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Within the last decade, organizations have witnessed significant demographic changes, spiraling labor costs, growth of emerging markets and an expansion of the global economy. In the face of these changes, more businesses are viewing their workforce as a major competitive differentiator. Hiring and managing highly skilled employees in the most cost-efficient way is a key strategy for gaining a sustained competitive edge. As companies seek to optimize their human capital, there is a growing need for tools to help forecast workforce demand, address skill gaps, project workforce evolution and engage in long-term planning.

IBM Research is working with the Human Capital Management practice in IBM Global Business Services (GBS) to create a set of tools and models that can be used to help clients optimize their workforce by reducing labor costs, retaining critical skills, deploying personnel efficiently, and supporting strategic talent planning decisions.

Workforce demand forecasting and capacity planning

To assist companies in improving their workforce management capabilities, IBM has developed the IBM Workforce Evolution and Optimization (WEO) methodology to help study workforce trends, forecast human resource dynamics, assist staffing decisions and link them to longer-term business objectives. WEO’s capabilities include analyzing historical workforce trends and dynamics, such as hires, releases, promotions and transfers, and predictive modeling of future workforce dynamics based on past activities and sophisticated probability calculations. Using WEO, GBS experts can help organizations model the future based on “what if” adjustments and provide guidance in making strategic decisions relative to business goals. WEO extends the predictive and optimization capability of the IBM/Cognos® Workforce Performance solution with analytics that can be easily tailored to client-specific needs and issues.

Improving productivity through better planning

IBM Growth and Performance (GAP) uses analytics to understand and improve sales productivity and revenue performance by modeling the relationship between sales capacity and revenue. Organizations can use GAP to analyze their historical resource productivity and use its modeling capability to help determine the optimal size of their sales force and devise the best deployment strategy across regions or brands. In addition, GAP can help organizations determine accurate financial targets and get a true picture of intrinsic sales force productivity in a region or brand. Clients can work with GBS experts to run scenarios to assess ways to achieve desired targets, such as expense reallocations or productivity improvements.

Matching people to jobs

To assist with the execution phase of the workforce management cycle, IBM Research has developed IBM Optimatch—a decision support tool designed to match the requirements of open job positions to potential candidates with the appropriate experience and skills sets. Optimatch is based on the powerful Constraint Propagation technology—a declarative language that allows for complex constraints, prioritization and natural definition of preferences. The tool handles real inputs with thousands of jobs and employees, provides globally optimized assignments and can match based on unstructured data in resumés and job descriptions. In one internal deployment, using Optimatch resulted in an estimated cost savings between $5 million and $25 million for an IBM business unit through replacement of contract labor with employees on the bench. In addition, the ability to staff engagements more effectively has helped increase the number of engagements served, resulting in additional revenues.

Optimizing work schedules

In many organizations there is a need to perform capacity planning with respect to daily operations. The IBM SWOPS (Shift Work Optimized Planning and Scheduling) system offers a platform for optimizing work schedules. The system's inherent flexibility allows it to be adapted to individual businesses' requirements, predict workloads for different activities and tasks, and match resource and skill requirements while complying with labor regulations and other constraints. It supports capacity planning and team sizing and provides important input to strategic planning tools with regard to required workforce composition and skills. The SWOPS system provides scheduling reports for supervisors, team leaders and employees, and can help boost employee morale by incorporating worker preferences and shift rotation.

Clients report a significant reduction in payroll costs after using the system to fine-tune their shift management. In the case of one foreign telecommunications provider, using SWOPS enabled the company to reduce its schedule creation time from approximately three days to just two to three hours, resulting in substantial savings in labor costs and increased staff morale. In another engagement, a foreign airline used SWOPS to increase crew utilization by 4 to 7 percent and to reduce solution time to a few hours, resulting in significant gains in scheduling efficiency.

Workforce strategic planning

A maturing workforce, combined with the complexity of globalization and changing business conditions, is fueling the need for an integrated workforce planning platform to handle demand forecasting, capacity planning, workforce surplus or deficit analysis and strategic planning. IBM OnTheMark (OTM) is an integrated workforce planning tool for demand forecasting, capacity planning, gap/glut analysis and strategic planning in services and project-based organizations. OTM consists of robust service oriented architecture that integrates advanced analytics with workforce and business data. The tool has been used internally in several IBM units with significant cost savings, and has helped reduce the time required for single iteration demand forecasting from days or weeks to a few minutes, allowing for a speedy response to unexpected changes in demand.

Meeting competitive challenges with advanced workforce analytics

Developing a highly skilled workforce is one business strategy that competitors have difficulty replicating, and those companies that focus on addressing skill gaps, forecasting staffing demands and fine-tuning hiring practices can gain a significant and sustainable advantage in the global market. Through a set of modeling and forecasting tools and workforce solutions, GBS's Human Capital Management practice is helping organizations hire and maintain their most important and differentiating asset – their people.

For more information on engaging IBM technical expertise, contact IBM Research Services today