By: Marc Holliday | Oracle NetSuite Global Business Unit, Sr. Product Marketing Manager
There was a time when workforce management was just a tool to map staffing levels to call center volume and create schedules that best aligned with those conditions. But workforce management has since grown across industries—from manufacturing to retail to health care—that need to track time, optimize staffing and scheduling, and predict future scheduling and staffing needs. It has also empowered employee autonomy and flexibility. It can also help businesses ensure compliance with changing and complex regulations, better manage contingent workforces and more deeply engage employees.
Above all, workforce management can generate tremendous cost savings. Personnel costs often top 50% of operating budgets, but data shows that most business leaders spend 10% or less of their time improving workforce management practices. This represents a major opportunity for many companies, and technology can help.
Workforce automation solutions can result in major improvements, including a 60-80% reduction in payroll errors and the time spent fixing them, as much as an 85% reduction in time required to manage and control overtime and even a 3-5% boost in profitability, according to a research study on cloud-based workforce management.
Businesses across different industries that need strong scheduling, time and attendance capabilities and the functionality to ease compliance with complex and changing federal and state labor regulations should:
1. Build a workforce management team. While workforce manager roles and small teams got their start in call centers, these teams are now common in many industries that rely on volume for scheduling shifts, like health care and retail. A workforce manager is responsible for forecasting staff needs, scheduling and monitoring the performance of employees. This person analyzes data to look for problems, opportunities for efficiency gains and other trends, and reports it to senior management. Businesses without a workforce planning team may find themselves overstaffed, or worse, understaffed at their busiest times.
2. Hire a workforce analyst. In larger companies with more complex operations, there are also workforce analysts who focus on interpreting the data and help project scheduling needs. Analysts and managers communicate with those in the training organization to make sure their employees have the requisite technical and functional knowledge, and also help to build the softer skills needed for maintaining solid customer relationships.
3. Focus on education and training for managers and employees. Training should be customized to employees’ work. Taking workers away for days or weekslong training doesn’t always work in scheduling-intensive businesses like retail, manufacturing and health care. Create training content that’s ideal in the context of these roles, such as splitting training into shorter, 10-minute blocks. Measure the value of that training by connecting it to sales or service levels in specific products or initiatives, comparing results by quarter and revenue improvements.
4. Collect quality data. Traditional workforce management relies on historical data to predict future patterns. The more data the system has to work with, the more accurate those predictions will be. By integrating workforce management software with data from other business systems, like ERP, businesses can better understand demand and meet employee and customer expectations. By pulling time log data together with information from, for instance, point-of-sale (POS) systems that show actual sales volumes, the business can optimize schedules to optimize staffing and reduce operating costs.
5. Forecast workloads. Forecasting models use historical data to project future workloads. For retail, this would account for things like seasonality, and allow for scenario planning given different variables like Black Friday or big sales that boost retail traffic. Forecasts could also factor in broader variables like economic conditions or industry sales trends. This is another area where access to data outside of scheduling tools is vital.
6. Set targets, measure and report. With better access to data, the business can track the metrics that measure productivity, labor utilization and ensure compliance. Automated, self-service time reporting systems and automated time capture reduces data errors, and tracking and monitoring of absences against planned schedules allows managers to forecast productivity lapses. That enables the business to better manage employee absences.
Such a system can also reduce payroll errors, as well as save the company time and money by helping manage overtime and reducing overstaffing. What’s more, effective workforce management saves cumbersome, often manual work to ensure accuracy in adhering to regulations such as the Family Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA) and the Affordable Care Act (ACA) because it automates the calculation of absence accruals, eligibility and pay based on rules.
7. Enable employee self-service. Leading workforce management software does more than automate basic processes like time clocks and leave management. Advanced workforce management software can display detailed analytics and can leverage artificial intelligence (AI) to forecast and suggest staffing levels, allowing managers to see and manipulate data themselves. For employees, mobile-friendly software gives them the ability and autonomy to see, accept and swap shifts from their mobile device.
8. Integrate HCM with WFM software. One important but often overlooked function of workforce management software is its value in helping organizations adhere to everchanging complex labor laws. With integrated workforce management software and payroll, for instance, the business ensures workers are paid accurately and that the business is abiding by relevant labor laws to avoid monetary penalties and potentially lawsuits. On the flip side, the business has a way to accurately track time and attendance to assess the performance of workers, whether it shows exceptional work or points to potential performance issues.
Integrating the WFM system with employee files in the HRMS software also ensures employee information is always up to date and the relevant workforce management data and metrics is tied to each member of your staff.
Organizations can also use compliance metrics to ensure a wide range of current health and safety regulations are met.
Recent research showed that the COVID-19 pandemic is affecting HR projects right now, with more than half of those surveyed indicating that they are changing scope or putting projects on hold as cutting costs remains a priority (59% said they’re expecting to cut costs).
Adding workforce management software is an important part of a human resources management software (HRMS) human capital management (HCM) software strategy that actually leads to savings, because it lowers labor costs, decreases payroll errors and compliance violations, and even has the ability to increase sales and make workers more productive. This leads to happier employees and better customer service. Many businesses that implement workforce management software report that cost savings are the most common and biggest benefit.
According to a report, there is a 30% gap between the importance of talent challenges and how prepared HR is to overcome these challenges. Focusing on workforce management processes is an important part of retaining top talent, identifying performance issues before they become major problems and maintaining compliance with labor regulations, the violation of which can be extremely costly to the business, company culture and employee morale.
As more people work remotely, having the right tools to enable employees to be as productive as possible will be a hallmark of best-in-class companies. Integrated HRMS and workforce management processes ensure that the business is using accurate, current data for scheduling purposes, while accounting for leave and time off policies. It can actually turn scheduling into a competitive advantage, reducing costs and maximizing sales.