence that tipped off IBM executives to take action—be it adding more compensation, skill development or a job change—before the employee might have left.
According to Rometty, this new way of operating at IBM has delivered a 20% bump in employee engagement scores across the company.
It’s still not clear how the changes in HR AI helped those folks in HR itself who lost their jobs due to AI. Irony aside, on the whole, I agree with Rometty.
Artificial intelligence is a must for any HR team if it wants to survive not only the pending talent war but its long-term existence, too. The big question is whether it will put that technology to good use to assist all employees, or will it simply be used to trim costs and total headcount numbers.