IBM Global Human Capital Study

IBM GLOBAL Business Services
Unlocking the DNA of the

Adaptable Workforce
The Global Human Capital Study 2008
THE IBM GLOBAL HUMAN CAPITAL STUDY 2008
Cover image: In conventional terms, London City Hall has no front or

back: its shape is derived from a geometrically modified sphere. The
energy strategy for the building enables it to run on a quarter of the
energy consumed by a typical high specification office building. A
distinctive characteristic is that it leans back toward the south, providing
natural shading from the most intense direct sunlight.
TABLE OF CONTENTS
1 Preface
2 Executive Summary
6 Methodology and Demographics
9 Section One: Developing an Adaptable Workforce

– A Critical Capability
19 Section Two: Revealing the Leadership Gap

– Future Growth at Risk
27 Section Three: Cracking the Code for Talent
39 Section Four: Driving Growth Through Workforce

Analytics
46 Conclusion
Appendixes
49 A. Regional Viewpoints
56 B. Study Results
65 References and Notes
67 Contact Us
Unlocking the DNA of the Adaptable Workforce
PREFACE
By Tim Ringo, Global Human Capital Management Leader, IBM Global Business Services
and Randy MacDonald, Senior Vice President, Human Resources, IBM Corporation
More than ever, today’s global organizations are The findings from our study and our client experience
focusing their time and attention on maximizing the indicate that transforming the performance of the
value of their workforces. As corporations, nonprofits workforce truly involves a host of organizational
and government entities are becoming more players, including line management, executives
globally integrated, and as traditional geographic and other functional leaders from areas such as IT,
and competitive boundaries disappear, the need to Marketing and Finance.
identify, develop and connect talent has never been
more critical. Just as many of the companies that participated in this
study are wrestling with workforce issues associated
For the last several months, we have been holding with globalization, changing workforce demographics
discussions with senior HR executives from around the and increased competition, we too at IBM face many
world to better understand the challenges companies of these challenges. We have realized that the external
encounter as they work to more effectively attract, pace of change will require us to address workforce
allocate and invest in their human capital. More than transformation continually, rather than treat it as a
400 organizations from 40 countries, across a range bounded event.
of sizes, industries and geographies, participated in
these sessions. In the global market, the IBM Human Capital
Management practice applies the tools, experiences
The results have been enlightening, as they provide and leading practices that we have garnered from
guidance not only to the HR function, but also to the our own business, as well as the experience of over
entire organization. Enhancing workforce performance 2,000 practitioners working with clients in the external
in today’s business environment requires: marketplace, to enable organizations to make the most
• An adaptable workforce that can rapidly respond to of their own workforce investments.
changes in the outside market We would like to express our appreciation to those
• Leadership to guide individuals through change and executives who shared their time and experiences
deliver results to help further our understanding and generate new
• An integrated talent management model that ideas for transforming the workforce. Recognizing
addresses the entire employee lifecycle the ongoing nature of this critical challenge, we
look forward to sharing the results of our study and
• Data and information to deliver strategic insights and
continuing the dialogue on this topic.
measure success.

EXECUTIVE SUMMARY
The global economy is transforming into an Our analysis identified four important themes that
integrated market, full of opportunity, competition and require the attention and focus of senior executives
swirling change. Such change comes with its share across the organization, including those responsible
of challenges. Indeed, the strain that global economic for the HR function. These are:
growth is placing on the supply of commodities and
• Developing an adaptable workforce – A critical
the environment has been well documented. Perhaps
less well understood are the difficulties this expansion capability
is causing today’s organizations as they strive to • Revealing the leadership gap – Future growth at risk
make the best use of their most important assets: • Cracking the code for talent
their workforces.
• Driving growth through workforce analytics.
However, as any firm that has attempted to transform
its workforce to meet changing conditions will attest, Developing an adaptable workforce – A
the journey is difficult and littered with obstacles. critical capability
Understanding key workforce performance challenges There can be no doubt that winning in competitive and
and identifying the leading practices companies are quickly shifting global markets requires responsive
using to overcome them have become central focus organizations. However, for many companies,
areas for our research and consulting. workforce adaptability has been elusive. Among our
study participants, we found that only 14 percent of
This study is based upon primary research recently
respondents believe their workforces are very capable
conducted by the IBM Global Business Services
of adapting to change. What do these leading-edge
Human Capital Management practice and the IBM
adapters do that others don’t?
Institute for Business Value, with assistance from
The Economist Intelligence Unit. More than 400 Our findings suggest that three key capabilities
human resource executives from 40 countries partici- influence the workforce’s ability to adapt to change.
pated in a structured interview designed to capture First, organizations must be capable of predicting
insights on the subject of workforce transformation. their future skill requirements. Second, they need to
To provide additional insights, we also drew from a effectively identify and locate experts. And lastly, they
range of sources, including: secondary research, must be able to collaborate across their organizations,
financial analysis, previous IBM studies, our extensive connecting individuals and groups that are separated
experience working with clients and IBM’s own internal by organizational boundaries, time zones and cultures.
transformation story.

Many organizations are currently developing these Companies in our study expressed their deep concern
capabilities as independent initiatives, rather than as over the current and projected shortage of such
part of a more comprehensive approach to workforce individuals, with over 75 percent citing their inability
management. For example, the job of predicting future to develop future leaders as a critical issue. Given
skills is often left in the hands of the learning and the explosive growth in emerging markets, and the
development function, while collaboration projects retirement of experienced personnel in more-mature
might be nestled within a newly founded Innovation economies, our data suggests companies are placing
team, or even the IT function. Yet, all of these capabil- their futures at risk if they cannot identify, develop and
ities require the joint attention and effort of multiple empower the next generation of leaders.
stakeholders, including the line organization, to truly
contribute to bottom-line results. While emerging Together with participants from our study, we see
technologies such as automatic expertise locators leading companies developing a systematic approach
and Web 2.0 social networking tools are slowly being to identifying future leaders from around the globe,
adopted to better identify and connect experts around providing individuals with a broad range of job oppor-
the globe, they need to be woven into the fabric of tunities across their organizations and matching
day-to-day work. potential leaders with mentors who can share
valuable knowledge and provide access to networks.
Revealing the leadership gap – Future growth Leadership development is a process that needs to
reach far down into the organization, tap high-potential
at risk
individuals early in their careers and provide them with
No complex organization can transform itself without the core skills they need to identify new opportunities,
great leaders – those who can deliver today’s business develop innovative solutions and deliver results.
results while guiding the organization through ongoing
turbulence and uncertainty. As organizations face Perhaps most important to the success of developing
new challenges associated with globalization and future leaders, however, is the willingness of
innovation, new leadership skills are required. We the entire organization to take responsibility for
believe successful future leaders will need to work selecting individuals and providing them with the
more effectively with outside partners; serve as role appropriate guidance and experiences. While the
models and mentors to individuals who are increas- Human Resources function can play a major role
ingly dispersed across countries, regions and in developing critical and creative pathways that
geographies; and provide guidance and structure to allow individuals to advance their careers, only the
employees who come from a variety of generations, organization as a whole can commit the resources
experience levels and cultures. and provide the supportive culture needed to make
leadership development truly successful.

Cracking the code for talent corporate alumni, and even developing a presence in
Much has been written in the popular business press virtual worlds and social networking sites to cater to
about the ongoing “war for talent.” Companies we a more tech-savvy population. Managing this kind of
have worked with, across a range of sectors and talent market requires a structured, analytic approach
regions, have echoed this concern and have begun to attracting, developing and retaining key personnel.
to attack this problem on a number of fronts. These
include upgrading the skills of current employees, Driving growth through workforce analytics
understanding and tackling issues related to employee Companies in our study point to two strategic
engagement and turning their attention to attracting imperatives: improving operational excellence and
talent from the outside. increasing top-line growth. Each of these strategies
creates a different set of workforce implications.
Respondents from our study are clearly focused on To prioritize these issues and provide input into
overcoming their inability to rapidly develop employee the broader organization’s business direction, we
skills and align those skills to future business needs. would expect HR and the business units to engage
However, what is surprising is their relative lack of in an ongoing dialogue about strategic workforce
focus on attracting individuals from the outside and investments and transformation programs. Is this
retaining existing employees, both of which rank low happening today?
on the priority scale. Even more interesting is that
almost 60 percent of companies in the study believe The good news is that after years of effort, HR sees
they do a better job of attracting and retaining talent itself slowly moving beyond its traditional transac-
than their competitors. Given these findings, is it safe tional role and migrating toward a more strategic
to assume that companies have cracked the code for relationship with the business. The bad news is that
managing talent? just 39 percent of companies in our study are actually
conducting these strategic two-way discussions on a
Our experience suggests otherwise. Given the regular basis.
changes in employee demographics, the ease and
speed of switching employers and the differing expec- Missing from these strategic conversations are the
tations of the Generation Y workforce, we believe that analytics needed to develop insights and formulate
companies will have to become more, rather than business cases for investment. Our research clearly
less, innovative in the ways they attract, motivate and highlights a lack of systems integration, an inability to
develop employees. Organizations will need to seek extract data and a dearth of clearly defined metrics.
out new and innovative approaches to managing Not only are organizations finding it difficult to link
talent by broadening their focus to include the entire human capital information with data from Sales,
employee lifecycle. This will involve greater emphasis Finance and other related departments, they are often
on segmenting and targeting talent, reaching out to unable to share information across applications used
alternative labor pools such as older workers and within HR itself. Without consolidated information,

executives find themselves unable to identify their The human resources organization, by itself, cannot
rising stars, reward solid performers for their contribu- be expected to shoulder this entire effort. True, the HR
tions and retain desired employees. function needs to take a lead role in providing strategic
guidance on workforce issues and designing human
Challenges surrounding integration and data quality capital programs that can enhance workforce effec-
are currently taking precedence over the need to tiveness. However, the entire executive suite needs to
improve the analytic capabilities of HR personnel. play a role in improving workforce performance. This
However, previous research and leading practices may involve providing functional expertise, taking joint
suggest that companies that successfully leverage responsibility for executing human capital programs or
human capital information do more than just focus on simply setting a positive example for employees within
developing data standards and connecting systems. their organizations. Without this unified commitment, all
Not only do they provide key metrics that can improve bets are off.
workforce productivity and performance, they also
enable their HR personnel to translate human capital The adaptable workforce is a precursor for future
data into executable strategy. organizational success. The key to building that kind of
workforce lies with the leadership of the organization,
Conclusion facilitated in large part by HR. If there was ever a time
From our study and many experiences working with for the HR function to prove its strategic value and
clients in the human capital arena over the last several contribute to organizational performance and growth,
years, we distill the following conclusions about these it has arrived.
mission-critical issues:
Creating an adaptable workforce requires more than

a series of HR programs. It starts with leadership
– having the right people who have the skills and
capabilities to develop and communicate a vision,
provide structure and guidance and ultimately deliver
business results. It requires the ability to identify
experts and foster an environment where knowledge
and experience travel beyond traditional organiza-
tional boundaries. It calls for a talent model that can
help companies recruit, develop and retain valued
segments of the employee population. It depends
on an underlying backbone of data and information
about the current and projected state of workforce
performance, and the ability to apply that information
to develop strategic insights and recommendations.

METHODOLOGY AND DEMOGRAPHICS
The findings of this report are based on a study Human Resource Officers (CHROs), 20 percent
conducted by the IBM Global Business Services serving as Executive Vice President, Senior Vice
Human Capital Management practice and the IBM President or Vice President of HR, 35 percent as HR
Institute for Business Value. More than 400 human Director, 28 percent as HR Manager and 4 percent
resource executives from 40 countries participated in holding another title.
a structured interview designed to capture insights on
the subject of workforce transformation. The majority The format of the interviews and the number
of these interviews were conducted in person by completed allowed for substantial qualitative and
IBM practitioners, with the remainder interviewed quantitative analysis. Our analysis and recommen-
via telephone with the assistance of The Economist dations also drew on secondary research, financial
Intelligence Unit. analysis, prior IBM studies that address human capital
issues, our extensive experience working with clients
The participants we interviewed represent private, and IBM’s own transformation story. We have worked to
public and not-for-profit organizations across a variety place our findings into an overall context that provides
of industries and geographic locations (see Figure perspective on the strategic priorities HR and line-of-
1). Their organizations range in size from less than business leaders will face over the coming years.
1,000 employees to more than 50,000. Corresponding
revenues for these organizations vary from less than Whenever possible in this report, we share the
US$500 million to more than US$25 billion. Our inter- voices of our participants directly, and hope that their
viewees included high-ranking human resources thoughts, as well as the conclusions of this point-in-
leaders, with 13 percent indicating they are Chief time study, add to the ongoing dialogue taking place
within the human capital community.
Figure 1. Breakdown of study participants.
By sector By number of employees By revenue (US$)
9% <1,000 15% <500 million

15% Communications
25% 1,000 - 5,000 11% 500 million - 1 billion
23% Distribution
15% 5,000 - 10,000 24% 1 billion - 5 billion
21% Financial Services
19% 10,000 - 25,000 14% 5 billion - 10 billion
30% Industrial
12% 25,000 - 50,000 12% 10 billion - 25 billion
11% Public
20% >50,000 24% >25 billion
By region By title
22% Asia Pacific (excluding Japan) 13% CHRO or equivalent (or CEO)
34% Europe, Middle East, Africa 20% EVP, SVP, VP of HR or equivalent
9% Japan 35% HR Director
13% Latin America 28% HR Manager
22% North America 4% Other
Source: IBM Global Human Capital Study 2008.
This man is kneeling in front of crops planted by global positioning system

technology in the Imperial Irrigation District in California. The district delivers
water to nearly 500,000 acres of agricultural lands in Imperial Valley – acres that
would otherwise be nonarable desert. In the winter months, the Imperial Valley
Unlocking the DNA of the Adaptable Workforce provides the great majority of the produce consumed in the United States.
SECTION ONE
SECTION ONE
Developing an Adaptable
Workforce – A Critical Capability
“Businesses change every day, and the
development of a workforce that can cope with
change is not easy.”
– General Manager, Human Resources Group, Japanese
transportation company
Today’s business executives face a host of pressures,

including volatile markets, security issues, global compe-
tition and the emergence of new business models.
These are forcing organizations to be more responsive to
shifting market needs; more flexible in how they operate;
more focused on their core competencies; more nimble
at partnering and more resilient to external threats.
Developing a workforce that is adaptable to change has
become paramount.
Adaptability: Three core elements

While 53 percent of companies state their workforces
are generally capable of adapting to change, only 14
percent say they are very capable (see Figure 2). Many
of these very adaptable organizations are also top
financial performers.1

Figure 2. How would you rate your workforce’s ability to • Fostering an environment that allows people to
adapt to potential changes in the business environment? collaborate across organizational boundaries.
(Percent)
From Figure 3, we see companies that are very
capable of adapting to change are also more likely to
Very capable be able to predict future skill needs, identify expertise
Generally capable and collaborate. Statistical analyses document that
Somewhat capable these variables – both individually and collectively
Not capable
– are strongly correlated with the ability to change in
response to evolving business conditions.
Don’t know
0 10 20 30 40 50 60
Overall, HR executives reported that their companies
have begun to build basic capabilities in each of these
three areas. However, given the rapid acceleration of
change in the business environment, simply being
“good” isn’t going to be good enough. Our work with
What do these very adaptable companies do clients suggests that companies are not realizing the
differently from others? Our findings suggest three full business benefits associated with these capabili-
important factors contribute to an organization’s ability ties because they are being developed as stand-alone
to develop an adaptable workforce: initiatives and are not integrated into a more holistic
approach. Over the next several pages, we will
• Predicting required skills and their future availability examine in more detail how companies are performing
over the next three to five years in each of these areas, while identifying current chal-
• Identifying and locating individuals with specific lenges and opportunities for improvement.
expertise
Figure 3. Characteristics of companies indicating they are very capable of adapting to changing business conditions.
(Percent)
Able to predict future skill needs
Effective in locating experts
Effective in collaboration
0 20 40 60 80
Those very adaptable to change All other companies

10 Unlocking the DNA of the Adaptable Workforce

Seeing the future: Predicting Expertise location: Knowing what you have
skill requirements and where it is
Developing an adaptable workforce requires more While predicting future skills is important, so is the
than the ability to simply react to change. Successfully ability to apply existing knowledge and skills to new
anticipating future business scenarios enables orga- challenges. Expertise location is cited by respondents
nizations to know what key competencies to target in as critical in identifying and allocating resources to
advance of critical market shifts. Identifying future skill address new opportunities and threats. As the EVP
requirements isn’t enough, though. Leading companies of HR at a financial services company highlights, “We
will build, acquire or source these required skills prior could move people around quicker…and fill openings
to needing them. The combined ability to plan and quicker. We have lots of resources all over the place,
execute will separate the winners from the “also-rans.” but our decisions are made by ‘who knows who’ and
Only 13 percent of organizations interviewed believe anecdotal information.”
they have a very clear understanding of the skills
Likewise, a Group HR Manager from a large postal
they will require in the next three to five years. While
organization states: “The benefits of improved
some organizations believe they understand the
expertise location would be immense. In a large orga-
needs of their current businesses, they are less sure
nization, where you don’t have the line of sight with
of their ability to predict the skills needed in new or
every employee [as you would in a small organiza-
emerging markets. For example, the Talent Leader
tion], there is a lack of awareness about skills that are
at one European chemicals company states, “Our
available. Having an expertise locator would provide
understanding is better in more-mature markets than
a double check to help identify potential candidates
in less-developed markets – we do not know how less-
for new roles, beyond those that are already known or
mature markets will develop.”
front-of-mind.”
There are other companies that, given the pace of
Only a small minority (13 percent) believe they are
change within their environments, find skills forecasting
very capable of identifying individuals with specific
particularly problematic. As one European bank’s HR
expertise within the organization. Many companies
executive describes: “We have created a powerful
recognize they can not yet systematically identify and
toolbox to understand the skills and capabilities of the
locate expertise.
workforce…powerful when maintained. However, which
capabilities will I need in the future? Here we have
quite a bit of uncertainty – who would have expected
the need for tough restructuring in previous years?
When I started working, the half-life of knowledge was
seven years, now it is 18 months!”
11
Companies are using a variety of techniques to Getting together: Collaboration across
improve their expertise location capability (see Figure the organization
4). Fifty-two percent of companies that rate them-
Clearly, expertise location plays an important role in
selves as very effective at locating experts use some
the development of an adaptable workforce. However,
form of employee directory, while only 39 percent of all
simply finding those with knowledge and expertise is
respondents report using one. Company directories
only half the battle. Once they are identified, these indi-
not only provide data about an employee’s location
viduals need to be able to collaborate with others – to
and phone number, but also can include information
innovate, share knowledge and solve problems.
about the person’s reporting chain, skills and certifi-
cations, and even pointers to others within his or her Recently, an IBM study polling more than 750 CEOs
personal network. from around the world identified collaboration as a key
tenet to fostering innovation and growth.2 Our study
One challenge is that many of these current
participants agree. As one SVP of HR from a services
expertise location methods require individuals to
firm states, “Better collaboration would enable us to help
maintain their own information. Only 15 percent of
global customers more effectively and increase the level
those interviewed are using technology that enables
of product/service innovation.” Yet, only 8 percent of
the automatic profiling of skills, expertise and relation-
companies interviewed believe they are very effective at
ships. Relying solely on self-reporting brings a host of
fostering collaboration across the enterprise.
challenges, including keeping the data current and
reflecting a person’s actual capabilities, rather than
just self-perception.
Figure 4. Which of the following does your organization use to identify key skills and subject matter experts?
(Percent)
Employee directory
Resume repository
Skills tracking database
Help desk or other support personnel
Frequently asked question (FAQ) repository
Other technology (e.g., automatic profile generation systems)
None of the above
0 10 20 30 40

What inhibits effective collaboration in today’s global Implications
organizations? Surprisingly, a lack of technology does Our study demonstrates that those organizations
not appear to be at the root of this issue, with only 28 identifying themselves as very capable of adapting to
percent of companies indicating this is a significant change also report being very effective at forecasting
factor (see Figure 5). As one U.K. financial services future skill needs, identifying experts and sharing
executive states, “The perceived lack of technology knowledge and expertise. Our data suggests that
tools to support collaboration is an excuse, not companies need a greater understanding of the skills
a barrier.” required to address future business challenges. This
Instead, we see organizational silos (42 percent), time will enable them to make more-strategic decisions
pressures (40 percent) and misaligned performance regarding developing, buying or sourcing those skills.
measures (37 percent) impeding organizations’ ability As a Managing Director of HR from a U.S.-based
to collaborate. Clearly these nontechnical issues make investment bank explains: “We need to give more
a significant difference for organizations that need emphasis to this [future skills identification]. We need
to leverage their collective knowledge and expertise. to anticipate these needs based on various business
As the Director of Leadership Development for one scenarios [such as preparing for a downturn]. In the
healthcare agency notes, “Culture and mindset are the current market and company performance scenario,
real inhibitors here. The technology is available, or will we know what the requirements are. But we know that
be here shortly, but getting people to both understand business cycles exist, and we need to be ready for
the importance of collaboration and utilize these tools them. Overall, we need to be more anticipatory.”
will take some time.”
Figure 5. How significant are the following barriers to collaboration across your organization?
(Percent)
Organizational silos inhibit collaboration
Individuals are too busy to assist others

across the organization
Performance measures not aligned to
reward individuals for collaboration
Technological tools do not effectively
support collaboration
Collaboration not viewed as important
Concerns about intellectual property limit

effective collaboration
0 20 40 60 80 100
Very significant Significant Slightly significant Not very significant Not at all significant NA or don’t know
13
Our data also highlights the importance of locating in studying and conducting pilot projects in this
experts. We believe companies should attack this area. One such project, Small Blue, uses e-mail data
need on two fronts. First, develop a formal skills to highlight expertise and increase the visibility of
management process that allows organizations to connections among people across IBM.
easily track the quantity and location of individuals
with important capabilities and certifications. Second, Fostering a collaborative environment is critical for
implement expertise location techniques that are organizations that are targeting growth through the
based on social networking and other Web 2.0 tech- development of innovative products and services.
nologies, which can more easily unlock the “hidden” Since our study suggests that technology is not the
talent within an organization. primary barrier to collaboration, how do companies
overcome the actual culprits – entrenched silos (either
When developing a formal skills management structural or cultural), limited time and misaligned
approach, organizations need to strike the right performance goals?
balance – tracking the appropriate number of skills
without creating competency models that collapse We find there are a number of initiatives that can jump-
under their own weight. In addition, they will need to start collaboration across traditional line-of-business
develop a protocol for periodically updating the data boundaries. For example, informal communities of
that feeds these skill management systems. When practice, which can range in size from as few as 15
managed correctly, companies will be able to better to several hundred individuals, are a leading practice
track required skills against current and future resource in maintaining the flow of knowledge across the
needs and better execute against their workforce organization and serve as a vehicle for preserving
management plans. organizational memory. These groups can help break
down traditional organizational barriers, reduce the
On the less formal side, the use of employee profiles, amount of time it takes for individuals to get answers
online resumes, personal Web pages and other to needed questions and provide a forum in which
tools can increase the visibility of both an individual’s people can be recognized for their contributions by
personal knowledge and relationships to others (both their peers.
inside and outside the organization). These informal
expertise location capabilities can help people identify As these groups bring together like-minded indi-
individuals with common interests and link people from viduals who share a passion for a topic, face similar
across the country, or around the world, who are facing challenges or speak a common language, partici-
similar challenges. pants are able to experience a sense of trust that
allows tacit knowledge to be shared more freely.
In our work with clients, we are seeing a growing The United Nations’ UN-HABITAT Jam (see sidebar,
interest in the use of automated expertise identifica- UN-HABITAT Jam: Collaborating across a global
tion systems, where sources of content (e.g., e-mail, community) provides one example of bringing people
content repositories, tags on Web pages) are mined together; this same approach can be applied within
to uncover and highlight pockets of interest and public or private organizations to overcome physical
expertise. IBM Research has been actively involved or organizational barriers.

Several of our participants commented on the value collaboration would be for the remuneration of senior
of communities within their organizations. A VP of HR people to be linked to better collaboration – e.g.,
at one U.S. manufacturer describes it this way: “We bonuses based on overall corporate success rather
have fabulous collaboration – we have 1,500 communi- than business unit results.” Similarly, a financial
ties where people connect to people worldwide and services firm’s VP of Corporate HR suggests, “To
solve issues. These communities are very specific improve this [collaboration], it would need to be incor-
to an employee’s job. The key is to have a sharing porated into performance measures – people deliver
culture and to connect person to person, rather than what they are accountable for.” Combining both formal
having someone search through a database. Here’s an reward systems and informal methods for recognizing
example… A U.K. engineer had a problem with a part. knowledge contributors and users can help overcome
So, she posted a question to her community. Within the reluctance of individuals to create, share and, most
four hours, she received responses from Indiana and importantly, apply insights from around the company.
Illinois that solved her problem.”
Predicting skills, managing expertise and collaborating
We also are seeing companies embed collaborative require extensive cooperation from multiple depart-
technologies into everyday work activities and ments. For example, the learning and development
processes. For example, a salesperson looking for function needs to conduct job-task analyses as part
reference material related to a particular product or of the skills forecasting process. IT needs to identify,
service could enter information into an Intranet search implement and integrate expertise location and
engine. His search results could list not only relevant collaborative software with other existing systems. HR
internal and external documents, but also individuals needs to provide insights into governance models and
who are knowledgeable about these solutions. Beside workforce strategies that foster a collaborative envi-
each of the individuals’ names could be an instant ronment in a virtual world. But most importantly, these
messaging icon, identifying if this person is online and tools and processes need to be built into the fabric
available to chat. of day-to-day work activities. With these disparate
functions working together, the critical need for an
While recognizing the value of informal collabora- adaptable workforce will come closer to becoming
tion, some respondents also see the need to more a reality.
formally weave collaboration into the performance
management fabric of their organizations. As a retail
company’s HR leader describes, “A way of improving
15
UN-HABITAT Jam: Collaborating across a global community
“The fact that the debate on slums has moved from the academic world to streets of cities such as Nairobi, Dakar, Cape Town and Mumbai,
Rio, Lima and Manila is in and of itself a powerful signal to world leaders on the need for concerted action.”
– Mrs. Anna Tibaijuka, Executive Director, UN-HABITAT, Nairobi, Kenya 3
The World Urban Forum (WUF) was established by the United Nations to examine rapid urbanization and its impact on
communities, cities, economies and policies. The organization hosts an international conference every two years attracting
some 10,000 delegates to discuss issues, share ideas and set out action plans.4 However, the expense of travel limited
grassroots participation and significant involvement from the very people the organization strives to help. For the then-
upcoming 2006 conference in Vancouver, UN-HABITAT and host-country officials needed a new, cost effective approach to
gathering input from around the world.
The group used IBM’s “Jam” communication method as inspiration to set up an online communication tool capable
of reaching out to the urban poor and frontline aid workers around the globe. Jams are multiple-day, round-the-clock,
worldwide, Web-based events designed to share insights and connect thousands of employees around a predefined set
of discussion topics. Moderators and brokers are employed to monitor the activities, suggest connections among discus-
sion threads, poll the audience about specific issues and help ensure the insights from one part of the world are addressed
globally. In December 2005, the Canadian government, IBM and UN-HABITAT hosted a 72-hour “Habitat Jam” to stimulate
ideas and discuss urban habitat issues in preparation for the WUF conference scheduled for June 2006 in Vancouver.5
The group wanted to engage large numbers of people beyond the usual delegates by empowering and stimulating tens
of thousands of global citizens – rich and poor alike – with the ultimate goal of turning ideas into action on critical issues
related to urban sustainability. The event was followed by a two- to three-week analysis period during which the team used
the discussion logs to create an event report with key conclusions and ideas to act on.
Over 600 ideas were identified, of which 70 were included on the WUF 2006 agenda. Habitat Jam engaged more than
39,000 participants from 158 countries in discussions of issues critical to sustaining cities.6 Partner organizations
successfully brought the voices of women, youth and slum dwellers to the dialogue, with 78 percent of the participants
coming from these three groups. The WUF’s remarkable achievement enabled global idea-sharing among First-World
nations and people in some of the poorest regions of the world.
Baltimore, Maryland is typical of a number of smaller cities in the United

States. After revitalization of its downtown area, the city has experienced
16 Unlocking the DNA of the Adaptable Workforce a rebirth, with tremendous growth in commerce and culture.
SECTION TWO
SECTION TWO
Revealing the Leadership Gap –

Future Growth at Risk
“The magic ingredient of any organization
is leadership.”
– CHRO, consumer products company
A lack of leadership capability has become a significant

barrier to growth for many organizations. As two leader-
ship experts, Douglas Ready, a visiting professor at the
London Business School, and Jay Conger, the chair
of Leadership Studies at Claremont McKenna College,
describe in a recent Harvard Business Review article:
“One London-based real estate finance and develop-
ment firm was gearing up for a major reconstruction
job in Berlin…When the executive committee reviewed
the list of people who might be ready to take on such
an assignment, the CEO noticed that the same names
appeared as the only candidates for other critical efforts
under consideration. And when he asked the business
unit heads for additional prospects, he was told there
weren’t any. The firm’s growth strategy hinged on these
projects, but the company had failed to groom people to
lead them.”7
Without sufficient leadership talent, who will set the

direction? Who will paint the vision? Who will lead the
change? It’s not only an HR issue. It is a business
imperative.
19
Help wanted: Leaders For others, changing workforce demographics are
Companies cite a lack of leadership capability as forcing them to rethink their short-term leader-
one of their top workforce challenges (see Figure ship capacity. As the Personnel Director of one
6). For many, rapid expansion has brought this issue government agency highlights, “Fifty percent of our
to the forefront. As the head of HR for one global leadership positions across the organization could be
media company describes, “Leadership capability vacated in the next five years, so the need to build
[is a challenge]…after we went public we grew very leaders and pass knowledge on is consistent across
rapidly. As we grew, we did not think a lot about how the organization.”
we could mature properly.” And the SVP of HR for a We see two groups particularly vulnerable to growth
manufacturing firm explains, “We are…expanding constraints resulting from a lack of leadership:
geographically to become more international, and we companies operating in Asia Pacific and organizations
need leadership in these new areas. Basically, we are within the industrial sector. For example, almost half of
trying to develop bench strength to position ourselves the companies based in Asia Pacific indicate lack of
for growth.” leadership capability as a primary workforce challenge
(see Figure 7). In this region, rapid growth, coupled
Figure 6. What do you see as the primary workforce-related issues facing the organization?
(Percent)
Inability to rapidly develop skills to address

current/future business needs
Lack of leadership capability
Employee skills not aligned with current

organizational priorities
Inability to collaborate/share knowledge across
the organization
Inability to attract qualified candidates
Inability to build an engaged/motivated workforce
Unable to redeploy/realign resources against

new opportunities
Inability to retain key employees
Labor costs higher than competitors
Difficulty in modifying staffing levels due to local

labor regulations
0 10 20 30 40 50 60

Figure 7. Lack of leadership capability by geography. struggle to expand into new markets/geographies. As
(Percent) one Korean manufacturing company’s CHRO remarks,
“We lack people who can manage and operate the
Asia Pacific
(outside Japan) business in a global environment.”
Japan
Some senior executives believe the industrial sector’s
Europe, Middle
East, Africa lack of leadership capability is related to both an
Latin America aging workforce and inadequate succession planning.
North America For example, a U.S. chemicals company’s VP of
HR indicates, “We need to develop new talent as
0 10 20 30 40 50 long-term skills walk out the door.” Similarly, a U.S.
Source: IBM Global Human Capital Study 2008. technology firm’s VP of Worldwide HR notes, “People
in our business are getting older, and we need to
develop the next generation of leaders.”
with a relatively small pool of experienced leaders,
has quickly thinned the ranks. As one VP of HR from
Building leaders from within
a Singapore technology company summarizes,
Not only are companies concerned with their current
“Leadership at all levels is problematic.”
leadership capacity, they are confronted by their
Companies expanding into Asia are also facing this inability to develop future leadership talent (see Figure
shortage, as they are having difficulty bringing expatri- 9). Over 75 percent of companies indicate building
ates into the region. The VP of Corporate HR from one leadership talent is a significant challenge. Companies
Canadian insurance company notes, “For Asia Pacific, in the Asia Pacific region are most concerned with
we keep looking for talent to bring over from the U.S., their ability to develop future leaders (88 percent);
but the talent pool of individuals willing to relocate followed by Latin America (74 percent); Europe, Middle
dries up – we still have leadership shortages in AP East and Africa, (74 percent); Japan (73 percent) and
and Japan.” North America (69 percent). The inability to rotate top
leadership talent is also cited as an important issue.
We also see leadership issues surfacing across the
global industrial sector (see Figure 8). This leadership Companies in our study are taking some interesting
shortage appears to be contributing to one of the steps to more effectively assess and develop leaders.
primary business challenges facing this sector – the One approach is the use of action learning programs.
Figure 8. Leadership challenges in the industrial sector are hampering expansion.

(Percent)
Challenge in expanding into new markets/
Lack of leadership capability by sector geographies by sector
Industrial Industrial
Distribution Distribution
Communications Communications
Financial services Financial services
Public Public
0 10 20 30 40 50 0 10 20 30 40 50 60
21
Figure 9. Which are the most significant capability-building challenges facing your organization today?
(Percent)
Building leadership talent

Fostering a culture that supports learning and development
Rotating leadership talent across business units/geographies
Passing on knowledge from older to younger employees
Forecasting skills needed in the near future
Cross-training individuals needed in other parts of the organization
Rapidly getting new employees up to speed
Developing basic skills across the employee base
Measuring the effectiveness of learning and development activities
0 10 20 30 40 50 60 70 80
These initiatives bring people together from across Job rotation was also frequently mentioned by study
the organization to gain hands-on experience in participants, with almost 50 percent finding this to
solving actual business problems. As one SVP of HR be a valuable employee development technique.
describes: “We have put together global teams to work Organizations see this as an efficient way of providing
on strategic projects – they have one physical meeting development experiences and a pragmatic method for
and the rest are virtual. It gives us a chance to see evaluating future talent. One VP of HR from a manufac-
our top people in team situations and test our succes- turing firm describes the value his company sees in its
sion candidates. It gives people a broader view of the job rotation program this way: “Job rotations have really
company and our global clients.” helped us with succession planning. We make sure
our employees are gaining the knowledge and experi-
Action learning can also be incorporated into more ences required by moving them to jobs that may not
traditional education programs. The SVP of HR from be in their background. We see if they can step up to
an international education provider highlights: “Our the challenge. We are giving people a way to differen-
highest-impact initiative has been our leadership tiate themselves.”
development aimed at high-potential employees. It
started as a two-year program driven by the CEO While several companies describe the value they are
and COO. It was primarily case study driven, and has seeing in job rotation, putting this into practice still
started to focus more on action learning as the case remains a challenge; more than one-third of surveyed
studies started to outgrow their usefulness.” companies view job rotation as a significant capability-
building challenge. One roadblock is the reluctance
One North American technology firm has also incor- of operating divisions to surrender top performers. As
porated mentoring into its action learning programs. the VP of HR at one Singapore technology company
According to its VP of HR, “We form classes of mentees, remarks, “There is a noticeable reluctance by the
assign them business issues to solve and match them releasing manager for individuals to rotate jobs – [there
up with senior leaders. It is a great program for getting is a] fear of losing talent!” Therefore, job rotation needs
visibility into the next generation of leaders and for to be embraced by both HR and line-of-business
solving some difficult business problems.”

executives, with both working together to put succes- – briskly connecting talent and moving information
sion plans in place to backfill individuals who need to and knowledge around the globe. Leaders need to
move on to new positions. be increasingly sensitive to the diverse composition
of the global workforce. They need to understand
Implications the realities of engaging employees from a range of
Companies are finding themselves with a leader- backgrounds and experiences. Effective leadership
ship vacuum, with fewer individuals who have the development programs take into consideration these
knowledge and experience to guide others through realities and build in experiences that help develop
necessary business transformations. Without leaders the new competencies needed to succeed in a
who can provide the direction, feedback and clarity globally integrated environment.
needed to navigate in a more complex world,
While it is tempting for companies to simply shift their
companies will struggle to achieve business goals.
leadership development efforts to universities offering
While many companies have invested in a range of “executive education” courses, both clients’ and our
leadership development and succession planning own leadership development experiences reveal
activities, we often see these efforts conducted on a that corporate executives need to think more broadly
regional basis, which does not allow an organization to about development opportunities for their up-and-
take a global view of its leadership portfolio. Our qualita- coming staff. As highlighted by our participants, action
tive data suggests that companies need to consider a learning programs, mentoring and job rotation can all
range of factors including the number, location, transfer- play a valuable role in providing individuals with new
ability and proficiency of leaders from around the globe experiences, creating effective networks and passing
to effectively support their growth plans. One way to along critical experiential knowledge. Each of these
meet this need is through talent management software techniques can be cascaded down to lower levels of
that can help identify current gaps and provide insight the organizational hierarchy, making it easier to identify
into planning processes. This enables companies to and develop potential leaders earlier in their careers.
make more-educated decisions regarding the types of The Maybank case study (see sidebar, Maybank:
leadership development programs required, the speed Answering the need for leadership excellence)
with which those programs need to be implemented, describes how one company has worked to prepare
and the business risks associated with not having suffi- its leaders for anticipated transformation.
cient leadership talent.
While leadership development programs are crucial,
The changing nature of work is also impacting the our 2005 Global Human Capital Study offers a
skills leaders need to be successful. An IBM study cautionary message.9 In that study, we found
conducted in 2007 specifically examines the chal- companies that invest in developing their workforces
lenges of “Leadership in a Distributed World.”8 run the risk of losing talent to competitors if employees
Today’s managers are being asked to provide are not given challenging roles that allow them to
guidance and direction to teams working across apply their new skills. Therefore, leadership develop-
time zones, cultures and organizational barriers. In ment programs need to link closely to succession
today’s dynamic business environment, leaders must management strategies across all levels of the orga-
take more risks and execute with greater speed nization, providing opportunities for those both ready
and willing to accept new challenges.
23
It will take focused effort from every corner of the line-of-business leaders to identify the high potentials
organization to build sufficient numbers of adequately across all levels of management, provide them hands-
skilled leaders capable of achieving business results. on leadership experiences and coach and mentor
HR must provide the development programs and the them as their careers advance.
succession planning processes, but it will require
Maybank: Answering the need for leadership excellence

The Maybank Group (Maybank) is the largest banking group in Malaysia, with well over 400 branches. Maybank has been
a leader in the Malaysian banking industry for more than three and one-half decades. However, deregulation and intense
competition threatened to jeopardize Maybank’s position in the marketplace. It had to become more responsive to customer
and market demands. Accordingly, the company needed to strengthen its management talent pool and increase the respon-
siveness of its leadership. Maybank leaders identified two management development goals: to enhance the effectiveness of
managers in transforming the bank in preparation for banking deregulation in 2007 and to drive workforce excellence through
innovative programs. However, the company had no consistent way of approaching management/leadership development
– training was mostly sporadic, not scalable and required large investments of time, effort and money.
To build a foundation for driving behavioral changes among leaders and managers, Maybank officially launched a new
Corporate Management Development Program in 2005 known as “IMPACT” (Integrated Management development
Program in AChieving Transformation). This program targets emerging and first-line managers, utilizing a blended learning
approach. It integrates distributed learning with classroom experiences, collaboration with peers, on-the-job management
coaching and reference material. Experienced managers are incorporated into the program as mentors; online facilitators
also support and motivate the students. Because the program is integrated with participants’ day-to-day work, their
managers are also engaged in their professional development. Initially, 750 managers from various sectors of the business
were trained to build core management skills such as communication, coaching and team leadership. They have, in turn,
shared what they have learned with their teams, impacting an estimated 3,000 total staff. Compared to previous learning
approaches, this program provides a richer, deeper learning experience, yet significantly reduces the cost per student.
The program has resulted in a common management and leadership model across Maybank. Based on tracking via a
balanced scorecard of key performance indicators, an estimated US$20 million in business impact has already been
achieved. The ability of managers to communicate a strategic vision, engage and energize the workforce and improve
employee performance has increased from baseline measures. These estimates of business impact point to a strong return
on investment from the implementation of the IMPACT program.
Shanghai Pudong International Airport is a major international gateway into China,

handling over 17 million passengers a year. Built in 1999, it replaced the
Hongqiao Airport as Shanghai’s international transportation hub. It is connected to
24 Unlocking the DNA of the Adaptable Workforce Shanghai by one of the first commercial high-speed maglev railways in the world.
SECTION THREE
SECTION THREE
Cracking the Code for Talent
“Our market leadership and our international

reputation are both key in attracting and retaining
employees.”
– HR Director, professional services firm
Significant attention in the business press and the

conference circuit has been focused on the importance
of the talent management lifecycle: recruiting, developing
and retaining desired employees. However, HR executives
in our sample appear more concerned about their
organizations’ ability to develop existing employee skills
than they are with attracting new talent. Many believe their
corporate reputations will allow them to attract and retain
the people they need. Yet, changing trends in workforce
demographics and mobility patterns suggest they may
need to challenge this perception and consider investing
more resources in recruiting, selection and retention.
Skill building: What’s working and what’s not

More than half of our study participants indicate that the
inability to rapidly develop skills is a primary workforce
challenge, and more than one-third state their employees’
skills are not aligned with their current organizational
priorities (see Figure 10).
27
Figure 10. What do you see as the primary workforce-related issues facing the organization?
(Percent)
the organization
new opportunities

labor regulations
0 10 20 30 40 50 60
We were interested in understanding which learning [of baby-boomers] and the number of new hires will
techniques organizations believe are the most valuable prevent this method from being efficient. So, all proce-
in closing this skill gap. We found that companies still dures are getting documented, and training is being
report greater effectiveness from traditional forms created to spread knowledge.”
of learning, such as on-the-job training (OJT) and
instructor-led classroom experiences (see Figure Most companies are not seeing sufficient return from
11). It is not surprising, then, to see that 52 percent their stand-alone investments in e-learning (see Figure
of companies struggle to rapidly develop skills. Both 11). Only 27 percent of companies find self-managed,
OJT and classroom training are time- and resource- computer- or Web-based training to be effective.
intensive, making them costly to the business and Organizations remain unsure about where and when
potentially slow to respond to shifts in the market. to employ distributed learning. This is reflected by
comments from the head of HR from one bank who
Some companies recognize that these approaches states, “e-learning may be appropriate for technical
are not sustainable given today’s maturing workforce matters and methods, but it is not yet appropriate for
issues. One French bank’s HR Director explains it this learning interpersonal skills where interaction with
way: “There used to be a great use of ‘in-situation’ people is required.” Only 17 percent indicate that
knowledge transfer, meaning a new hire working in a virtual classroom training delivered over the Web is
team of experienced people. But massive retirements effective – with more than one-third of companies not
using this technique at all.

Figure 11. How effective are the following employee development techniques in your organization?
(Percent)
On-the-job training
Classroom instruction provided by
your organization
Classroom instruction provided by vendors/
institutions outside your organization
Job rotation
Blended learning – combination of
classroom and Web-based learning
Mentoring
Educational reimbursement
Self-managed computer or
Web-based training
Virtual-classroom-based training delivered
over the Web
Self-study (not computer-based)
Correspondence courses
0 20 40 60 80 100
Very effective Somewhat effective Neither effective nor ineffective Not very effective Not at all effective NA or don’t know
In industries that require tracking of mandatory training Blended learning, the combination of distributed
for large numbers of people, distributed learning learning in its various forms with more traditional
plays a more valuable role. For example, 42 percent learning formats such as classroom, seems to
of financial services companies state that Web- be finding greater traction. The blended learning
based learning is effective for their specific needs. approach has been highlighted for years as a leading
As highlighted by the head of HR for one Australian practice.10 In our sample, 44 percent indicate that
bank that is having success with “product accredita- blended learning is an effective employee develop-
tion e-learning,” distributed learning techniques may ment technique. As the SVP of HR for one industrial
be helpful in addressing regulatory and compliance products company notes, “We are using blending
issues that need to be tracked and evaluated on a training. For example, employees start by taking virtual
global basis. training [to see if interested in an area] then move to
other required classes and eventually get certified.”
29
Attracting talent: Are companies paying qualified candidates is a problem. As Figure 10
enough attention? shows, retention seems to be even less of a concern,
with only 18 percent highlighting this as a high-priority
Much has been written over the last several years
workforce concern.)
about the ongoing “war for talent.” For many
companies participating in the study, turnover This is not to say that there aren’t sectors where
continues to rise. Almost half of the organizations talent attraction is clearly top of mind. For example,
surveyed highlight that turnover has increased over 40 percent of companies in both the public and the
the last two years, while only 16 percent state it has financial services sectors indicate that attracting key
decreased (see Figure 12). Globalization, changing employees is a significant challenge (see Figure
workforce demographics and shifting generational 13). For financial services firms, growing expansion
attitudes have contributed to a more transient coupled with increasing competition from nontradi-
workforce, making it more difficult to both obtain and tional institutions, such as private equity firms and
retain desired employees. The analyst firm IDC states hedge funds, may be fueling the fire for talent. As one
in a recent report, “With low unemployment, aging European bank’s head of HR comments, “We often
population, and employees’ weakening allegiance to have to hire people from the market to fill leadership
the workplace in many major economies, companies positions.” In the public sector, the wave of retirements
are expected to look to revamping their human may be forcing organizations to focus on the exodus
resources and talent systems, and 2007 could emerge of experienced personnel. One HR leader at a govern-
as the turning point for these changes.”11 ment agency remarks, “Staff turnover is increasing
– largely driven by an aging workforce [retirements]
We find it surprising, then, to see HR executives less
and increasing skill scarcity in the market.”
concerned with their ability to attract and retain key
talent, compared to their strong interest in building The relatively low percentage of HR executives
capability among existing employees. (As previously describing talent attraction and retention as critical
discussed, 52 percent indicate the inability to rapidly issues is notable – especially given the contradictory
develop skills as a primary workforce challenge, findings from similar outside studies. A 2006 Corporate
but only 27 percent state that the inability to attract Executive Board study indicates that three-quarters of
Figure 12. In the past two years, what changes have there been to the level of turnover in your organization?
(Percent)
Significantly higher than in previous years

Somewhat higher than in previous years
About the same as previous years
Somewhat lower in previous years
Significantly lower than in previous years
Don’t know
0 10 20 30 40

Figure 13. Inability to attract qualified candidates by sector.
and therefore are more concerned about possible
outcomes. As the Corporate HR Director for one
(Percent)
retailer notes, “The internal issues are the ones I worry
Financial services about, and therefore we are working hard in manage-
ment training and development.”
Public
Industrial However, another explanation may be that HR execu-
Distribution
tives in our sample believe that they are more capable
of attracting and retaining talent than their competi-
Communications tors, despite the ongoing war for talent. When asked
0 10 20 30 40 50 to compare their ability to attract/retain talent, almost
Source: IBM Global Human Capital Study 2008. 60 percent indicate they accomplish this better than
their peers, while only 10 percent state they are less
effective (see Figure 14).
senior HR executives stated “attracting and retaining
talent” was their number one priority.12 Similarly, a Comments from our participants also suggest that
recent study by the talent management software firm their current reputations in the marketplace provide
SuccessFactors states that over 60 percent of firms them with an advantage in the war for talent. As one
indicate that talent retention is a critical issue and that Korean consumer products company’s HR manager
almost half cite talent acquisition as a key challenge.13 notes, “Since our brand image is very good and well
Given all of the publicity associated with early retire- known to Korean candidates, we have a good hiring
ments, talent shortages and the like, why do the HR position in the labor market.”
executives we surveyed appear less concerned with
Do these findings suggest that companies have
attracting and retaining talent?
cracked the code for talent? Or, do they believe that
One potential explanation relates to control. HR since no company is particularly effective in this
executives may believe they have more control over domain, their corporate brands truly differentiate
skill development than employee attraction/retention them in the marketplace? In either case, companies
Figure 14. How do you think your ability to attract/retain key employees compares with your competitors?
(Percent)
Much more successful versus competitors

Somewhat successful versus competitors
Equivalent
Somewhat less successful versus competitors
Much less successful versus competitors
Don’t know
0 10 20 30 40 50
31
should be very cautious in overestimating their important factor, and 42 percent suggest that a
ability to attract the best and the brightest. Given the company’s track record for transforming itself is also a
departure of older employees, the smaller number strong attractor (see Figure 15).
of Generation Y employees who will be replacing
them, and the increasing demand for talent around One VP of HR Process and Systems from the mining
the globe, attracting and retaining talent is likely to industry, which as a whole is facing significant
become more, rather than less, of a challenge. As workforce shortages, states that, “Our company
highlighted in a recent report by IDC: “The typical attracts candidates due to its good branding in the
organization does not have a handle on the effect that market; we leverage the fact that people in the industry
talent shortages and the graying workforce may have want to work here.” Even government agencies have
on the firm’s ability to execute on its future strategy. begun to realize the importance of perception in the
It is imperative that HR lead the way in conducting a market, as one HR executive notes, “This organization
risk assessment now. Once the risk is understood, HR is seen as an icon to potential employees – built from
can then help alleviate these risks by putting the right its strong and successful reputation, career progres-
talent strategies in place – strategies for identifying top sion opportunities and good values, which are aligned
performers, increasing retention and positioning for with those of our employees.”
future talent acquisition.”14
While our study underscores the importance of
external branding, it also points to areas that HR
Image counts: Putting your best foot forward in executives believe are less important in grabbing
the talent marketplace the top prospects in the talent pool. For example,
Survey participants clearly believe an organization’s only one-third indicate that equal or higher compen-
image in the marketplace is a primary driver of sation compared to market averages is a primary
employee attraction. Almost 50 percent of companies attractor. However, this opinion varies considerably
believe that a positive corporate reputation is an by geography. While only 11 percent of Japanese
Figure 15. What do you believe are the most important characteristics that attract candidates to your organization?
(Percent)
Positive corporate reputation

Company has a track record of transforming
itself and continuing its success in the market
New or challenging responsibilities
Clear career growth opportunities

Compensation and benefits equal to, or greater
than, industry and/or local norms
Company values are aligned with personal values
Ability to balance work and life demands
Opportunity to build specific skills
Educational opportunities
Opportunity to work with a specific manager or
set of peers
0 10 20 30 40 50 60

companies rank compensation as an important factor, the job market. More than 70 percent of the Monster
almost half of the Asia Pacific survey respondents study respondents indicate that these are important
outside of Japan see it as valuable. factors when deciding on a new opportunity.15
Similarly, only a small percentage of executives believe Opening doors: Creating opportunities for your
work-life balance is a strong enticement, with only 18
best and brightest
percent ranking this as an important factor. However,
42 percent of organizations in the public sector identify While reputation appears to be an important factor in
balance as a powerful attractor, suggesting that bringing people to the table, creating career opportuni-
government agencies and nonprofits may be targeting ties seems to be the primary reason for keeping them
individuals who are looking for alternatives to the in the fold. Our participants believe the most important
typical demands of the corporate world. factors for retaining key employees are providing them
with new and challenging responsibilities (48 percent)
We recognize that these perspectives are based on and clear career growth opportunities (43 percent)
the opinions of HR executives, rather than potential job (see Figure 16).
candidates. However, a recent study of job seekers by
Monster and Development Dimensions International For example, one European company’s head of HR
confirms that positive corporate reputation, potential Operations states retention “is about individual growth
for job security and the opportunity to gain new and employee engagement,” while an industrial
responsibilities are high priorities for those currently in products firm’s CHRO from Asia Pacific notes that, “If
we don’t show/give them opportunities for growth, our
employees will leave the firm.”
Figure 16. What do you believe are the most important characteristics that help retain candidates within your organization?
(Percent)

Company has a track record of transforming itself
and continuing its success in the market

Opportunity to work with a specific manager or set
of peers
0 10 20 30 40 50 60
33
Implications company set out to develop a learning experience
In today’s business environment, we clearly see that not only leveraged coursework, but also
the importance of managing the entire employee incorporated mentoring, collaboration and knowledge
lifecycle, from attraction and recruiting through management. IBM designed a program that not
development and retention. However, our study only allowed it to tailor the learning experience to
suggests that companies are primarily focused particular needs (e.g., experienced outsiders versus
on the development side of talent management university hires), but also to tap into the knowledge
– the building of skills among current employees. and experience of others within the company. As a
In an environment where technologies are rapidly result of using this process, new sales professionals
changing, employees are more frequently moving were able to customize learning, apply the new tools
between jobs, and work is more knowledge- as part of their day-to-day jobs and tap into coaching
intensive, this focus appears reasonable. resources for feedback.
Given how quickly new skills need to be acquired, However, despite the respondents’ emphasis in this
companies relying on resource-intensive learning strat- area, simply focusing on employee development may
egies, such as classroom instruction and on-the-job not be sufficient to address today’s changing labor
training, may find themselves struggling to keep up markets. In many sectors and regions, companies
with demand. Blended learning programs that balance are dealing with talent shortages on a scale not seen
the strengths of distributed learning technologies with since the dot.com era. According to a 2007 Manpower
opportunities for face-to-face engagement will play an study of 37,000 employers in 27 countries, 41 percent
increasingly important role in building the workforce of companies worldwide are having difficulty filling
of the future. These solutions appear to bring together positions due to a lack of suitable talent.16 While orga-
the best of both worlds: coupling the advantages nizations may be comfortable today with their ability
of distributed learning, such as the ability to easily to battle for talent, the aging workforce and increased
disseminate content, track results and allow individuals competition for workers will place new pressures on
to learn at times of their own choosing, with opportuni- companies to rethink their ability to attract candidates
ties to meet with experts, obtain coaching and apply and retain high performers. As one technology firm’s
skills to the job environment. HR leader remarks, “Attraction and retention will get
tougher for us; we must be able to compete.”
We’ve seen the value of blended learning within IBM
itself. Our sales organization needed to train several From our experience with clients, we see a number of
thousand salespeople and compress 300 hours of leading practices in attracting candidates. One comes
training into a six-month window. At the same time, the from the world of customer relationship manage-
organization needed to increase the average revenue ment. It includes developing a detailed understanding
per salesperson. Recognizing the significant amount
of on-the-job knowledge required to sell effectively, the

of the wants and needs of various segments of the While companies are already taking an analytic
labor pool (e.g., Generation Y workers versus retirees), approach to attraction, leading practices suggest
capturing information about potential candidates, applying this same rigor to employee retention. This
focusing recruiting efforts on high-value segments, and starts with an understanding of the business: deter-
tracking and measuring results. Technology can play mining those key areas where employee retention is
an important role in enabling an effective candidate critical. Identifying those employee segments that
relationship management approach. As stated in a require specific focus can help firms prioritize and
recent HR Magazine article, “Even though candidate concentrate resources on those populations most
relationship databases differ from CRM databases, the vital to success. By assessing the retention drivers,
basic tools are the same: The technology is used for which may be very different for different segments
building a ‘brand,’ communicating regularly, highlighting of the workforce, companies can then identify the
products [job openings], nurturing candidate interest, appropriate mix of employee retention techniques.
and collecting data on skills and capabilities over Using an analytic approach, organizations are able
time.”17 Companies are even leveraging virtual worlds to look beyond global retention indicators and take
as a way of further enhancing candidate relationships a more granular approach toward mission-critical
as illustrated by Manpower (see sidebar, Attracting workforce segments. At the same time, companies
the next-generation candidate: Manpower Island in need to avoid conflicts between their compensation
Second Life). and performance management models and their
retention strategies.
Another strategy we see organizations using is to
attract individuals from nontraditional labor pools. As Initially, it may seem that HR “owns” the management
competition intensifies for existing talent, companies of the employee lifecycle. However, while HR can
are starting to look for alternative labor sources, such be the primary driver of strategies and foundational
as retired workers and corporate alumni, women reen- programs, the actual execution of these efforts
tering the workforce after having children and disabled requires close coordination across multiple areas.
individuals seeking a workplace environment attuned Developing a brand that attracts potential candidates
to their needs. As one Japanese telecommunications requires capabilities found in Marketing, Advertising,
company’s HR Development Manager remarks, “We IT and Media Relations. Blended learning efforts are
also are trying to rehire women and people who retired dependent upon the interaction of the learning function
at the mandatory retirement age.” These individuals and the IT department, with proper direction and
not only bring significant knowledge and expertise to involvement from the lines of business. The retention
the table, but may offer greater organizational loyalty of key talent is a critical responsibility of line managers
as well. who work with people on a day-to-day basis,
understand their personal needs and aspirations, and
help shape the overall corporate culture and working
environment. While HR can take the lead, ultimately it
takes the commitment and active involvement of the
entire C-suite.
35
Attracting the next-generation candidate: Manpower Island in Second Life
How does a sixty-year-old company position itself as an employer of choice in today’s rapidly changing world? Manpower, a global
provider of permanent, temporary and contract placement with over 4,400 offices in 73 countries, did so by recognizing and acting
upon several important shifts in its marketplace. Over the last several years, the company has been experiencing an increased
demand from customers seeking to fill positions involving virtual work – such as work-from-home opportunities or outsourced
roles. The company is also watching the demographics of one of its primary target-employee pools gravitate toward a younger, more
technology-savvy population. As an organization that aims to be the “global positioning system for people’s careers,” the company
recognized the need to position itself as a leader in understanding the future of work.
To accomplish this, Manpower decided to launch an island in Second Life, a virtual community where residents, known as avatars,
live and work in a variety of three-dimensional environments. More than 7,000 businesses currently operate in Second Life,
which has more than 5 million individual “residents.”18 Manpower Island, launched in July 2007, is a place where job seekers and
employers can come together to learn about the world of virtual work, share ideas and interact in a variety of different online meeting
spaces. The island offers a number of features, including an orientation trail that illustrates how to effectively build a presence and
navigate around Second Life, and areas that provide guidance on developing an online resume, preparing for physical and virtual
interviews and locating employment in a virtual world. On this island, avatars staffed by Manpower employee volunteers are available
to guide individuals around the site, offer advice and listen to the ideas and concerns of visitors.
Through its presence in Second Life, Manpower expects to drive traffic toward its traditional business and foster awareness among
a new set of technology-aware candidates. Not only does the site serve as a source for information, it also allows Manpower to
collaborate and engage with a new customer base, capturing additional thoughts and trends that potentially will allow it to stay one
step ahead of the market. Manpower hopes to reinforce in the minds of its own employees the need to anticipate and stay abreast of
changes in the marketplace and the evolving role of virtual work.
China’s first freeway was opened in 1988. Today, the total length of China’s
freeways rank second in the world. The Central Freeway Interchange, in
Shanghai, displays the ambitious municipal transportation projects that have
36 Unlocking the DNA of the Adaptable Workforce linked China’s most populated city to its Western territories.
SECTION FOUR
SECTION FOUR
Driving Growth through Workforce

Analytics
“Until recently – and perhaps even now – 90 percent
of HR personnel’s job has just been about obtaining
the data rather than analyzing it!”
– VP of HR Operations, European industrial company
Any meaningful discussion of an organization’s workforce

strategy needs to start with a conversation regarding
its business direction. While HR has made progress
in contributing to these dialogues, respondents state
they lack the appropriate data and information to make
strategic decisions. If the workforce is truly to be valued
as an asset, much like financial capital or brand equity,
the entire C-suite, not just HR, will need more robust and
accessible information about current and future talent
needs, employee productivity and resource availability.
As echoed in a recent IDC report, “Indeed, the future of
business is going to require a more data-driven, fact-
based method to hire, pay, and reward top performers.”19
Traveling down two paths to success

Companies are focused on addressing two main
business challenges. For the majority (58 percent) of our
respondents, the first priority is operational effectiveness
– improving results from existing processes and practices
using the same or fewer resources (see Figure 17). In
addition, a number of organizations are attempting to
grow their top-line revenue through the development of
new products and services (38 percent) and expansion
into new markets and geographies (37 percent).
39
Figure 17. What do you see as the primary business challenges currently affecting your organization?
(Percent)
Improving operational effectiveness
Developing new products/service offerings
Expanding into new markets/geographies
Increasing profit margins
Improving product/service quality
Increasing revenue from current operations
Addressing regulatory challenges
Increasing customer loyalty
Integrating newly acquired companies
Developing new distribution channels
0 10 20 30 40 50 60
Operational effectiveness and growth are not In contrast, companies that prioritize developing new
necessarily mutually exclusive options. More than products or services appear to be more focused on
50 percent of the companies that selected opera- attracting qualified candidates. Recognizing the signifi-
tional effectiveness also identified growth as a top cant time and effort it takes to build the necessary
business challenge. In some circumstances, these capabilities from within, companies are looking beyond
two strategies may be seen as complementary, with their organizational walls for talent.
an HR leader from one aerospace company noting,
“Operational effectiveness feeds and provides funding
Figure 18. Linking business challenges to workforce issues.
for new development of products and services.”
However, each of these strategies implies a different Organizations that are facing Are more likely to be concerned
set of workforce challenges, and the collective burden the following challenges: with:*
of investing in multiple workforce priorities may leave Improving operational • Aligning employee skills with
companies financially strained. effectiveness current organizational priorities
Developing new products/
• Attracting qualified candidates
Business needs drive workforce challenges service offerings
Figure 18 highlights some of these key workforce differ- • Rapidly developing skills to
address current/future business
ences. Companies that cite improving operational Expanding into new markets/
needs
geographies
effectiveness as a top priority see their major workforce • Redeploying/realigning resources
challenge as the alignment of employee skills with against new opportunities
current organizational priorities. As companies seek to Note: *statistically significant areas of concerns.
accomplish more with the same or fewer resources, Source: IBM Global Human Capital Study 2008.
employees need additional skills to perform in a variety
of functional and technology disciplines.

Rapid skills development is high on the list of orga- this is only a first step. HR leaders need to go beyond
nizations expanding into new markets. Given that the one-way translation of business strategy and focus
moving into new territories or working with new more on establishing a two-way dialogue that influ-
channels requires numerous people to adapt quickly ences business direction. A U.S. chemicals company’s
to new business conditions, it is not surprising that SVP of HR explains, “Clearly, being a partner and influ-
these companies are placing an emphasis on speed. encing business strategy is the goal of HR. However,
These organizations also have difficulty redeploying or culturally, the pace and method of achieving this role
realigning resources to these new opportunities. depends on what HR can deliver and demonstrate,
both in its ability to provide business value and its
Different business strategies require different workforce ability to execute.”
investments. Making the appropriate choices involves
a two-way dialogue between HR and the lines of Data and information: Workforce
business. Are these discussions taking place consis-
transformation’s Achilles heel
tently within today’s organizations?
So what’s holding HR back from contributing to
One step closer: HR moving beyond the business strategy and driving improved workforce
performance? One issue centers on the inability of
transactional role
the organization to make use of its human capital data
The good news is that after years of effort, HR has and information. Only 6 percent of companies inter-
begun to make headway as a strategic contributor. As viewed felt they were very effective at using human
Figure 19 shows, 56 percent of respondents state they capital data and information to make decisions about
actively participate and provide resources to business the workforce.
transformation efforts. Fifteen percent are actually
driving these transformation efforts and are held As shown in Figure 20, the primary barriers preventing
accountable for them. organizations from developing insights from their data
stem from a lack of systems integration. Taking a closer
However, only 39 percent of organizations report that look at the top four areas of weakness shows that
their workforce strategies are both driven by, and organizations with poorly integrated HR systems are
provide input into, the overall business strategy. While significantly less likely to effectively use data to make
another 43 percent of HR organizations use the overall workforce decisions. This is reflected in the sobering
business strategy to develop their workforce strategy, comments of one postal company executive who
Figure 19. How would you best describe HR’s role in ongoing business transformation efforts?
(Percent)
HR drives business transformation efforts and

is accountable for their outcomes
HR actively participates and provides
resources to business transformation efforts
HR provides advice and counsel to business
transformation efforts
HR is aware of business transformation efforts
occurring
0 10 20 30 40 50 60
41
Figure 20. Which barriers are most likely to prevent your organization from using human capital data and
information to make workforce decisions?
(Percent)
Human capital systems are poorly integrated

Human capital systems are not well integrated with other
organizational systems (e.g., financial, sales)
Metrics are not well defined
Inability to extract information from our HR systems
HR personnel have lack of experience analyzing data in order to
make decisions
Quality level of human capital data is suspect
Managers unwilling to access information
HR personnel not oriented toward using data in decision making
Lack of executive level support
Source: IBM Global Human Capital Study 2008. 0 10 20 30 40 50
states, “We currently have 42 different HR systems in workforce productivity. These more strategic measures
place, making it hard for managers to readily access may be more difficult to collect, evaluate and interpret,
aggregated data across business silos.” yet may provide greater insights into how to improve
workforce performance.
If organizations don’t feel the data they have at their
disposal is complete or accurate, they can not use it to When data is available, do organizations have suffi-
make decisions about the workforce. At the same time, cient talent in place to analyze human capital data
if the data exists, but is too difficult to access, it will not and inform business strategy? In this study, we did
be used. Either constraint could prevent the organiza- not find direct evidence that the qualifications of HR
tion from using metrics to drive business decisions. personnel present significant roadblocks; only 24
Indeed, our research suggests that only 30 percent of percent cite this as a critical issue. However, it is likely
organizations use human capital metrics to evaluate that without accurate and reliable human capital data,
many or all of their business transformation efforts. no one – not even the most qualified analysts – can
“Whatever data we’ve had, we use; but we haven’t confidently make fact-based decisions that provide
had much data,” shares the SVP of HR of a U.S. travel insights to business clients. As one energy company’s
company. HR Director explains, “I cannot speak of a manager’s
unwillingness to extract information, or lack of experi-
As Figure 21 shows, most organizations are using ence when analyzing data, since we don’t have a
measurements that are either relatively easy to track system yet. The first step is the implementation of
(such as employee turnover), based on percep- the system, and then we will be advancing in other
tion (such as employee engagement/satisfaction) or subjects.” What we have seen in previous studies is
related to employee costs. Relatively few are using that once the data becomes available, issues associ-
metrics such as revenue per employee or employee ated with the analytic capability of HR personnel begin
utilization, which may provide greater insights into to surface.20

Figure 21. Which metrics does your organization use to evaluate overall workforce effectiveness?
(Percent)
Employee retention/turnover
Employee engagement/satisfaction
Cost per employee
Labor costs/capital costs
Customer satisfaction/loyalty
Revenue per employee
Units of output per employee
Percentage of employees utilized
Metrics not used to evaluate workforce effectiveness
0 10 20 30 40 50 60 70 80
Developing a new capability Through their efforts in the top four areas, ranging
We asked survey respondents what steps they are from greater integration to improved metrics defini-
taking to improve the use of human capital data and tion, organizations appear to be making necessary
information to make workforce decisions. Figure 22 strides toward developing the foundational require-
suggests that organizations are working to solve the ments needed to make fact-based decisions. Several
data and systems issues. comments from our respondents validate this direction.
Figure 22. Which steps are being taken by your organization to improve its ability to use human capital data and information to
make workforce decisions?
(Percent)
Deploying tools to make it easier to analyze

human capital data and information
Improving quality of human capital data
Integrating/unifying human capital systems
Improving definitions of metrics
Educating HR personnel on using/extracting
information from HR systems
Providing dashboards to managers/employees to
view critical performance statistics
Integrating/unifying human capital systems with
other systems (e.g., financial, sales)
Educating employees on using/extracting
Recruiting HR personnel with more
analytical backgrounds
0 10 20 30 40 50 60
43
For example, on the metrics and analysis front, a VP weight. As the analyst firm AMR states, “Companies
of Talent Management from a U.S. telecommunica- have been investing in tools to better manage other
tions company explains, “We are moving in a positive business process areas. Now it is time to treat human
direction on measurement and have monthly meetings capital as the asset that it is.”21 Having this information
on our HR scorecard and quarterly assessments on will allow HR leaders’ insights, and subsequent recom-
diversity, talent, commitments to business, etc.” An mendations, to be taken seriously enough to influence
Australian executive sees the potential upside from his business strategy and drive transformation efforts (see
firm’s integration efforts, stating, “Faster access to more sidebar, Better human capital information improves
usable management data would improve the speed resource capacity management).
and quality of business decisions, while reducing risk.
Also, since workforce costs represent a significant The entire corporate leadership team, not just HR, must
proportion of total costs, the resulting savings from the take responsibility for providing the systems and tools
more effective use of human capital can be significant.” needed to develop this strategic insight. To get started,
organizations must first verify that data sources used
Implications by strategic HR personnel are of high quality, consis-
tent with other reporting systems and accessible
It is clear that organizations pursuing operational effec-
through data warehousing and Web 2.0 interfaces. As
tiveness and growth strategies are concerned with two
HR authors Dave Ulrich and Wayne Brockbank write,
different sets of workforce challenges. This illustrates
“If it’s warehoused in files and never fully deployed,
the need for close integration and ongoing dialogue
it might as well not exist.”22 HR itself can not take
between the HR organization and the business. Not
responsibility for this deployment alone, but instead,
only does HR need to be able to translate the organi-
must work with both IT and line-of-business execu-
zation’s business strategy into an executable workforce
tives to provide relevant information to the appropriate
plan, it must have the data and a seat at the strategic
decision makers.
table to provide input back into the corporate strategy
on a continual basis. Prior IBM research has identified that many HR
organizations have notable shortages in the analytic
Because so many organizations lack the necessary
skills needed to provide more strategic services.23
HR data and information, it stands to reason that many
There are several potential options for closing this skill
HR organizations have difficulty playing the role of
gap. For example, providing education to existing HR
strategic partner. No matter how much respect the C-
professionals can improve their ability to think and
suite may have for the CHRO, until the HR organization
act strategically. Bringing in HR professionals with
has access to workforce data and information with
analytic skills from outside the company can increase
the same level of timeliness, consistency and validity
knowledge and capability, but there is typically a time
as the financial or operational data available to the
lag between finding talent in the outside market and
CFO or the COO, its insights will not hold the same
getting them up to speed. Personnel rotated in from
other parts of the business, possibly Finance or Audit,

can also bring the needed skills to the department.
Lastly, mentoring individuals as part of their day-to-day Better human capital information improves
job activities will make the HR staff more comfortable resource capacity management
as they apply their new analytic skills. All of these A medium-sized health care company needed to reorganize
efforts can upgrade the competency of HR personnel its project-based research and development workforce
and make a difference in delivering strategic insights. to meet growing demand. A key driver for changing its
resourcing model was the need to deploy similar resources
Once the data is available and the personnel have across multiple products. The company was also seeking
the skills necessary to analyze the information, what a consistent and automated demand forecasting process
impact will this have on workforce performance? to support faster decision making and scenario modeling.
That depends on the type of data being analyzed. These initiatives required a more data-driven approach to
Traditional HR analytics focus on understanding the workforce management.
effectiveness and efficiency of HR as an organiza-
To accomplish this, the firm started by classifying
tion, measuring the cost of delivering HR services
employees by skill type and developing roles based on these
in relation to the size of the total employee popu-
various skill categories. Employees were then identified
lation or total revenue of the organization. While
by role, and employee allocations were tracked by project.
this information is beneficial in analyzing ways to
As a result, resources could be deployed when and where
manage costs, it typically does not provide insights
needed to more cost effectively staff projects.
into how to improve workforce performance. For
example, analyzing recruiting metrics in order to fill At the same time, it began to estimate how many projects of
open positions more quickly does not help ascertain each type would be in the pipeline over a three- to five-year
whether the new recruits are better performers. period and then identified the demand for each role based
Rather, the focus of workforce analytics must be on on project type. This data allowed the firm to estimate
levers such as employee productivity that influence demand for each role and thus skill set, and ultimately
the organization’s ability to meet business objec- determine hiring needs.
tives. HR, working more closely with the business, A more structured, data-driven approach enabled the
can monitor and influence the behaviors that have company to forecast equivalent FTE needs for permanent,
a direct impact on business performance. The more contractor and outsourced work. This activity- and role-
aligned the workforce metrics are with business based approach brought more rigor to short- and long-term
priorities, the greater the ability to improve workforce workforce planning. It also equipped resource managers
performance to meet business goals. with the data to assign work to individuals with the
appropriate skill sets.
If HR can solve the significant data and integration
challenges that have been consistently identified by Employees are now deployed much more effectively by
our respondents and take inventory of its own analytic explicitly estimating and recognizing workforce peaks and
capabilities, it will be in a position to not just react to troughs and assigning new project work that fits with avail-
business strategy, but also provide meaningful input ability and expertise. This effort has allowed the company
into the strategy itself. With better data and information, to quantify its longer-term workforce needs, reducing costs
we would expect that more companies will “close the through a better understanding of when to allocate work to
loop” between business and workforce performance. employees, use short-term contractors or outsource.
45
CONCLUSION
Your business isn’t standing still. Can your workforce becoming scarce commodities. Organizations need
keep pace? to redouble their efforts to develop skills and provide
learning experiences to future business leaders to
Changing business models, demographics and prepare them for their increasing responsibilities.
customer trends are forcing companies to rethink the
way they use human capital to address today’s chal- Data and information represent the lifeblood of any
lenges and tomorrow’s uncertainties. An adaptable organization. Many organizations continue to struggle
workforce can more easily react to these changes in with a lack of reliable, consistent and meaningful data
environment and take advantage of these new market about employees, their skills and competencies, and
opportunities. Our conversations with over 400 HR most of all, their performance. Without these insights,
leaders around the globe, as well as our ongoing client companies can not expect to effectively acquire
work, offer fresh insights into how organizations can new talent, find experts from around the company,
transform their workforces to address potential shifts in determine future capability gaps, and reward and
the business landscape. retain strategically important contributors. While
companies have invested significant time, energy and
We believe HR has a strategic mandate to provide resources fixing a myriad of information challenges
guidance and expertise on workforce effectiveness that have plagued their financial systems and supply
issues. But it can’t do so alone. Organizations need to chains, providing these same capabilities for their
approach workforce transformation as an integrated human capital assets still remains a work in progress.
set of activities, driven by the executive suite. Line
managers who are plugged into employees’ day- Like any complex change, transforming the workforce
to-day work activities, problems, ideas and career must be architected from the outset, rather than
aspirations must step up as well. The CIO’s office implemented as a series of independent initiatives.
needs to identify and implement new technologies Each component of a workforce transformation needs
that can highlight workforce trends, locate experts, to be aligned both with the organization’s overall
deliver learning content and connect individuals business direction and with other improvement efforts.
separated by time and distance. Linking workforce For example, investments in upgrading the firm’s
productivity to financial performance and establishing leadership development programs will be wasted if
consistent data standards are all tasks that involve the organization fails to create career opportunities
significant time and attention from the CFO. Marketing where the new skills can be applied. Rolling out
can contribute messaging that can motivate potential a new virtual collaborative technology will be less
candidates to join the organization. And so on. effective if performance measures are based solely
on individual accomplishment. Therefore, various tasks
Building the adaptable workforce requires leadership. and programs associated with improving workforce
Not just in the executive suite, but across all levels of performance need to be anchored to a common
the organization. When it comes to developing leaders, philosophy and transformation blueprint and constantly
however, our study paints a dubious picture. Not focused on performance outcomes.
only are companies wrestling with the lack of current
leaders, they have highlighted their inability to develop The Human Resources function has a unique window
new ones. Just as the worldwide expansion is fueling to make a strategic business contribution by shaping
the demand for individuals who can communicate the adaptable workforce. If there ever was a time and
an inspiring vision, provide guidance to global teams an opportunity for HR to prove its strategic mettle, it
and deliver on business commitments, they are fast has arrived.
Since 1990, when Shanghai’s Pudong district was designated a

Special Economic Zone, it has been transformed from marshy
fields and warehouses to ultramodern towers housing the
city’s economic and trading centers. These sculptures in
46 Unlocking the DNA of the Adaptable Workforce Lujiazhu Green are symbols of this transformation.
APPENDIXES
APPENDIX A
Regional Viewpoints
Both the 2005 and 2008 IBM Global Human Capital Studies
highlight varying human capital challenges faced by
companies located in different regions. These differences
are based on a host of factors, ranging from economic
growth rates to technology maturity to business traditions
and customs. Local variations in human capital infrastructure,
attraction/retention drivers and education levels can all have
an impact on how organizations transform their existing work-
forces or acquire/build talent in new locations. The following
pages provide additional perspectives that highlight some of
the significant differences in workforce management practices
and trends that we see in each of the major geographies.
49
ASIA PACIFIC (excluding Japan)
Encountering the challenges of rapid growth
Companies in Asia are also expanding beyond their home

Key points: markets and creating a more global footprint. The head
• Asia Pacific respondents have a strong focus on leadership of HR from one financial services company summarizes
development.
this issue by stating, “Building skills and leadership bench
• Compensation is a strong influencer in attracting new talent.
strength are fundamental to expansion into other parts
• Career development is an important tool in reducing attrition.
of Asia. We are currently enhancing our talent strategy
to support this.” This rapid growth strains organizations’
Growth continues to remain on the agenda for the
already limited leadership development capabilities.
countries in Asia Pacific. For the region as a whole, recent
projections for gross domestic product (GDP) growth The drivers of attracting and retaining talent in Asia
are estimated to be in the neighborhood of 8 percent.24 Pacific also differ somewhat from those in other regions.
Given such rapid growth, significant attention is being Companies in Asia Pacific report that compensation
paid to the role of leadership. Firms in this region indicate plays a stronger role in attracting candidates (46 percent
greater challenges stemming from an insufficient number versus 33 percent worldwide) and increased career
of leaders and leadership development constraints (88 opportunities play a greater role in employee retention
percent as compared to 76 percent in the global sample). (53 percent versus 43 percent worldwide). The financial
dimension is particularly important in China, where over
Many companies, having grown at a rapid pace, have not
half the companies indicate compensation is a primary
yet established a rigorous, sustainable leadership devel-
vehicle for attracting candidates. As an HR leader from
opment process. As one technology executive notes, “We
one electronics company notes, “At lower levels, money
have no leadership model, no leadership assessment
is always a problem and a motivator for movement – at
mechanism. The criteria for selecting leaders are mainly
the higher levels, it is more about better jobs and oppor-
based on the subjective judgment of the management
tunities.” This can result in either a virtuous cycle, where
team.” While Chinese firms are finding success in the
growth allows companies to pay their talent above-
use of executive mentoring, it is difficult to scale such
market wages, or a vicious spiral, where a lack of growth
approaches on a widespread basis.
makes it difficult to attract the best and brightest and
Tight labor markets in certain sectors are also making it constrains future growth potential.
more difficult to develop and retain leaders, as opportu-
nities outside the organization are often easy to obtain.
For example, companies in the natural resources sector
in Asia Pacific are facing significant personnel shortages
at the same time as customer demand for raw materials
continues to increase. As one mining company’s VP of
HR states, “With unemployment less than 3 percent,
there are not enough people, and therefore people have
more choices.”

JAPAN
Moving in a more flexible direction
centers in Japanese-speaking locations such as Dalian,

Key points:
• Japanese organizations recognize the need for greater China reflects this new trend. Given the aging issues
workforce flexibility. associated with the Japanese population, as well as
• Personal values play a stronger role in attracting/retaining recent legislative changes, Japanese firms are also much
key personnel. more likely to bring back retired employees (76 percent
• HR personnel are less experienced in using HR metrics and versus 26 percent globally).
analytic techniques.
HR executives within Japan also provide a different
Historically, Japanese companies have been known perspective on employee attraction and retention.
for their unique employment model, in which workforce Personal values play a much stronger role in both
stability and lifetime employment were important char- attracting and retaining employees compared to other
acteristics. However, an emerging period of sustainable regions. “To secure a job, we always talk about our
growth, coupled with changing workforce demographics, culture face to face and ask them [recruits] to join our
is causing Japanese firms to rethink their overall company after they are confident that their values match
workforce management approaches. ours,” reports the VP of HR from a consumer products
company. Providing new and challenging responsibili-
Japanese companies indicate they have been challenged ties is also seen as a strong attraction and retention tool
in their ability to redeploy/realign resources to new oppor- – as one automobile manufacturing executive reports,
tunities. For example, the HR leader of one automotive “We think that individual growth and achievement is the
company indicates, “We could not reorganize people most important incentive…we want them [candidates]
because of legal limitations…and we could not relocate to know that the company is focused on ‘developing
people according to business needs due to a lack of people.’” Specific skill development is seen as less of an
skills and the cultural tendency for each department to be attractor, as individuals are expected to learn multiple jobs
independent.” throughout their careers.
Recognizing this issue, these companies are clearly Japanese firms place less emphasis on using human
working to increase the flexibility of their employment capital analytics and metrics than other firms around
models. As one industrial products executive notes, the world. While they do believe there is organizational
“Relying on…the regular workforce is risky in a business support for using human capital data, Japanese firms are
where there are big changes in the business environ- less likely to deploy tools that make it easier to analyze
ment.” Compared to other organizations in the worldwide the data (32 percent versus 55 percent globally), develop
sample, Japanese companies are more likely to have dashboards (19 percent versus 39 percent), or integrate
increased their use of global staffing agencies (57 percent their HR systems with other organizational systems
versus 35 percent globally), offshoring (54 percent versus (16 percent versus 31 percent). As a result, Japanese
39 percent), contingent workers (78 percent versus 47 companies are finding it difficult to use quantitative data
percent) and tiered labor systems (57 percent versus to make resourcing, staffing and training decisions – as
34 percent) over the last two years. The rise of offshore one manufacturing company’s HR Planning Manager
51
notes, “Our talented person data is not updated suffi-
ciently – and we cannot utilize data effectively when we
look for a talented person.”
Japanese organizations place less emphasis on devel-

oping an analytic capability within their HR function
– either through hiring HR personnel with analytic back-
grounds (8 percent versus 22 percent worldwide) or
educating HR personnel on the use of human capital
analytics (24 percent versus 43 percent). Finally,
Japanese companies are less likely to use metrics such
as employee satisfaction (41 percent versus 64 percent),
turnover (43 percent versus 70 percent), labor/capital
costs (27 percent versus 50 percent) and employee
utilization (5 percent versus 21 percent) to measure
workforce effectiveness.
Despite these challenges, we find some Japanese

companies beginning to take a more data-focused
approach to managing their human capital. As one
consumer products executive indicates, “We have to
analyze our employee status and specifications in detail,
and we can improve our HR strategy by matching our
business strategy and long-term human capital plan.”
Similarly, one financial services firm’s HR leader states,
“We’ve just started to accumulate skill data and want
to integrate various HR systems in the future.” These
examples suggest that many Japanese companies are
starting to build upon their key areas of expertise and
more effectively identify and develop talent across their
organizations.

EUROPE
Needing to move HR to the fast lane
One of the challenges that European firms face is an

Key points:
apparent lack of interest and capability in the area of
• HR primarily takes an advisory rather than a proactive role
in workforce transformation. human capital analytics. Respondents indicate their HR
• Organizations are less focused on using analytics in personnel are less likely to use data in their decision-
decision making. making processes. As one Italian insurance executive
indicates, “Unfortunately, our HR department never
From a workforce management standpoint, orga- creates any materials for decision making – our leaders
nizations in this region face a host of challenges. do not know what data we have and how this data can
Overall, the European economy is becoming more be used.” European firms indicate there is a lack of orga-
knowledge-intensive – it is estimated in coming years nizational support for using human capital data. Such
that knowledge-based industries will generate more findings suggest that these firms will have difficulty iden-
than half of Europe’s GDP and total employment.25 tifying the key data required to flag potential workforce
Shortages of skilled workers continue to increase; in issues and develop business cases for interventions. As
2005, IDC projected that an additional 500,000 workers one British governmental agency’s HR leader states, “We
with advanced technical skills would be needed across still have a lot of ‘horse-trading’ happening in our organiza-
Europe by 2008.26 The aging of the European population tion – decisions are still based on relationships and what
also has changed the demographics of the workforce we know of our people, rather than the data. We need to
– over the next two decades, the total number of people systemize this and move to fact-based decision making
between the ages of 50 and 64 will increase by 25 as opposed to intuition.”
percent, while those in the 20 to 29 year bracket will
Many European organizations recognize that HR can no
decrease by 20 percent.27
longer afford to remain a passive player with workforce
Despite these fairly substantial demographic shifts, issues. As one European bank’s head of HR notes, “We
European HR organizations still appear to take a less have to do a ‘triple jump’ from an administrative role to a
active role in workforce management issues than their consulting role to a partnership role…we will need a few,
peers worldwide. European firms are more likely to highly qualified business partners as opposed to the large
take an advisory role in business transformation efforts number of HR ‘consultants’ who have HR administration
(31 percent versus 21 percent of the global sample), on their minds.” We believe that, given the growing human
rather than making a proactive contribution of time and capital challenges in this region, other companies will
resources. As one U.K. industrial products company’s begin to follow a similar strategic path.
Group HR Director indicates, “HR is traditionally seen as
a supporter, rather than a driver of change.”
53
LATIN AMERICA
The next phase of growth
challenging responsibilities. As one financial services

Key points:
firm’s CHRO states, “Candidates are looking for quality of
• Higher turnover is causing an increased focus on skill
development and on-boarding. life and confidence in the promising future of the organi-
• Positive corporate reputation is important in both attracting zation,” while a petroleum executive highlights, “The fact
and retaining key personnel. that we are a company with a good reputation attracts
• While HR executives perceive their organizations as effective, people.” Also, a positive corporate reputation and a
they may face new challenges as their organizations and record of transformation appear to be important retention
economies increase in size. vehicles. These factors, which are somewhat different
from the attraction and retention drivers in other fast-
A recent Manpower report on the future of work in growing regions such as Asia Pacific, suggest that Latin
Latin America provides an interesting summary of the Americans are looking for companies that have a stable
workforce opportunities in the region, “The worldwide track record and are less susceptible to the business fluc-
rise in the prices of commodities and goods produced in tuations that have plagued the region in the past.
Latin America…plus a large, young workforce with fewer
economic dependents than in the past, represents a Firms in this region are fairly confident in the ability of
unique and historic growth opportunity: a demographic their HR organizations. They are less likely to cite that HR
dividend in a region with abundant economic resources.”28 personnel have a lack of experience in analyzing human
capital data or that their human capital data is suspect,
With this growth potential comes a host of workforce and are more likely to indicate that their organizations
challenges. One of the clearest messages coming from are very capable of adapting to change. As one retail
the Latin American companies in our sample is the company’s HR leader notes, “We have highly effective
increase in employee turnover over the last two years. assessment and talent identification tools…That allows
Forty-one percent report that they see a significantly us to respond to our accelerated growth.” Companies in
higher amount of turnover, while another 31 percent this region are somewhat smaller than those in the overall
indicate it is somewhat higher. Increased growth sample, which may explain their expressed confidence;
and opportunities seem to be the primary drivers of they may not have yet encountered the challenges of
this trend. One consumer goods executive remarks, process and systems integration that come with increased
“Turnover has increased because of the reactivation of size. However, another rationale may be that firms in this
the market and because the company is a trainer of region have already survived significant upheaval during
good employees who are requested by the market.” As the last decade, have effectively weathered the storm and
a result, getting new employees up to speed is cited as are well positioned from a human capital management
a key capability challenge. perspective. It will be interesting to see how these firms
position themselves during this next phase of growth.
At the same time, it appears that memories of past
economic crises still remain. Job seekers in this market
are looking for companies that have positive corporate
reputations and are less likely to be attracted by new or

NORTH AMERICA
Building the “wired” HR function
need to transfer experiences from employees in more

Key points:
mature markets to those in other parts of the world. As
• North American firms have a strong focus on “e-enabling”
one chemicals company’s SVP of HR shares, “Transferring
HR processes and activities.
• Companies recognize the need for knowledge transfer due to knowledge from the USA and other ‘mother’ markets/
changing workforce demographics. plants to emerging markets will be a significant need and
• HR appears less likely to play a leading role in workforce priority, especially in business models and cultures that
transformation because business unit leaders are in greater might not have the same values, priorities and focus.”
supply and may have more experience in leading change.
North American firms demonstrate a relatively high level
Companies in North America appear to be focused on of experience and maturity in terms of their internal
using technology as a mechanism for both lowering leadership. They are less likely to indicate a lack of lead-
costs and improving the quality of HR delivery. North ership capability than companies from other regions (24
American firms report greater success in using virtual percent versus 36 percent). At the same time, they are
classrooms and self-managed, computer-based training less likely to state that HR drives business transforma-
than other regions. These organizations are more likely tion efforts within the organization (7 percent versus 15
to develop dashboards to provide managers and HR percent globally). As one utility executive notes, “HR has
personnel with human capital specific data. They are changed from administrative to become a partner…HR
more likely using frequently asked question (FAQ) will always participate but not drive change.” Given the
systems, in which employees submit questions to a cadre of experienced leaders in these firms, it could be
database of previously addressed questions, to locate inferred that many HR organizations in North America
experts within the organization. are not being asked to play a strong transformative role
within their companies, relying more on leadership within
To take full advantage of this HR technology, companies the business units to drive change. This is in contrast to
in this region are recruiting HR personnel with analytic areas such as Asia Pacific, where a shortage of leader-
backgrounds (31 percent versus 22 percent of the global ship talent coincides with a more activist HR function that
sample). However, North American companies recognize is focused on business transformation.
that their journeys toward a more analytic HR function are
not complete – they are more likely to state that their HR While North American firms appear to be taking the lead
systems are not integrated with other systems across the in the use of analytics and technology to address HR
organization (56 percent versus 41 percent globally). challenges, they also need their HR leadership to play an
active role in the business transformation process. As the
North American firms indicate they are concerned HR leader of one information technology company that
with their ability to pass knowledge along from older recently undertook a major global resourcing program
to younger workers (39 percent versus 28 percent states, “HR was the most experienced in change – first
worldwide) and their ability to bring new employees up to among equals in terms of developing governance,
speed (39 percent versus 24 percent). As one financial communication and metrics.” Even though North
services firm’s VP of Corporate HR indicates, “If we look at American firms may have a more experienced business
the Senior Vice President level and above – one-quarter unit leadership pool, HR still needs to play a critical role in
can retire in the next five years. Our challenge is making developing and enabling future leaders.
sure the next group down has a broad range of experi-
ences that prepare them to take on big jobs.” Another
knowledge transfer focus area for North America is the
55
APPENDIX B
Study Results
What do you see as the primary business challenges currently affecting your organization?
(Percent)
Improving operational effectiveness

Developing new products/service offerings
Expanding into new markets/geographies
Increasing profit margins
Improving product/service quality
Increasing revenue from current operations
Addressing regulatory challenges
Increasing customer loyalty
Integrating newly acquired companies
Developing new distribution channels
0 10 20 30 40 50 60
What do you see as the primary workforce-related issues facing the organization?
(Percent)
the organization
new opportunities

labor regulations
0 10 20 30 40 50 60

How would you best describe HR’s role in ongoing business transformation efforts?
(Percent)
HR drives business transformation efforts

and is accountable for their outcomes
HR actively participates and provides
resources to business transformation efforts
HR provides advice and counsel to business
transformation efforts
HR is aware of business transformation
efforts occurring
0 10 20 30 40 50 60
Which of the following best describes the relationship between your organization’s business strategy and its workforce strategy?
(Percent)
Workforce strategy is both driven by, and provides

input into, the overall business strategy
Workforce strategy is driven by the overall
business strategy
Workforce strategy is developed independently
from the overall business strategy
Workforce strategy is not formally documented
0 10 20 30 40 50 60
How well does your organization perform the following workforce management activities?
(Percent)
Modify staffing based on changes

in business conditions
Forecast daily/weekly labor
requirements
Identify available staff with
appropriate skills and capabilities
Identify long-term trends in the
supply and demand for labor
Integrate employee scheduling with
other workforce-related systems
Incorporate employee preferences
into the scheduling process
0 20 40 60 80 100
Very effective Effective Slightly effective Not very effective Not at all effective
57
How would you best describe your HR organization’s involvement in the workforce management process?
(Percent)
HR is solely responsible for workforce
management activities
HR is primarily responsible for workforce management
and receives input from the business units
HR and the business units have joint responsibility for
workforce management
The business units are primarily responsible for
workforce management and receive input from HR
The business units are solely responsible for workforce
management activities
0 10 20 30 40 50 60
How has your organization’s use of the following labor flexibility techniques changed over the last two years?
(Percent)
Temporary/contingent workers
Outsourcing (within domestic market)

Offshoring (in-house or outsourced use of
employees in lower-cost markets)
Part-time workers
Global staffing agencies

Tiered labor systems (i.e., using different pay
scales for different categories of employees
Bringing back retired workers
0 20 40 60 80 100
Increased Remained the same Decreased
In the past two years, what changes have there been to the level of turnover in your organization?
(Percent)
Significantly higher than in previous years

Somewhat higher than in previous years
About the same as previous years
Somewhat lower in previous years
Significantly lower than in previous years
Don’t know
0 10 20 30 40

What do you believe are the most important characteristics that attract candidates to your organization?
(Percent)


Opportunity to work with a specific manager or
set of peers
0 10 20 30 40 50 60
What do you believe are the most important characteristics that help retain candidates within your organization?
(Percent)

Opportunity to work with a specific manager or set
of peers
0 10 20 30 40 50 60
59
How do you think your ability to attract/retain key employees compares with your competitors?
(Percent)
Much more successful versus competitors

Somewhat successful versus competitors
Equivalent
Somewhat less successful versus competitors
Much less successful versus competitors
Don’t know
0 10 20 30 40 50
How well does your organization understand the key workforce skills required in the next three to five years?
(Percent)
Very clear understanding

Clear understanding
Some understanding
No understanding
0 10 20 30 40 50
Which are the most significant capability-building challenges facing your organization today?
(Percent)
Building leadership talent

Fostering a culture that supports learning and development
Rotating leadership talent across business units/geographies
Passing on knowledge from older to younger employees
Forecasting skills needed in the near future
Cross-training individuals needed in other parts of the organization
Rapidly getting new employees up to speed
Developing basic skills across the employee base
Measuring the effectiveness of learning and development activities
0 10 20 30 40 50 60 70 80

How effective are the following employee development techniques in your organization?
(Percent)
On-the-job training
Classroom instruction provided by
your organization
Classroom instruction provided by vendors/
institutions outside your organization
Job rotation
Blended learning – combination of
classroom and Web-based learning
Mentoring
Educational reimbursement
Self-managed computer or
Web-based training
Virtual-classroom-based training delivered
over the Web
Self-study (not computer-based)
Correspondence courses
0 20 40 60 80 100
Very effective Somewhat effective Neither effective nor ineffective Not very effective Not at all effective NA or don’t know
How effective is your organization in enabling people to collaborate with one another?
(Percent)
Very effective
Generally effective
Somewhat effective
Not effective
0 10 20 30 40 50
61
How significant are the following barriers to collaboration across your organization?
(Percent)
Organizational silos inhibit collaboration
Individuals are too busy to assist others

Performance measures not aligned to
reward individuals for collaboration
Technological tools do not effectively
support collaboration
Collaboration not viewed as important
Concerns about intellectual property limit

effective collaboration
0 20 40 60 80 100
Very significant Significant Slightly significant Not very significant Not at all significant NA or don’t know
How effective is your organization in identifying individuals with specific expertise within the organization?
(Percent)
Very effective
Generally effective
Somewhat effective
Not effective
Don’t know
0 10 20 30 40 50
Which of the following does your organization use to identify key skills and subject matter experts?
(Percent)
Employee directory
Resume repository
Skills tracking database
Help desk or other support personnel
Frequently asked question (FAQ) repository
Other technology (e.g., automatic profile generation systems)
None of the above
0 10 20 30 40

How effectively does your organization use human capital data and information to make decisions about the workforce?
(Percent)
Very effective
Generally effective
Somewhat effective
Not effective
Don’t know
0 10 20 30 40 50
Which barriers are most likely to prevent your organization from using human capital data and information to
make workforce decisions?
(Percent)
Human capital systems are poorly integrated
Human capital systems are not well integrated with other
organizational systems (e.g., financial, sales)
Metrics are not well defined
Inability to extract information from our HR systems
HR personnel have lack of experience analyzing data in order to
make decisions
Quality level of human capital data is suspect
Managers unwilling to access information
HR personnel not oriented toward using data in decision making
Lack of executive level support
Source: IBM Global Human Capital Study 2008. 0 10 20 30 40 50
Which steps are being taken by your organization to improve its ability to use human capital data and information to make
workforce decisions?
(Percent)
Deploying tools to make it easier to analyze human

capital data and information
Improving quality of human capital data
Integrating/unifying human capital systems across
the organization
Improving definitions of metrics
Educating HR personnel on using/extracting
Providing dashboards to managers/employees to
view critical performance statistics
Integrating/unifying human capital systems with
other systems (e.g., financial, sales)
Educating employees on using/extracting
Recruiting HR personnel with more
analytical backgrounds
0 10 20 30 40 50 60
63
To what extent are human capital metrics used to evaluate the success of business transformation efforts in your organization?
(Percent)
Human capital measures are used to evaluate all

business transformation efforts
Human capital measures are used to evaluate
many business transformation efforts
Human capital measures are used to evaluate
some business transformation efforts
Human capital measures are generally not used
to evaluate business transformation efforts
Don’t know
0 10 20 30 40 50
Which metrics does your organization use to evaluate overall workforce effectiveness?
(Percent)
Employee retention/turnover
Employee engagement/satisfaction
Cost per employee
Labor costs/capital costs
Customer satisfaction/loyalty
Revenue per employee
Units of output per employee
Percentage of employees utilized
Metrics not used to evaluate workforce effectiveness
0 10 20 30 40 50 60 70 80
How would you rate your workforce’s ability to adapt to potential changes in the business environment?
(Percent)
Very capable
Generally capable
Somewhat capable
Not capable
Don’t know
0 10 20 30 40 50 60

REFERENCES AND NOTES
1 11
We examined a subset of 119 companies from the original “Worldwide Human Capital Management 2007 Top 10
sample for which financial information was publicly avail- Predictions.” IDC. Doc#205321. January 2007.
able. When we analyzed the top 20 percent (n = 24) of 12
“The battle for brainpower.” The Economist. October 5,
companies in terms of four-year revenue growth, we found 2006.
that over 29 percent of this group (n = 7) believed they 13
“Performance and Talent Management Trend Survey 2007.”
were very capable of adapting to change, which is signifi-
SuccessFactors. 2007.
cantly different from the overall population.
14
2 “Worldwide and U.S. HR Management Services 2007–2011
“Expanding the Innovation Horizon: The Global CEO Study
Forecast.” IDC. Doc#206320. April 2007.
2006.” IBM Global Business Services. March 2006. http://
15
www.ibm.com/bcs/ceostudy Howard, Ann, Scott Erker and Neal Bruce. “Selection
3 Forecast 2006-2007: Slugging Through War for Talent.”
“UN Habitat Jam: Reaching out to a global community.”
Development Dimensions International (DDI) and Monster.
IBM Case Study. July 26, 2007. http://www-306.ibm.com/
2007. http://media.monster.com/a/i/intelligence/articles/
software/success/cssdb.nsf/CS/BTHD-75EKLP?OpenDocu
ddi_sluggingtalent/Monster_DDI%20Selection%20Forecast
ment&Site=corp&cty=en_us
2007.pdf. Copyright Development Dimensions International,
4
Ibid. Inc. MMVII. Reprinted with permission from Development
5
Ibid. Dimensions International, Inc.
6 16
Ibid. “Talent Shortage Study: 2007 Global
7
Ready, Douglas A. and Jay A. Conger. “Making Your Results.” Manpower. March 2007. http://files.
Company a Talent Factory.” Harvard Business Review. June shareholder.com/downloads/MAN/164219164x0x87523/
2007. a49c96c9-cbfe-47ac-9207-476be0e84c20/Talent%20Short
8
age%20Survey%20Results_2007_FINAL.pdf
For further discussion of the behaviors and tools that
17
are needed to succeed in a global environment, see: Frase, Martha J. “Stocking Your Talent Pool. HR Magazine.
DeMarco, Michael, Eric Lesser and Tony O’Driscoll. Volume 52, Issue 4. April 2007.
18
“Leadership in a distributed world: Lessons from online “Manpower Inc. Launches Island in Second Life With
gaming.” IBM Global Business Services. June 2007. http:// Live Panel Discussion on the Evolving World of Virtual
www-935.ibm.com/services/us/index.wss/ibvstudy/gbs/ Work.” July 12, 2007. http://www.manpower.com/investors/
a1028184 releasedetail.cfm?ReleaseID=253774
9 19
“The capability within: The Global Human Capital Study “Worldwide Human Capital Management 2007 Top 10
2005.” IBM Global Business Services. June 2005. http:// Predictions.” IDC. Doc#205321. January 2007.
www-935.ibm.com/services/us/gbs/bus/html/2005_ 20
Lesser, Eric and Michael DeMarco. “A New Approach,
human_cap_mgt_gen.html A New Capability: The Strategic Side of HR.” IBM
10
Edmonds, Rob. “Best Practices in eLearning.” Learning-on- Institute for Business Value. June 2006. http://
demand and SRI Consulting Business Intelligence. May www-935.ibm.com/services/us/index.wss/ibvstudy/gbs/
2004; Rivera, Ray J. and Andrew Paradise. “2006 ASTD a1024781?cntxt=a1000407
State of the Industry Report.” American Society for Training 21
Manning, Christa D. and Judy Sweeney. “Making HCM
and Development. 2006. Strategic: Aligning the Workforce With Business Goals.”
AMR Research. October 2006.
65
22
Ulrich, Dave and Wayne Brockbank. The HR Value
Proposition. Cambridge, MA: Harvard Business School
Press. 2005.
23
Lesser, Eric and Michael DeMarco. “A New Approach,
A New Capability: The Strategic Side of HR.” IBM
Institute for Business Value. June 2006. http://
www-935.ibm.com/services/us/index.wss/ibvstudy/gbs/
a1024781?cntxt=a1000407
24
“World Economic and Financial Surveys Regional
Economic Outlook – Asia and Pacific.” International
Monetary Fund. April 2007. http://www.imf.org/external/
pubs/ft/reo/2007/APD/ENG/areo0407.pdf
25
Brinkley, Ian. “Defining the Knowledge Economy:
Knowledge Economy Programme Report.” The Work
Foundation. July 2006. http://theworkfoundation.com/
assets/pdfs/defining_knowledge_economy.pdf
26
Kolding, Marianne and Vladimir Kroa. “Networking
Skills in Europe: Will an Increasing Shortage Hamper
Competitiveness in the Global Market.” IDC, commissioned
by Cisco Systems. September 2005. http://www.cisco.com/
edu/emea/general/pdf/IDC_Networking_Skills_Shortage_
EW_Europe_FINAL_5_Oct.pdf
27
von Nordheim, Frtiz. “EU policies in support of Member
States efforts to retain, reinforce and re-integrate older
workers in employment,” in Buck, Hartmut and Bernd
Dworschak eds., Ageing and Work in Europe. Stuttgart:
2003. http://www.management-issues.com/display_page.
asp?section=blog&id=671
28
“The Future of Work in Latin America.” Manpower.
May 2006. http://files.shareholder.com/downloads/
MAN/164219164x0x63539/3e7d22c5-c511-425c-85ba-
9e21ee32c540/files_003.pdf

CONTACT US
About IBM Global Business Americas HR Business Transformation

Services Tim Ringo Outsourcing
Global and Americas HCM leader Mary Sue Rogers
With business experts in more than 160
tim.ringo@uk.ibm.com Global HR & Learning Business
countries, IBM Global Business Services
+44 77 34 29 09 70 Transformation Outsourcing Leader
provides clients with deep business
mary-sue.s.rogers@uk.ibm.com
process and industry expertise across
Diane Horton +44 208 832 5018
17 industries, using innovation to identify,
Canada HCM leader
create and deliver value faster. We draw on
diane.j.horton@ca.ibm.com IBM Institute for Business Value
the full breadth of IBM capabilities, standing
+1 416 478 3082 Eric Lesser
behind our advice to help clients implement
Associate Partner
solutions designed to deliver business
Alejandra D’Agostino de Castagnet elesser@us.ibm.com
outcomes with far-reaching impact and
Latin America HCM co-leader +1 617 693 6418
sustainable results.
alejandra.dagostino@ar.ibm.com
The IBM Institute for Business Value, +54 11 5070 1589 x1588 Michael DeMarco
part of IBM Global Business Services, Senior Consultant
develops fact-based strategic insights for Jeane Goncalves Rego michael.l.demarco@us.ibm.com
senior business executives around critical Latin America HCM co-leader +1 717 918 0688
industry-specific and cross-industry issues. jeaneg@br.ibm.com
+55 21 2132 3182 x3182 Holly Payton
About IBM Human Capital Associate Partner
Europe, Middle East and Africa hpayton@us.ibm.com
Management
Tim Ringo +1 770 643 1589
IBM Global Business Services Human
Global and Southwest Europe
Capital Management (HCM) focuses
HCM leader
on enabling enterprise innovation and
tim.ringo@uk.ibm.com
performance through improved workforce
+44 77 34 29 09 70
effectiveness. With more than 2,000
practitioners, Human Capital Management
Tom McCabe
has a full suite of end-to-end capabilities to
Northeast Europe HCM leader
address clients’ challenges. Our capabilities
tom.mccabe@uk.ibm.com
include workforce transformation, learning
+44 207 021 9669
solutions, knowledge and collaboration,
HR strategy and transformation and
Asia Pacific
outsourcing.
Wayne Peat
Asia Pacific HCM leader
Further information waynep@sg.ibm.com
To find out more about this study or to +65 6418 9801
speak to an HCM leader, please send an
e-mail to one of the contacts listed or to Yukiko Mitsumaki
global.benchmarking@us.ibm.com, or visit Japan HCM leader
ibm.com/bcs/humancapital MTMK@jp.ibm.com
+81 80 1393 1400
67
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Produced in the United States of America

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All Rights Reserved
IBM and the IBM logo are trademarks or

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Other company, product and service names

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IBM GLOBAL Business Services

Unlocking the DNA of the

Cover image: In conventional terms, London City Hall has no front or

6 Methodology and Demographics

9 Section One: Developing an Adaptable Workforce

19 Section Two: Revealing the Leadership Gap

27 Section Three: Cracking the Code for Talent

39 Section Four: Driving Growth Through Workforce

65 References and Notes

 Unlocking the DNA of the Adaptable Workforce

 Unlocking the DNA of the Adaptable Workforce

Creating an adaptable workforce requires more than

Figure 1. Breakdown of study participants.

By sector By number of employees By revenue (US$)

9% <1,000 15% <500 million

Source: IBM Global Human Capital Study 2008.

This man is kneeling in front of crops planted by global positioning system

Today’s business executives face a host of pressures,

Adaptability: Three core elements

Able to predict future skill needs

Effective in locating experts

Those very adaptable to change All other companies

10 Unlocking the DNA of the Adaptable Workforce

12 Unlocking the DNA of the Adaptable Workforce

Organizational silos inhibit collaboration

Individuals are too busy to assist others

Concerns about intellectual property limit

Source: IBM Global Human Capital Study 2008.

14 Unlocking the DNA of the Adaptable Workforce

Baltimore, Maryland is typical of a number of smaller cities in the United

Revealing the Leadership Gap –

A lack of leadership capability has become a significant

Without sufficient leadership talent, who will set the

Inability to rapidly develop skills to address

Lack of leadership capability

Employee skills not aligned with current

Inability to attract qualified candidates

Inability to build an engaged/motivated workforce

Unable to redeploy/realign resources against

Inability to retain key employees

Labor costs higher than competitors

Difficulty in modifying staffing levels due to local

Source: IBM Global Human Capital Study 2008.

20 Unlocking the DNA of the Adaptable Workforce

Figure 8. Leadership challenges in the industrial sector are hampering expansion.

Source: IBM Global Human Capital Study 2008.

Building leadership talent

22 Unlocking the DNA of the Adaptable Workforce

Maybank: Answering the need for leadership excellence

Shanghai Pudong International Airport is a major international gateway into China,

Cracking the Code for Talent

“Our market leadership and our international

Significant attention in the business press and the

Skill building: What’s working and what’s not

Labor costs higher than competitors

28 Unlocking the DNA of the Adaptable Workforce

Significantly higher than in previous years

30 Unlocking the DNA of the Adaptable Workforce

Much more successful versus competitors

Positive corporate reputation

Unlocking the DNA of the Adaptable Workforce

Unlocking the DNA of the Adaptable Workforce