Businesses with call centers have known the value of strong workforce management strategies for many years now—and their early lessons have paved the way for the development of processes and leveraging the technology across all scheduling intensive industries. Workforce management will only increase in importance as businesses look to optimize and predict staffing levels, comply with new regulations around physical distancing and capacity and find ways to keep employees both productive and safe.

What Is Workforce Management (WFM)?

Workforce management is most closely associated with time tracking and scheduling, but it’s much more than that. It includes all of the processes and systems that help you engage and leverage the time and talent of your employees. Workforce management lets employees and contractors log and track their time to correct pay codes, request time off and plan schedules. It also helps you stay compliant with labor laws and union agreements.

More advanced workforce management software incorporates analytics and AI capabilities to help companies better predict and make recommendations on their staffing needs.

Key Takeaways

  • Workforce management software lets you optimize scheduling, automate time-off requests, and manage absences.
  • It can also monitor compliance with federal and local labor laws.
  • Trainings, performance monitoring and employee feedback helps keep your workforce engaged while continuously improving.
  • Advanced workforce management software can forecast demand based on historical data and help make workforce plans.
  • The platforms can assist with contract tracing to help keep your workforce safe and healthy.

Workforce Management Explained

Workforce management software features usually include the following features:

  • Time tracking and attendance
  • Scheduling, including ensuring adequate staffing
  • Automatic time-off accrual calculations
  • Federal and state labor law compliance monitoring
  • Pay code tracking

Advanced analytics and AI enable companies to forecast staffing needs and let employees trade and manage shifts on mobile devices. Scenario planning finds the most cost-effective and customer-friendly staffing levels, while also planning for contingencies.

During the COVID pandemic, many workforce management tools have been upgraded with special functionality to make contract tracing easier and even integrate wellness checks into employee time tracking systems.

How Does Workforce Management Work?

Workforce management (WFM) involves balancing forecasting, staffing, scheduling, and real-time adjustments to make certain that the right mix of employees with the appropriate skills are available when needed. The goal is to meet the organization’s requirements (such as service levels and production targets) while also considering what employees need and want in their jobs Here’s are the many components of workforce management:

Real-time data collection

With workforce management software, data on employee performance, staffing levels and other areas to eliminate as much wasted time as possible and more efficiently allocate resources.

Field service management (FSM)

Your employees might not always be able to perform their tasks from the comfort of their own homes or offices, and you may have a field service team. Unknown environments present new variables and challenges. FSM is designed to help track and dispatch field technicians and typically include vehicle tracking, scheduling, inventory management and even customer payment and feedback tools. As a note, some companies view FSM as a different category of software that is not a part of core workforce management.

Human resources management (HRM)

Data from the human resources management system like employee files, including contractors and seasonal workers, is integrated with the workforce management system.

Training management (TM)

Administer, track and report on trainings for employees. Trainings can be for compliance and safety purposes, or just a way to streamline employee education on things like new equipment or processes.

Performance management (PM) and monitoring

Set goals or key performance indicators with employees and then track their progress. Schedule regular evaluations and allow for employee feedback to keep them engaged and to improve strategy. PM and monitoring also keeps a record for employees and teams so new managers and others can see a history of performance to gain perspective. This also helps you spot top performers, as well as some who may need improvement.

Recruiting

Bringing the right number of employees with the skillset to match the needs of your business is not an easy task. It’s more than just reactionary filling vacated job posts. It involves identifying areas of possible growth or bottlenecks and matching workforce with strategic goals.

Budgeting

In a typical annual budget process, leadership and finance will likely agree on a budget and approximate headcount for the year. But that budget will not articulate what that means for individual teams and this is when workforce management comes in. Detailed human capital management information about historical trends, including turnover, recruiting and realistic timelines will help flesh out the budget.

Demand forecasting

Advanced technology in the system can predict changes and needs in staffing levels and make recommendations on actions to take.

Scheduling

In addition to basic scheduling functions, workforce management software can integrate with other data sources, such as call center volume, store-level data from POS systems and sales forecasts, to predict staffing needs and automate scheduling.

Analytics

You’ve collected all this workforce data. Now what? Workforce analytics help you demonstrate return on investment evidence, track employee productivity and shed light on workforce planning. You can also use the analytics to identify a specific workforce related issue and develop a plan to address it. For example, you might have a high turnover. By analyzing the data, you may be able to identify trends for teams with high turnover rates and dive into the data to identify common characteristics.

Time clock

Employees might scan a badge to clock in. But more advanced software uses GPS and mobile applications to track employee work hours. It can even account for meals, breaks and overtime and holiday pay.

Leave and absence management

Accrual policies are customizable, and your employees and managers can use it to view, request and approve time off.

Why Is Workforce Management Important?

Workforce management is about timing. How do we get the right employees in the right place at the right time? This can be an enormously complex task that involves employee management, scheduling and forecasting. At its best, workforce management can decrease operational costs, ensure compliance with shifting market, legislative and industry conditions and increase employee productivity and engagement.

It can also help keep employees and customers safe. Workforce management software lets you contact trace and comply with restrictions on capacity.

Workforce management has typically been viewed for its value in tracking hourly employees. But even as more staff work from home, workforce management software helps measure absences, monitor PTO and create feedback mechanisms for employees and managers who have less contact than when they worked in a physical office.

Workforce Management Processes

At its core, WFM encompasses a broad range of activities including forecasting labor demands, scheduling staff effectively, managing time and attendance, ensuring compliance with labor laws, and optimizing staff allocation to meet business needs. The idea is to align the workforce’s skills and availability with the organization’s operational goals so that resources are utilized optimally.

  • Forecasting and budgeting: With advanced analytics and AI capabilities, the system can make recommendations on optimal schedules and staffing levels as well as allow scenario planning to adjust budgets.
  • Staff scheduling: Information on availability, skills and eligibility is pulled together with forecasts and historical data to inform scheduling and staffing levels—particularly in line with the current capacity restrictions.
  • Time keeping and attendance: Employees punch in with software (usually by scanning a badge or entering a code) to clock in. The software can flag missed punches, skipped breaks or late arrivals. It’s integrated with the payroll system. It also provides contact tracing information so you can see who employees interacted with and where they were, which is particularly relevant in today’s environment.
  • Employee performance management & satisfaction: Setting goals and involving employees in the feedback process with regular performance reviews helps keep them engaged. Bringing disparate data together in one space lets you and your employees see reports such as time worked, trainings completed and goals met and set. Each employee is different and meeting team members where they are, regardless of background, age or experience is vital.
  • Compliance: Workforce management software ensures compliance with state and federal labor laws for breaks, payment, time-off policies and others. You can also create and track compliance with your own corporate or labor policies.
  • Payroll and benefits administration: You need to accurately report time off, hours worked to ensure payroll is accurate as part of your human capital management (HCM). HCM platforms also manage benefit administration, including health plan benefits. The software will help you create and control multiple plans for open enrollment throughout the year and monitor employee enrollment status, pricing and eligibility.
  • Vacation and leave planning: The software allows employees to track and request PTO (paid time off). It can automate the approval if it’s in line with certain rules in the system or alert the manager if it is not, such as too many people in the same department taking time off simultaneously. Employees can also trade shifts on their own, increasing flexibility for employees and decreasing absenteeism and even attrition rates.

Benefits of Workforce Management

The benefits of adopting good workforce management practices include lower labor costs, accurate payroll and fewer compliance violations. Workforce management improves customer service by helping employees be more productive and placing them in the best position to increase sales or productivity. This leads to increased employee engagement and higher customer satisfaction levels.

Advanced features or benefits include automated time off approvals, schedule forecasting, and employee monitoring and management. What’s more, modern workforce management is an enabler for contact tracing and making sure safe capacity restrictions are in place. In sum benefits include all of the following:

  • Lower labor costs
  • Accurate payroll
  • Fewer compliance violations
  • Improved customer service
  • Increased employee productivity
  • Optimal positioning of employees to increase sales or productivity
  • Increased employee engagement
  • Higher customer satisfaction levels
  • Automated time off approvals
  • Schedule forecasting
  • Employee monitoring and management
  • Enablement of contact tracing
  • Maintenance of safe capacity restrictions

7 Steps to Successful Workforce Management

To get started with workforce management software and adopt workforce management software best practices:

  1. Identify the business pain points: Assess areas where operational costs are escalating, such as excessive absenteeism or inefficient manual scheduling leading to non-optimal staffing levels, to understand where improvements are needed.
  2. Ensure basic solutions for governance and compliance: Implement core human resources functionalities that digitize employee data and payroll to comply with legal standards and improve governance.
  3. Roll out self-service systems for time capture: Introduce web-based systems for employees to record working hours, request overtime, and apply for time off, streamlining time management processes.
  4. Analyze HR data: Develop Key Performance Indicators (KPIs) related to labor costs and productivity to align with business objectives, ensuring employees are clear on these goals.
  5. Hold trainings on tool usage and communication: Provide training for employees on how to use workforce management tools effectively and communicate their benefits to ensure widespread understanding and adoption.
  6. Integrate workforce management with HR and payroll systems: Enhance accuracy in payroll processing by linking workforce management systems with HR and payroll, facilitating correct compensation for each employee.
  7. Ensure buy-in at the highest organizational levels: Secure commitment from top leadership to rely on data-driven decisions for workforce management, moving away from decisions based purely on intuition to those backed by data.

Measuring Workforce Management

Measuring workforce management is vital for optimizing resources, improving employee engagement, ensuring compliance, and enabling strategic decision-making, all of which contribute to the overall health and success of the organization. Here are a few common areas to monitor:

  • Time and labor management: Do you have enough employees working while still keeping all of them productive?
  • Absence management: Can your employees request time off and is the system automated to best manage your scheduling functions? Is break and other mandatory time tracked for compliance?
  • Project tracking: Some projects are more important to the business than others. And resources, including human resources, can be prioritized to these areas and workforce management can help with that staffing and prioritization.
  • Scheduling: Predict volume, track scheduling and performance by location and forecast need. Create KPIs to connect your workforce with sales and other indicators.

A complete workforce management solution includes both transactional and analytic functionality, with business intelligence tools for planning, budgeting, monitoring and compliance.

What Is a Workforce Management System?

Workforce management software automates processes and provides reports and analytics. Workforce management systems include functions for time and attendance, absence management, labor budgeting and forecasting, and scheduling. It combines the functions of budgeting, planning, analytics, collaboration and rules-based scheduling solutions. Data is reconciled with the availability, skills and eligibility of workforce personnel.

Choosing a Workforce Management Solution

Businesses of different sizes and organizational structures will use workforce management differently—from small businesses to professional services organizations. For small businesses with a contact center or complex staffing needs, workforce management software can offer significant savings in operating costs by reducing overstaffing levels. It also has a number of other benefits, including administrative personnel making fewer payroll errors, spending less time fixing them and keeping overtime costs in check.

Look for industry expertise. The best software packages include pre-built templates for scheduling based on best-in-class metrics collected from those within your specific industry. The vendor should have strong experience in the country of operation to ensure compliance with federal and local labor laws. Cloud-based workforce management brings added advantages of quick deployment, advanced analytics and AI capabilities, as well as the ability to access it anywhere at any time.

Improve Workforce Management With ERP

Enterprise resource planning (ERP) systems are shared database for all financial and operational information from across your entire company. Human resources modules are one piece of ERP. Integrating workforce management functionality with the HCM system ensures that scheduling and forecasting technology is working with the most current and accurate data. Integrating with payroll software helps make sure your employees are accurately paid for hours worked and overtime. And workforce management data can be combined with talent management systems to optimize schedules by skill levels, identify high performing employees and provide relevant training to employees.

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Workforce Management FAQs

What’s the difference between workforce management and workforce optimization?

Workforce management looks at data to help with things like scheduling, correct record keeping for pay and time off, as well as maintain sufficient staffing levels.

Workforce optimization, on the other hand, is the strategy of using technology to improve the effectiveness of your employees. It started in call centers and has spread to other industries. Instead of contacting a call center and waiting on hold to connect to the first available representative, you provide some basic information and more quickly get routed to the person who can best help you.

Some of this optimization is delivered by AI and machine learning to perform mundane and repetitive tasks, freeing your employees to engage in more interesting and fulfilling work. Workforce optimization also uses technology to provide performance feedback from customer interactions. And while it started in call centers, workforce optimization is spreading to retail, financial services, manufacturing, and other industries.

How do companies measure workforce management?

Set and track goals and KPIs with your workforce management software. Here are a few common areas to monitor:

  • Time and labor management: Do you have enough employees working while still keeping all of them productive?
  • Absence management: Can your employees request time off and is the system automated to best manage your scheduling functions? Is break and other mandatory time tracked for compliance?
  • Project tracking: Some projects are more important to the business than others. And resources, including human resources, can be prioritized to these areas and workforce management can help with that staffing and prioritization.
  • Scheduling: Predict volume, track scheduling and performance by location and forecast need. Create KPIs to connect your workforce with sales and other indicators.

A complete workforce management solution includes both transactional and analytic functionality, with business intelligence tools for planning, budgeting, monitoring and compliance.

What’s the difference between workforce management vs. human capital management?

Workforce management is one part of an organization’s human capital management (HCM) strategy and systems. HCM is the broader umbrella, and workforce management is just one piece. HCM includes all the core HR functions such as employee records, payroll, benefits administration, learning, performance management, talent acquisition, analytics, company directories and talent management in addition to workforce management systems.