IBM's head of HR says '100% of jobs are going to change' with AI. Here's how the tech giant is adapting.

Diane Gherson Top 100

IBM's chief human resources officer, Diane Gherson, is one of Business Insider's 100 People Transforming Business.
Gherson has been instrumental in transitioning IBM to a "skills-based company."
Automated software assesses employees' skills and pairs them with appropriate roles within the company, which has also prevented layoffs in certain cases.
This article is part of our ongoing series on Better Capitalism.
See the full list of the 100 people transforming business here.
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We're in the early stages of what the World Economic Forum has dubbed "the Fourth Industrial Revolution," where advances in technology such as artificial intelligence will replace or change millions of jobs. It can be easy to take a pessimistic view.

But as Diane Gherson, IBM's head of HR, has shown at the tech stalwart, this shift is also providing an opportunity to reinvent work in a way that can be more efficient and beneficial to workers than before.

For her work in taking IBM to a "skills-based" company and in the process providing a model for other companies to do the same, we've chosen her as one of the 100 People Transforming Business.

Redefining roles

Gherson took over as HR chief in 2013, but in her 17 years at the company, she's seen plenty of change. In 2014-15, IBM was facing "massive disruption," Gherson said, from a shift to the cloud (where software is distributed online instead of through hardware), new AI and blockchain tech, and accompanying new business models. This meant that many of its more than 350,000 employees worldwide would need to adapt or be replaced.

"There's a limit to how much you can just sort of change out your workforce, right?" Gherson said. "Particularly in a lot of countries where that's quite painful."

To make it through these market changes, IBM had to assess what skills its workforce had and what skills it now needed. That's not an easy feat when you're a giant multinational business. Gherson said that the company turned to the technology that was partially responsible for this disruption: AI.

Instead of having managers work with each of their employees to map out their skills and then work with other managers to see what skills were still needed, IBM automated the process. Internal software could analyze employees' work experience and writings to infer what they excelled at. It prompted a cultural shift within the company.

"It was starting to become a thing where we were saying, 'Expertise really matters. And what you're known for is going to enable you to have valuable roles in the future,'" Gherson told us.

It was a "huge leap," Gherson said. Before that, she said, HR was all about headcount: There were roles and they had to be filled by qualified people, as determined by résumés. Now her job became about skills: There were tasks requiring certain skills, and they had to be given to qualified people, as determined by skill assessments.

Early in this transition, IBM was planning on exiting a business, leaving it with a team of people who were about to be left without a job. Rather than lay them all off, Gherson said, HR ran its skills-assessment software and compared the analyses with job openings throughout the company, allowing for a minimum of an 80% match to consider a person qualified. About 80% of that defunct team was moved to a new job within IBM.

"It was the first time we realized, 'Wow, we don't have to let all these people go and go out and hire people for these openings even though they don't have the background that you would normally look for in the external market. They have the skills to be successful in these jobs,'" Gherson said.

IBM made that automated skills-assessment tool available to external recruits and developed Blue Match for its employees, which lets them know if they're qualified for another job within the company, regardless of the security of their current role. HR also introduced a complementary career-coach phone app that analyzes IBM's job and skills data to answer questions like, "If I moved to this part of the company, what's the chance I would get promoted within two years?"

Constant learning

IBM was becoming more fully a skills-based company, but that did not mean that skill sets could remain static. The reason why the transformation was necessary in the first place, of course, was because the wider market was moving faster than ever, leaving the state of jobs in constant flux.

In response, Gherson oversaw the development of the IBM Skills Gateway, which is a learning resource that allows users to select a skill, enroll in courses for it, and end up with a badge. These badges have accompanying explanations for what specifically the student learned, and they can be used outside of IBM. Last year, IBM surpassed 1 million badges awarded.

The acquisition of skills is "now deeply embedded in our management system, so pay is based on the skills that you've acquired," Gherson said. "We sit down with our people and say, 'Let's talk about what skills you're going to be developing in the next quarter.' So it's part of an ongoing conversation."

IBM's leadership have been evangelists for transitioning to a skills-based economy, and Gherson believes more companies will have to take similar approaches if they want to succeed in the near future.

As she told us, "100% of jobs are going to change with artificial intelligence. We know that, right? But that doesn't have to be terrifying."

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