If you’re in a position of leadership, you’ve likely heard the term “workforce management” being thrown around. Chances are, you have a vague idea of what it means, but fully understanding it can definitely improve your skills as a leader.
What is Workforce Managemet?
In essence, workforce management is a set of strategies, tools, and processes working together to ensure maximum productivity & efficiency. The basic idea of workforce management (WFM) is having the right people in the right place, at the right time. It is far-reaching, encompassing everything at the company level as well as at the individual employee level.
Objectives of Workforce Management
Just how every organization will have different business objectives, the same applies to workforce management. Objectives will be different depending on the type of workforce you are managing. However, there are some general objectives that all workforce management should accomplish.
Balance the Workload & the Workforce
The first major goal of workforce management is to ensure consistent balance between the workload, and the time spent working. No, this doesn’t mean hoping for a consistent amount of business. Instead, it means managing the workforce to be successful regardless of the amount of business. Basically, you want to avoid bottlenecks when demand increases or lay-offs if demand drops. There will always be special case scenarios, but generally, consistent workforce availability is essential.
Reduce Costs, Increase Productivity
There are endless ways to cut costs, in fact, sometimes that’s the easy part, right? However, effective workforce management aims to cut costs while also increasing productivity. As you can imagine, there is no one-size-fits-all to achieve this. It means filling positions with those most qualified people. It also means driving employee satisfaction to reach optimum productivity on an individual level. Don’t forget though, asking too much of your employees can have a negative impact, so it’s also about achieving balance. Minimize overtime, as well as downtime. Don’t encourage either overworking or underworking. Can you see how complex workforce management is yet?
Flexibility in the Workforce
Just when you thought you had workforce management figured out, let’s throw in some flexibility for good measure. Achieving the above objectives in a steady environment is one thing, but we all know how unrealistic that is. Situations arise, employees go on vacation, global pandemics occur, you get it. A well-managed workforce is flexible and reactive. This involves the effective transfer of knowledge, having the right processes in place to handle absences, and never relying on one cog in the system.
What is included in Workforce Management?
Although this might also differ for each organization, there are specific business areas that are important for workforce management.
Forecasting & Budgeting
Let’s go back to the basic premise of workforce management; having the right people, in the right place at the right time. To do that, you need to know how many people (and other resources) your business needs at any given time. If that wasn’t hard enough, you also need to know how much you can afford to budget to achieve that. Generally, all of these things depend on demand. Being able to forecast demand allows you also to set budgets, organize resources, and be prepared regardless of the situation. While some industries such as hospitality and retail have predictable busy seasons such as Christmas and holidays, it can be much harder for other, less predictable industries to accurately predict demand.
Although there is no “one-size-fits-all” approach to forecasting/budgeting, the key is to review historical data from your business, looking for patterns and key periods that might need increased/reduced workforce resources. You can also follow and assess market or industry trends that might help you make better business decisions. Of course, there is software and resources out there that make forecasting and budgeting easier. If those work for you and your business, you should certainly make use of them.
At a glance, employee scheduling is considered the “easiest” part of workforce management. In reality, though, a poor-quality employee schedule will not always achieve efficiency. First of all, manual employee scheduling is time-consuming. This prevents your schedulers/managers from contributing their expertise elsewhere. There are also so many other reasons that manual scheduling is not the ideal solution to achieve optimum workforce management. Manual schedulers often use overtime to fill gaps, which might not be necessary. It is also very easy to double book an employee or understaff a shift when manually scheduling. All of these scheduling inefficiencies, on top of the time spent scheduling are reasons to opt for an automated employee scheduling system.
With an automated employee scheduling system, workforce management is easier than ever. Managers can keep track of all employees, their qualifications/certifications, and any other pertinent data related to them. Schedules can be created in a fraction of the time compared to manual scheduling, freeing up resources to be used elsewhere in the organization. Depending on the system, it might also be possible to totally eliminate unnecessary overtime, automate the entire scheduling process and even handle sick calls and no-shows in a matter of minutes. Scheduling is a complex business function that handles more than just filling shifts. With the right tools, managers can create optimized schedules that make the most of available company resources.
Time & Attendance Tracking
As you can imagine, in order to know that your employees are in the right place at the right time, you need to focus on creating a process for time and attendance tracking. Of course, this is mostly relevant to shift workers, rather than salaried workers who work the same hours each week. While most businesses do have some form of time and attendance tracking, there is always room for improvement. It also helps to automate as much of this process as possible. To fully understand the importance of an effective time and attendance process, we must consider everything that it entails.
First, there is the actual method of time collection. Are your employees simply signing in? Do they have to check-in/out at a time clock? Both of these methods are very basic, and unfortunately very vulnerable. Buddy punching and other forms of time theft can cost your business up to 7% of your total payroll. That can add up pretty fast if left unchecked. With an automated time and attendance system or even simply a biometric time clock, you can completely eliminate the risk of time fraud. Advanced time collection software can even create GPS geofences that will only allow employees to check-in/out of a shift if they are in the right location, further preventing time theft.
Once you’ve figured out how to tackle time collection, it is important to review how you manage and handle that data. Ideally, you will have a system that integrates with your payroll software to limit the chance of human error in payroll processing. The same can be said for billing. The less time and effort that goes into your attendance tracking, the better. If you can reduce both time spent, and the number of errors in your time and attendance process, you are more likely to achieve optimum workforce management.
For most, employee engagement is the final piece of the puzzle. If you have all of the above aspects under control, the only other thing you have to worry about is how your employees perform. Having them in the right place, at the right time is one thing. Ensuring that they are performing to the best of their ability is another. It’s not always easy to measure and gauge employee engagement, so most employers focus on increasing their productivity instead. The reality is that if an employee is not engaged in their role, they will not be giving you 100%. It might surprise you to know that only 15% of the worldwide workforce are engaged at work.
This might not worry you, but it should. Studies have shown that workplaces with engaged employees outperformed those with unengaged employees in almost every field; 10% on customer ratings, 17% in productivity, 20% in sales, and 21% in profitability. If your workforce is made up of disengaged employees, you are at a huge competitive disadvantage. However, it is no easy feat to get all of your employees engaged overnight. There are lots of factors that contribute to an engaged workforce, such as work-life balance, constructive feedback from management, feeling valued as an employee, and much more. Not only that, but what engages one employee might not engage another, so learning how to handle this at the individual employee level can be very complex. Find out more about employee engagement here.
The Big Picture
Okay, so now you know that there are four major areas to tackle when it comes to workforce management. Handling one of them at a time is easier, but certainly not the most efficient. On the other hand, trying to tackle them all together can be very overwhelming. Well, as with most things in business, the technology exists to help us get a hold of workforce management. Workforce management software gives you the tools, resources, and capability to totally optimize your workforce. Of course, there are endless options and providers of workforce software (like Celayix), so it’s important to find one that works for you. The beauty of workforce management software is how it collectively works on the 4 areas of workforce management, often without you even realizing it.
It can help with budgeting and forecasting by recognizing patterns and following business rules. Typically, it provides new scheduling functionality such as automated scheduling, self-scheduling and maybe even AI schedule optimization. It might allow you to capture and track time and attendance data through GPS check-ins, and integrate directly with your payroll provider. All of these features actually help with employee engagement too – self-scheduling can help achieve work-life balance by giving employees freedom and flexibility over their schedule. Accurate payroll is also vital – 24% of employees will look for new work after the very first payroll error, and only 44% of those employees would reconsider looking for work after an error is fixed. Workforce management software won’t work overnight, and even though it can lighten the load, it is still a continuous, complex process.
Do you Need Workforce Management Software?
While it is possible to achieve all of this without software, let’s remember one of the main goals of workforce management; reduce costs, improve productivity. Forking out for software to help achieve this goal seems counterintuitive, right? It’s completely understandable that companies are hesitant to pay for software that they view as non-essential. Well, there are many ways to calculate a return on investment, and it’s very important to do this! So take a second to think about the following questions;
- How much are you currently spending on overtime?
- How long do you currently spend creating schedules?
- Do you know the rate of turnover in your workforce?
- How much time/money do you lose due to sick-calls, no shows and absences?
- Any idea how much you lose to payroll fraud every year?
- Finally, how much do payroll and other administrative errors cost you every year?
Chances are, you aren’t sure of any of these answers. Well, we can help with that! Take a look at our amazing cost-benefit analyzer that can help you see how much money you can save with our software. Money is just one saving you can make with workforce management software, time is the other. Time is often forgotten as a cost to the business, but consider the advantages of freeing up the time of management and supervisors who usually create schedules. Their expertise and experience are wasted on these tasks when they could be providing value elsewhere!
Still not sure?
Celayix has been helping organizations improve their workforce management for over 20 years. In that time, we have helped companies save over $100,000, completely eliminate overtime and grow their business significantly. We provide shift scheduling, time and attendance software to companies looking to improve internal processes. We have been developing features to help with planning, forecasting, budgeting, and productivity, in any industry. Our solution advisors would be happy to go through all of the areas Celayix can help you in to nail down your workforce management.