Workforce Management (WFM) is the practical core of human capital management (HCM). In other words, WFM is about getting the right people with the right skills in the right place at the right time. All of this needs to be done done in away that optimizes the productivity of both individual workers and the company's workforce as a whole while managing labor costs.
For human resources departments, using WFM techniques and tools is now essential to executing traditional HR responsibilities like recruiting the right talent and skill sets, minimizing employee turnover, and ensuring compliance with the complicated web of scheduling laws and requirements. Using WFM technology is also the best means to reduce the risk of labor law and obligations noncompliance in the increasingly complex workforce filled with a mix of employees, independent contractors, and contingent workers.
We'll dive into a number of WFM issues and techniques for HR below. However, the most effective WFM programs are those that the entrie company embraces. So you'll also find information to help you make the cast to other departments for improving the WFM tools and process used across the company.
This question may seem odd given that we've already discussed the need for WFM. The question here is really "What scale of WFM tools and processes does your company need?"
Due entirely to technological advances, there is a suite of WFM tools and processes available today on an unprecedented scale. The size of the workforce may affect what technology and WFM automation a company requires to execute WFM successfully.
The type of WFM tools and processes that a particular company requires, depends on the particular business challenges the company is facing. Consider these questions:
1.How well does your company understand what's driving its labor costs?
If there's no understanding of how and why labor costs fluctuate and impact profitability, your company isn't in control. WFM tools that can correlate scheduling to identify lopsided worker-to-manager ratios, empower HR to proactively handle labor costs without sacrificing productivity or quality.
2. Are high labor costs impacting cash flow?
Overpaying for labor through over-scheduling and uncontrolled overtime is a common problem. Scheduling tools, automated time and attendance data collection, and real-time notifications are all WFM tools that help managers forecast scheduling needs accurately, respond to real-time events without having to rely on expensive temp workers, and minimize overtime.
3. Are payroll and HR spending too much time manually doing tasks that can be automated?
Using WFM tools to automated what's currently done manually minimizes risk of human error, and frees up staff time to invest effort into higher value tasks. Just think about all of the time it takes for people in management roles to complete regular tasks, like creating and updating schedules, correcting timesheet errors or onboarding employees.
4. How complex is your employee scheduling?
The more variables involved in your company's scheduling process, the greater the need for a more sophisticated WFM scheduling tool. Number of workers is only one variable. Other variables to consider include quantifying the range of:
• Roles to be filled
• Skill sets needed and how specialized those skill sets are (i.e. what level of cross-skill proficiency does the staff have?)
• Types of shfits and hours that need to be covered
• Locations where workers may be sent
• Season or other demand fluctuations
• Types of workers available (e.g. employee, contingent, etc.)
The more variables in play, the more sophisticated a scheduling and forecasting tool your company needs.
5. How dependent is your company on hard-to-replace skill sets?
Whether it's institutional knowledge or technical skills, many company have a pool of employees they dread the thought of losing. If your company relies on having a certain depth of skill or expertise, WFM talent management tools can help you identify those skills and expertise currently reside, and which employees are candidates to get further trained to deepen your bench.
Your answers to these questions provide a starting road map for the types of business goals and functions you want an WFM program to fulfill. Here are two more issues to think about when clarifying the scope of the WFM program that will most benefit your company.
For large companies that have to juggle a high volume of workforce variables, the breadth of their WFM requirements and infrastructure adds its own layer to the complexity of executing a successful WFM program. Their WFM program will likely include integrating a variety of WFM software tools and conducting sophisticated data analysis to benefit from the WFM system and improve decision making.
IN addition to the IT needs, a company-wide WFM program often requires one person with ultimate ownership to oversee it. Part IT, part HR, some companies find creating the role of a workforce asset manager (WAM) brings some needed unified structure their WFM program.
The freelancer workforce grew by 7% over the last five years, outpacing the growth of non-freelance workforce at 2%.
The growing use of contingent workers and independent contractors brings a host of compliance and management challenges. Fortunately, various WFM tools can help. For example, a sophisticated WFM and time and attendance system can differentiate between employees and contingent workers for purposes of calculating hours and determining which payments fall under payroll and which are invoiced. Read more about WFM processes and tools to assist in contingent worker management.
Workforce management tools and techniques can directly improve HR functions and free up HR staff time to handle more face-to-face issues. Here are three ways to different collections of WFM tools and process can make the HR department more effective and efficient.
Smart onboarding creates engaged workers
Studies on employee engagement have found that a company's onboarding program is an accurate predictor of strong employee retention. A successful onboarding program welcomes new employees operationally, technologically and socially into the company, using WFM optimizations techniques to do so.
60% of employees are more likely to still be with the company after three years when the company has a structured onboarding program.
Leveraging WFM solutions when there's high employee turnover
You already know the high cost of high employee churn. The costliest employee turnover happens when your company loses its most valuable employees. How well does your company do in identifying its most productive workers? Streamlining your employee retention programs and avoiding the costliest churn is the hidden gem of managing employee turnover.
WFM analytics can help operations and HR identify what realistic benchmarks of high performance are. Let your high-performing outliers set the bar. By identifying your most valuable outliers, you know where to focus retention efforts for maximum return. You can also use these employees as templates to map out behavioral expectations, metric goals, and up- and cross-training plans to raise up other current workers into high-performing status.
Heres an additional discussion on how WFM can help your company address the two other main causes of involuntary employee turnover.
Empowering employees to self-serve reduces admin burden on HR staff
One of the best ways to use WFM tools is to empower workers and employees to self-serve on a variety of scheduling and HR issues without having to take up HR staff time. Implementing time clocks with an interface that can double as a self-service kiosk lets workers check their schedules, submit vacation requests and perform a variety of other functions based on the information in your company's WFM system.
Time and attendance policies are key to productivity, as they increase workforce efficiency. WFM tools have been game-changers in the ability of the operations team to forecast scheduling and maximize productivity without having to increase labor costs.
Both operations managers and HR can use WFM data analysis to improve adherence to schedules and time and attendance policies.
Gain actionable insights into attendance trends
WFM data analysis can reveal where scheduling conflicts are often occurring, so managers can adjust future schedules to avoid common conflict causes. Worker-level analysis can identify those who have frequent attendance issues, giving the manager time to review, correct, or modify worker behavior to the benefit of the worker and the company. It can also highlight whether there are attendance issues that stand out by shift or department, enabling managers to address a larger situation.
Improves record-keeping and compliance
Every company has a myriad of federal regulations, state regulations, labor contracts and its own policy with which its scheduling of shifts, breaks, and total hours must comply. Entering all those business rules into a WFM scheduler engine reduces the risk of your company falling out of compliance with any of these requirements.
Using time clocks that deliver time and attendance data back to managers and other systems in near real-time is the back-up process that helps managers avoid unplanned overtime or over-scheduling a worker. It also ensures that team members take all their required breaks (we'll get into the issue of managing break time in more detail below).
One of the most direct ways a company realizes savings through automated time and attendance and WFM systems is by achieving a more accurate payroll. Cost saving are achieved through:
These systems achieve such savings by:
The right combination of WFM and time and attendance policies and tools can transform payroll from a cost center into a cost management tool.
Time clocks backed by sophisticated WFM tools collect a massive amount of hours and wage data that your payroll department can analyze for trends, now that they spend less time correcting errors. For example, they can assess the comparative costs of authorizing overtime versus hiring new permanent or temp employees.
Both HR and payroll can re-position themselves as a research and analytics team for the company, that can offer insights that influence company strategy.
Certain industries and worker segments present a particular set of challenges in managing their scheduling, time and attendance tracking, and payroll. WFM policies that are worker or industry-centric can help HR and payroll navigate these issues.
Challenges of contingent and mobile workers
Needs of industries with primarily non-office workers
The bulk of the workforce in a number of industries don't actually work in offices. If that describes your company's workforce, here's some WFM guidance for two such industries. Even if your industry isn't represented here, you'll find valuable take-aways that you can apply to your company.
Hospitals, care facilities and practices are typically chaotic workplaces. Health care providers also aren't in a position to enforce hard breaks when people need to stop working, as the "emergency" in this industry genuinely means emergency.
An effective WFM program for a health care employer needs to provide policies and tools so it can address how to allow workers to make up missed breaks, accurately calculate payroll for missed break time, provide an easy-to-use mechanism by which workers can inform managers of missed breaks, and generate compliance-worthy documentation about all of it. You can read more about some WFM best practices regarding such tools and policies in our article Staying on Top of Wage and Hour Laws.
The ability of WFM analytics to provide granular insight into shifts in demand offers great potential for hospitality venues like casinos, reservation centers, and hotels to realize significant cost savings through smarter scheduling.
Managers and HR can leverage the skills modules in a WFM system to improve cross- and up-training, resulting in a more loyal and flexible workforce.
You'll find a number of suggestions on how to use a WFM as a strategic talent development tool in our article Workforce Optimization Best Practices in Hospitality.
Since hospitality is an industry with a high percentage of contingent workers, hers' a list of WFM best practices on how to manage this fluid worker pool without sacrificing on customer service or compliance requirements.
Workforce happiness and engagement directly impact labor costs, and labor costs directly impact your company's revenue, profitability, and competitiveness. This relationship can either be a virtuous cycle of mutual reinforcement of good behaviors and results, or...it can become a death spiral of high employee turnover, high costs, and unhappy management.
Having an effective WFM program with its comprehensive set of tools, policies, and culture is the foundation that supports the virtuous cycle of happy, productive employees and profitability.
As workforce requirements and the makeup of the workforce are evolving in new ways, the WFM program needs flexibility to change along with it. Be sure the check back for updates on new trends and opportunities to streamline your company's WFM protocols for continued success.