IBM’s co-investment in training cuts salaries by 10%

Just saw that IBM is cutting salaries 10% for employees in the Global Technology Services strategic outsourcing group who have been identified as not keeping their skills current. For the next six months, identified employees will spend a day a week getting current on their skills. IBM is calling this program a “co-investment” in training. (See the full article at Computerworld.)

So, it’s pitched as a way to help employees who are falling behind. Employees spend 20% of their week in training and their salary is reduced by 10% (assuming they are working five day weeks for eight hours a day). Critics and cynics suggest it’s a way to weed out certain employees without having to pay severance. Or maybe it’s just a new way to reduce the salary budget for six months?

So many questions:

  • Was this a long time coming or just dropped on employees one day? How was well was it communicated?
  • How did IBM determine who was lacking current skills and which skills were lacking? Are those skills needing to be brought current actually required in the daily work of those who haven’t kept up?
  • Have training budgets or programs been cut in the past five years? Did everyone have equal opportunity for development?
  • What have those who are deemed current done differently than those who aren’t? How did they stay current? Was it through seeking training on their own time or was it on-the-job training from working on new projects?
  • Were those skills and the level of mastery needed made explicit before / after the pay cut?
  • Who is providing the training? How is it being paid for?
  • Why is the program six months long for everyone? Is everyone lacking the exact same amount of skills?
  • Has the workload of participating employees also been reduced to allow for the day of training?
  • How will the skills and mastery be assessed before reinstating pay?
  • What happens if a person doesn’t reach those levels? Are they fired, do they continue training, etc.?
  • Has IBM just handed everyone an excuse for not working more than 40 hour weeks: “I’d love to stay and work longer, but I need to keep current.”
  • What will be the impact on the morale of all employees?
  • Is this – as some commented – an subterfuge to “encourage” certain employees to quit or a clever way to help trailing employees get back up to speed?
  • What will be the next company to do this?

What thinks you?

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2 comments

  1. This is a classic move by IBM to reduce workforce without actually having to do a layoff…or a “Resource Action” as they call it. IBM’s 2015 roadmap has turned the company into a business solely focused on financial statements, with zero regard for employees, revenue growth, or strategic acquisitions that will improve their portfolio. They are floundering badly. Leadership is weak, morale is in the toilet, and instead of focusing on executing against a well-aligned go-to-market strategy (they don’t have that either), they are focusing on cutting costs. Very sad place indeed.

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    1. Appreciate your thoughts. They are similar to the thoughts of the person who sent me the ComputerWorld article. He’s a retired programmer, never worked for IBM, but very familiar with the challenges in the industry.

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