1. IBM Smarter Workforce: A workforce readiness solution1

2. IBM Kenexa workforce science offerings directly impact talent gaps
“Talent Gaps” Present one of the Biggest Talent Opportunities in the Market
66% of CEOs report the absence of necessary skills is their biggest talent challenge…
PwC’s 2013 global CEO Study
39% of CEOs say they are “barely able” or “unable” to meet the demand for talent
- Deloitte: Disrupting the CHRO
Nearly 70% of global organizations feel they lack the required skills to compete…
- Bersin, 2013
IBM Kenexa workforce science offerings directly impact talent gaps
and differentiate the IBM Kenexa Talent Suite and Smarter Workforce solutions.

3. Science Improves our Effectiveness in Solving Workforce Challenges
Companies struggle with the effectiveness of talent acquisition continuing to rely on subjective ratings yet,
Only 56% of companies use an assessment as part of the hiring process1 spending more than $2 Billion annually2
Over 60% of organizations are increasing their investment in talent analytics2 to retain critical talent.
The rise of the independent worker suggests that turnover rates will increase in 2014 and beyond
Talent Acquisition Example:
56% of companies use an assessment tool as part of the hiring process - Aberdeen Group
There is a $2 Billion market for employment assessments - Bersin
Organizations Struggle to Find People with the “Right” Skills who Fit into Their Organizations
And Those That Are Hired Are NOT Always The Right Fit:
~ 50% of newly hired employees had some remorse about their decision according to DDI research:
Lack of realistic job preview was a major factor
~ 50% of HR/Hiring Managers were satisfied with the hiring process, with:
< 33% confident in conducting interviews
33% blamed the overreliance on subjective evaluations for low quality of hire
Science can add enormous precision to the hiring process – Not only with the science behind selection (so selection system design – do you use multiple hurdles, a culture-fit pre-screening questionnaire, a structured interview with specific questions), but also with the science behind selecting the people with the precise skills to be successful (AMC example) at both a manager and an employee level.
Talent Leadership and Engagement Example:
The rise of the independent worker suggests that turnover rates will increase in 2014 and beyond.
“No collar” workers are striking out on their own as human capital becomes the leading source of sustained economic value.
The “open talent economy” suggests there will be more fluidity from role to role or organization to organization, according to Bersin.
By 2020 as much as 50% of the workforce may be independent (Freelancer’s Union)
Thus retaining top talent or at least leaving a positive impression upon exit - will be even more critical to maintaining a competitive advantage.
Organizations are Increasing Their Spend on Analytics With Modeling Turnover Critical to Retaining Talent
According to Bersin:
60% of organizations are increasing their investment in talent analytics
“Your most likely home runs in this area will be…Turnover or Retention Analysis:
Developing or buying a model to predict retention… (since that will become such a huge issue this year)
Science can add tremendous insight into the retention process. Can science stop turnover – No – but close! We can predict exactly who is most likely to leave and what are the specific levers that managers can use to stop turnover before it starts. Through precision, we can help managers be proactive in retaining their top performers by learning from exiting employees and predicting who is likely to face similar issues within the workforce.
Talent Optimization Example 1:
Organizations Lack the Tools to Identify Talent Gaps and Forecast Future Talent Needs
CEOs Report Talent Gaps will directly impact Client Success:
66% anticipate losing business to competitors
64% fear a loss of revenue
53% anticipate delays in innovation
59% face lower customer satisfaction
87% say their employees feel more pressure/stress
- Accenture 2013 Skills and Employment Trends Survey
To address Talent Gaps at all levels Organizations have directly increased their L&D budgets by 11%. - Bersin by Dolomite
Corporate L&D Spending Topped $130 Billion
Yet many don’t know where this spend is focused (Bersin)
– In other words, organizations are throwing L&D funds at their talent gaps without actually knowing what gaps they have!
Science and experience (e.g., AMC, Dollar General) suggests this is the WRONG approach – It is NOT a one- size-fits-all solution.
Science can directly address talent gaps in a variety of ways – Without a thorough understanding of the specific skills/competencies on staff – organizations struggle to remain competitive, create new ideas, and anticipate future skill requirements. Science can help organizations understand and evaluate the skills/competencies that they have on staff today, allowing considerable efficiencies to be gained in the hiring and succession processes – but even more impactful, science can help guide the learning and development of existing staff through a precise focus on only those competencies that are critical.
66% of CEOs anticipate losing business to competitors due to talent gaps3
Corporate L&D spending increased 11% to $130 Billion to address these gaps2, yet many don’t know where the spend is focused
1: Aberdeen Group, 2 Bersin, 3 Accenture

4. Impact/ROI Skyrockets When you Pair Science, Process & Data
Predictive hiring
Workforce readiness
Predictive retention
Create a blueprint of your best talent and acquire more like them:
“I need to improve business performance by hiring more people who have talents like my top performers.”
Create a workforce readiness plan based on existing talent:
“I need to better understand what talent I have on staff to deal with today’s demands, and anticipate the talent I need for tomorrow.”
Create a retention plan across my workforce:
“I want to retain my best talent and reduce turnover costs. I want to know why my top talent might leave and what I can do to stop it.

5. A workforce readiness solution
Workforce readiness helps you identify the talents you have on staff to deal with today’s demands, and develop the talents you need for tomorrow.

6. Addressing Talent Gaps is the Top Workplace Challenge Most Concerning the C-Suite
CHROs find developing talent to be their largest workforce challenge
CEOs fear gaps in their current talent will directly impact customer success:
% of CHROs
66% anticipate losing business to competitors
64% fear a loss of revenue
53% anticipate delays in innovation
59% face lower customer satisfaction
87% say their employees feel more pressure/stress
Accenture 2013 Skills and Employment Trends Survey
“… companies realize they cannot solve their skills shortages externally. To achieve competitive advantage, they must commit to developing the right skills internally” Corporate Learning Fact book 2012
“Best-In-Class organizations are more than twice as likely to identify competency data for each employee.” Aberdeen Group
Source: IBM CHRO study: New Expectations for a New Era: CHRO insights from the Global C-Suite Study

7. Organizations Spend Millions With Little Guidance as to Who Needs Training or What to Train
To address talent gaps at all levels, organizations have directly increased their L&D budgets by 11% since 20131
A workforce readiness solution can help identify and address talent gaps – adding precision to guide the L&D spend
Corporate L&D spending topped $130 billion yet many don’t know where this spend is focused1
1 Bersin

8. Workforce Readiness: Questions to Ask
Does the workforce already possess those capabilities?
Do we need to hire those competencies from the outside?
What are the critical competencies (knowledge, skills and abilities) required to get there?
What are the organization’s strategic priorities?

9. Workforce Readiness Process
Identify and Address Talent Gaps by to Build a Global Supply Chain of Capabilities
Verify / Assess competencies:
Self-assessment of proficiency with manager verification / Testing of job-based skills through Assessments
Workforce Readiness: Enable action through employee and organizational views of talent
IDENTIFY REQUIREMENTS FOR TALENT SUCCESS: Enables mapping and validation of jobs to competencies
Utilizing IBM Kenexa Talent Frameworks and best practice consulting
Confirm competency proficiency utilizing multiple approaches
Workforce Readiness planning is enabled at individual and organizational levels
ANALYZE AND IDENTIFY TALENT GAPS:
Talent gap reporting, skills matches, reporting by competency
Gaps in proficiency, capability, and coverage are identified

10. Map and Validate Competencies Required For Each Job Role
Provides best-practice consulting to enable clients to identify linkages between organizational roles and key competencies utilizing IBM Kenexa Talent Frameworks
IDENTIFY REQUIREMENTS FOR TALENT SUCCESS: Enables mapping and validation of jobs to competencies
IBM Kenexa Talent Frameworks provide:
Ready-to-use job descriptions
Job specific competencies
Proficiency-based behavioral statements
Development goals
Coaching tips, and
Interview Questions aligned to the competencies
Multiple learning formats mapped to specific competencies
Industry leading content to support skills assessment, development planning, succession planning, better hiring, performance management, and learning management

11. IBM Kenexa Talent Frameworks
Industry Frameworks
General Competency Frameworks
Banking & Financial Services
OEM Software
Construction
Insurance
Consulting Services
Manufacturing
Customer Relationship Management
Media and Publishing
Education
Pharmaceutical
Energy I (Oil and Gas)
Real Estate
Healthcare
Retail
OEM Hardware Manufacturing
General Corporate Functions (HR, Finance, Legal, Sales)
Information Technology (IT) Operations
SFIA (Skills Framework for the Information Age)
Job Families (145+)
Competencies (2,000+)
Application Accelerators
Functional area with in each industry or expertise
6 Job Bands for employees, management and executive matrices
Business – 36
Individual – 28
Management – 22
Leadership – 20
Functional/Technical –
Learning References (OJT, Web, References, professional bodies, etc.)
SMART Development Goals
Coaching Tips
Performance Feedback Writing Assistants
Interview Questions
Designed to engage and optimize use In context. Extends the application of the competency model to support models such as the 70/20/10.
4 Levels of Proficiency with 21 unique behavioral descriptors for action oriented skill observation, evaluation and communication.
Each competency has a suggested level of proficiency used for each role.
Jobs Profiles (2,500+)
Job descriptions
Job profiles
Job responsibilities
Job focus
Compensation Market Data

12. Verify Core Competencies, Assess Critical Ones
Confirm proficiency across critical job-relevant competencies utilizing multiple approaches
Verify / Assess competencies:
Self-assessment of proficiency with manager verification / Testing of job-based skills through Assessments
Employee self-verification of proficiency levels across core competencies with manager verification
Confirm required skills with access to IBM Kenexa’s library of over 1,500 skills tests relevant to a wide array of jobs.

13. Analyze Competency Results to Identify and Illustrate Gaps
Gaps in proficiency, capability, and coverage are identified
Subject Matter Identification:
Identify peak proficiency across the organization
Employee Competency Gap Analysis:
Identify which employees require the greatest development and which competencies should they target
ANALYZE AND IDENTIFY TALENT GAPS:
Talent gap reporting, skills matches, reporting by competency
Organizational Competency Gap Analysis:
Identify competency gaps by function / team which would prevent meeting business objectives

14. Enable Action to Address Talent Gaps at Individual and Organizational Levels
Workforce readiness planning is enabled at individual and organizational levels
Employees can act on results to plan competency-based learning activities and schedule according to priority
Workforce Readiness: Enable action through employee and organizational views of talent
Identify and define functional or cross group career pathways
Job and career planning enables efficient identification of target jobs, core skills needed, and proficiency required for any job

15. Workforce Readiness: Proven Impact on Client’s Success:
IBM helped the organization rapidly map and validate the behavioral and technical competencies required for each job role, highlighting proficiency levels required for successful performance
Step 1: Identify Requirements for Success
KEY OUTCOMES:
Substantial cost savings in training delivery
Increased productivity for critical roles - as they are spending 1/2 or 1/3 the time in training
Reduced frustration with mandatory training resulting in lower turnover
IBM developed / administered Assessments of each Behavioral and Technical competency for each role
Results were automatically linked to the LMS highlighting competencies scoring below proficiency.
Step 2: Assess and Identify Talent Gaps
Case Study: Using Assessment to help Determine Learning
Goal:
Save money by making the training program more efficient
Had high level, highly paid, individual contributors in their private bank (e.g. wealth planners, wealth management advisors, trust officers) spending a lot of time each year in corporate mandatory training which was very expensive in terms of their time "off the floor" as well as in developing and facilitating training.
Action:
Kenexa developed a competency model for each job highlighting the behavioral and technical competencies required and at what level of proficiency including details of the behaviors required under each competency.
Then we developed an assessment of each behavioral competency internally and partnered to develop a custom assessment of each technical competency for each job.
Kenexa loaded both assessments into our assessment platform and integrated with the learning management system so that each employee's record would show which competencies he/she scored lowest or below a cut score.
Planned Result (Not fully implemented):
Each employee would be required to complete corporate mandatory training only in the competencies populated in the LMS as lowest or below cut score
In the long run this saves a ton of money in terms of
a) cost savings in training delivery,
b) more productive time for highly paid ICs as they are spending 1/2 or 1/3 the time in training,
c) they hoped it would lower turnover as employees were very frustrated they were required to do so much training and yet their goals didn't change.
Also - all of these savings were paired with maintaining the high level of competence among their employees on critical competencies (as they were targeting training instead of just cutting it out).
Employees completed mandatory training ONLY on the competencies identified below proficiency
Talent gap analyses, skills match to other jobs were provided to help individuals and forecast talent gaps
Step 3: Act
Financial Services Case Study

16. Delivered on IBM Kenexa Skills Manager
Utilizing Skills Assessments (Prove-It), Talent Frameworks, Consulting

17. Workforce Readiness: Examples of Potential Impact
Career Impact: Turnover
80,000 employees - limited career opportunities for 10,000 EEs in key role – results in high turnover: 30%
3,000 employees replaced on an annual an average cost to $50K yields:
$150M in turnover costs
READINESS: KEY ROLE
By highlighting career pathways/competencies required for succession we can reduce turnover by 1 point to 29% means replacing 100 fewer EEs
Savings of over $5M in annual cost
Innovation: Hiring Costs
25,000 employees across 15 countries
Major focus on creating a new product line that is highly innovative
Current resources are unknown – need 10 new headcount
READINESS: INNOVATION
By highlighting current strengths/qualifications within the organization; identified 8 internal resources that have the right technical skills
Saved external hiring costs of $600K for 8 $75K per employee
Training: Sales
200 sales people in key position
Mandatory training required annually over 2 8 hours per day
Average sales of $10,000 per day ($2.4M per year)
READINESS: SALES
By assessing current proficiency on required skills and only training on specific skills saves 1 day of training each sales person
If 200 sales people are back on the floor selling during that day yields $2M in increased sales on an annual basis
Figures shown based on actual IBM linkage studies done with previous customers.
Multi-national heavy equipment provider:
Major Media company: one new project was staffed by a person with the right technical skills and saved a direct capital expenditure of over $400,000

18. Additional Smarter Workforce Products/Services to Add Value:
IBM Kenexa Talent Acquisition Suite/predictive hiring solution: Utilize talent gaps to facilitate improved precision in hiring.
IBM Kenexa LMS: provide training based on competencies identified/assessed
IBM Kenexa Talent Optimization Suite
IBM Kenexa RPO Services based on identified need

19. APPENDIX

20. What do we mean by “Science”?
Perception:
Science = Add an “Assessment”
Science = Conduct a survey
Science = Call a Consultant
We are using Science to help:
Improve the effectiveness of talent acquisition programs
Increase employee skill utilization and career development,
Decrease training and development spend and hiring costs,
Improve workforce planning effectiveness,
Improve performance and productivity,
Retain high-performing employees
HCM Definition:
Applying psychological principles and rigor to contribute to an organization's success by improving the performance of its employees.
HR professionals have at their fingertips large volumes of employee data - including demographic data, social chatter, skills profiles and behavioral information - to identify the qualities that make top performers successful.
Augmenting the power of human judgment: Decisions that have been made based on human instinct will be made on the basis of massive datasets consisting of hundreds of variables, including those that no person would ever think of including, and multivariate statistical models that can analyze these numbers in real time.
Companies need to apply the same rigor to their workforce as they do in knowing and anticipating the needs of their customers. They can no longer afford to manage key talent by gut instinct; rather, they need to augment their wisdom with data and scientific analytics to drive decision making.
Capitalizing on the rise of big data within HR, we can reinvent HR by enhancing the power of human judgment through the use of science and analytics.