News alert: IBM meets revised hiring goal with state

IBM Baton Rouge
The IBM building in downtown Baton Rouge.

With the equivalent of 811 full-time Baton Rouge workers tallied on June 30, IBM has met the terms of its revised, contractually obligated hiring quota with the state.

The news comes two years after IBM failed to create the 800 jobs it promised under a 2013 economic development deal with Louisiana, then prompting Gov. John Bel Edwards’ administration to revise its agreement with the tech giant. It’s viewed as a boon to the local economy by Mayor Sharon Weston Broome, the Baton Rouge Area Chamber and others, who all celebrated the announcement in separate prepared statements.

“We changed the way we did recruiting, especially with colleges and universities,” says Charles Masters, IBM vice president for North America client innovation centers. “But it’s also been about putting in more pathways and cultivating them.”

Last year, IBM narrowly met its updated quota, hiring 575 full-time employees for the Baton Rouge center. Within the past year, the company has been on track to hire 225 full-time workers against a June 30 deadline. Had IBM defaulted on the revised agreement, it would have had to pay the state $10,000 for every job it fell short.

In the past year, the biggest hiring spike appears to have taken place between the fourth quarter of 2018 and the first quarter of 2019, when more than 100 workers were employed, according to data provided to Daily Report by IBM. Fueling much of that activity, says Masters, was a large undertaking by IBM to move its legacy IT materials into the cloud.

He says an increased focus on recruiting events in the past year helped the firm satisfy its goal. IBM also teamed up with LED FastStart last year to improve marketing.

More recently, there’s been a rise in the number of “new-collar” workers, or employees who came to IBM through different pathways, such as two-year community colleges or the company’s apprenticeship program. These workers now comprise a roughly 10-20% slice of IBM’s local employ, Masters says.

Still, more than 600 of the 811 workers—who have been counted toward the company’s jobs goal since the third quarter of 2014—are graduates of Louisiana universities, including 180 in the past year. However, specific data related to the number of graduates from each college—including LSU, Southern and BRCC in Baton Rouge—was unavailable before this afternoon’s deadline.

Also included in the count are the 30 apprentices IBM hired shortly before its June 30 deadline. The local apprentices—among 50 statewide—work for IBM full-time while also undergoing a 12- to 18-month training program, receiving salaries on par with those of other full-time workers that vary by job. Meanwhile, about half of the IBM employees are from Louisiana.

Excluded from the figure, however, are H-1B visa workers and interns.

Since 2013, IBM’s total employee payroll for the Baton Rouge client innovation center has been over $124 million, a 5:1 ratio compared to the $23.7 million in incentives the company has gotten to date, according to data provided. The original, Jindal-era deal set the full-time worker salary benchmark at $46,000 a year; the state calculates the number of jobs by dividing the annual payroll by that number.

“These professional employees are working on the most challenging tasks of tomorrow with numerous clients, solving challenges in cybersecurity, health care, law enforcement and many other critically important fields,” the governor’s office says in a prepared statement released early this evening. “We look forward to a long and fruitful relationship with IBM in Baton Rouge and throughout Louisiana.”

IBM is still hiring, says Masters, who expects to bring on between 30 and 50 new employees each quarter.  He declined to say how many employees the center has today, deferring to Louisiana Economic Development, which did not respond to multiple requests for comment before deadline.

Editor’s Note: This story has been updated to include comments from Gov. John Bel Edwards’ office.