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From hiring to retaining: HR chief explains how IBM went through a ‘Great Revaluation’

Big Blue now rates its employees on just two dimensions—business results and skills—against five earlier, says Nickle LaMoreaux, SVP and CHRO

September 20, 2022 / 11:02 AM IST
Nickle LaMoreaux, Senior Vice President and Chief Human Resources Officer, IBM

Nickle LaMoreaux, Senior Vice President and Chief Human Resources Officer, IBM

Nickle LaMoreaux, SVP and CHRO, IBM, said India is a key market for the company in terms of talent, innovation and clients. Further, the tech major’s talent pool is no longer limited to metro cities but extends to tier-2 Indian markets as well.

When IBM received feedback from its employees that the performance management process needed to be changed, the multinational technology corporation redesigned the entire system and reduced it to two dimensions rather than five: business results and skills.

“These are among the few changes we implemented after the pandemic hit us,” Nickle LaMoreaux, SVP and CHRO, IBM, told Moneycontol. One major shift at IBM is the increased focus on recruitment from Tier II cities and keeping skills as a cornerstone rather than college degrees.

There are drastic skill shortages, particularly in the IT industry, which is only going to get worse, says LaMoreaux: “If you only look at the population that has a degree, you are already narrowing the talent pool.” Hence, this strategy.

As for the rise in voluntary attrition in 2021, LaMoreaux said all IBM is seeing is a course correction—a reset over two years. Edited excerpts:

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How do you see the current trends around ‘The Great Resignation’? What are your key takeaways? 

I don't like the term ‘Great Resignation’. I think what's happening right now is what I would call the ‘Great Revaluation’. Every employee across the industry and certainly here in India, is evaluating where they work when they work, why they work if they even work at all.

The reason I don't like the term is that it gives companies an easy way out. If you assume a resignation is going to happen, then it gives companies the ability to say: "Okay, then we’re just going to put all of our money into talent acquisition and we're going to try to recruit new people." And I think that's not the right answer.

ALSO READ | What IBM looks for in candidates when hiring: Drive to learn, right skills

The right answer is how you retain employees. From my perspective, too many companies are trying to take a one-size-fits-all answer. They read something and they say: "Oh! This company is doing it, then we all must start doing that." We are all starting to be a bit of a copycat of one another.

What we really should do instead is think about the company, its purpose, its culture and how you make money. Because you have to have HR and talent policies that support all of that and that's where we are right now.

How has IBM responded to all these trends since voluntary attrition was higher in 2021 than in 2020, consistent with the overall labour market?

Firstly, here's how I would describe the attrition trends in 2021: I think it's no different. It's industry-wide. If you look at the two-year average, in 2020, attrition dropped dramatically. All we are seeing in 2021 is a course correction, a reset over the two years.

If you look at the two-year average and look at the 10 years before that you'll find it's the same. Some of what we're seeing right now is a little less dramatic than people think it is.

We saw this huge pause in 2020 of people staying and not quitting as we were watching what was happening with the pandemic and then you saw that started to change in 2021. But I think in 2022, you'll see it normalise to different levels.

At IBM, we are doing a lot more around feedback and listening. We just redesigned our performance management system, based on employee feedback. Further, our approach is that flexibility is team and job-based.

Tell us more about how you redesigned the performance management system based on employee feedback…

Before 2015, we had a performance management process that was a force distribution—a Bell Curve—like many companies did. In 2015, we co-created it with our employees. We created five dimensions, which included annual business results, skills and innovation, client success, and what we call responsibility to others.

On this five-year journey, employees were giving us feedback and we decided it was time to take a pulse check. Employees have now given us feedback that five is too many. So, we now rate employees on two dimensions, business results and skills.

The second change we made based on employee feedback is that they didn't want to just do this one time a year, at the end of the year. We now do two: the first half and second half reflection cycle.

And then the third big change was they said, the ratings are interesting, but what's most important is feedback from the manager, the specifics: "What can I do differently? What can I do better? What worked well that I should continue to replicate?"

These are three big changes that we launched at the beginning of the year, in April.

IBM is shifting to a skills-first focus, where college degrees don't matter. How will this strategy work? 

Skills first for us is thinking about and making sure that we are considering talent from all possible channels. There are drastic skill shortages, particularly in the IT industry, and if you look over the horizon, they're only going to get worse.

Some of that has to do with population demographics, and that every company right now is an IT company. If you only look at the population that has a degree, you are already narrowing the talent pool.

The other thing that is interesting is the breadth of other pathways; sometimes in some countries, you might join the military and learn skills in the military. In some countries, there are academic institutions where you may not get a full degree, but you can take coursework. And obviously, with online opportunities that are free around the world, you can also learn and get skills that way.

The biggest example is Python, which is a relatively new skill in the data science field, which 20 years ago, somebody would not have gone and gotten a degree in.

Now, why do I care if you learned Python at an IIT or in the military, or if you taught yourself at night from your home? It's all about, do you have the right skills, and making sure you're not closing the aperture.

How is it working so far?

How fast you go, might depend a little bit on the country, and the access to these other channels. In the US, we started this in 2012, when we removed the four-year college degree requirement from about 50 percent of our jobs. And today, 20 percent of the US workforce at IBM in hardware, software and consulting does not have a college degree.

It gives you an idea about how diverse that talent pool can become if you really start thinking about it that way.

But I want to be very clear that I am not saying degrees aren’t important. It's just that in any country, you have people with different abilities and different economic opportunities and you want to make sure that you're looking at all of those channels.

What is the percentage of employees working from the office and working from home or in hybrid mode?

Before the pandemic, on any given day here in India, only 65 percent of our employees were in an IBM office. Some were at client locations, and some were working from home. So, we had flexibility before the pandemic.

Now, we want to get back to the same kind of percentage — around 65 percent of the employees in the office on any given day. But what will be different is, it will be teams coming together for very specific work.

We're not there yet. We have a long way to go. But we've seen some pilots and a few other countries that have worked well on this. As the pandemic is shifting to an endemic stage, we are hoping we'll be able to achieve this.

How do you see India in terms of talent availability? What are some of the unique qualities that you have seen among the Indian workforce?

India is a key market for IBM. In terms of talent, it's both about quantity and quality. And when I say quantity, it's not just absolute numbers, it’s the breadth of skills in Indian talent.

IBM is a hardware, software and services business, so we have a huge spectrum of talent that we need both in our software labs and hardware engineers, as well as in the services business from consultants to IT specialists to testers.

All of that is a very special piece of the Indian workforce market, the fact that you can get all of that here at such scale and breadth.

Concerning quality, we know that many CEOs in the tech industry are coming out of India. Hence, we're not seeing it as only deep technical expertise but also through management and leadership capabilities.

Further, in terms of the geographic breadth, the talent availability is very special. Sometimes when you go to other countries, it's all concentrated around one metro city. But what you see in India is an entire landscape, not just the big metro cities, but also emerging cities, where you have that same quality and skill. Some of it is because India has got great academic institutions, and, of course, because of the culture of the country.

Maybe this is why India has been able to attract so many businesses and it becomes a freewheel that continues to expand on itself.
Abhishek Sahu covers HR and Careers at Moneycontrol.
first published: Sep 20, 2022 11:02 am
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