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 helps empower employee autonomy and flexibility. It can also help businesses comply with changing and complex regulations, better manage contingent workforces, and more deeply engage employees.
Above all, workforce management can generate tremendous cost savings. Wages and salaries for private industry workers accounted for 70.3% of employer costs in 2024(opens in a new tab), according to the U.S. Bureau of Labor Statistics. For state and local government workers, it accounted for 61.6% of employer costs that same year. Companies have a material opportunity to cut down these costs with better workforce management, and effective technology can help. For example, research indicates that 80% of manual payroll processing costs could be reduced with automation(opens in a new tab)
8 Best Practices for 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:
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.
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.
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. AI can help provide additional support to training for managers and employees by analyzing individual learning patterns that will help create customized training materials and adjust learning paths based on a person’s progress. The technology can also assist with analyzing an individual’s performance data and generating feedback with actionable advice.
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. Generative AI can offer assistance in workforce planning by gathering and summarizing historical data and market trends. This information can help companies as they analyze, forecast, and budget for staffing and hiring.
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.
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.
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.
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.
Simplify
HR and Payroll
Work Smarter on Workforce Management With HRMS
Adding workforce management software is an important part of a human resources management software (HRMS) and human capital management (HCM) software strategy because of the potential cost savings and efficiency gains. Many businesses that implement workforce management software report that cost savings are the most common and biggest benefit. Workforce management can also help companies improve sales performance and customer service by scheduling enough people with the right skills to the right positions—whether that’s in a retail store, an intensive care unit, a call center, or a factory floor. This leads to happier employees and better customer service.
According to a report by Deloitte and Oracle, there is on average a 30% gap(opens in a new tab) 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 companies provide a mix of in-the-office, hybrid, and remote work, 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 help businesses know they’re 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 and customer satisfaction.
