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?

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.

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.

Workforce Management vs. 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.

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 pulls together disparate information. Here are some of the areas and data collected.

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.

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.

Workforce Management Processes

  • 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.

Examples of Workforce Management

Businesses will use workforce management in different ways, but here are some examples of how it might be deployed.

Schedule assessment

A retail outlet is alerted to a trend that it’s regularly short-staffed for the opening shift. The manager can easily examine the data to find out why and take appropriate steps, such as training more employees to fill that role.

Demand forecasting

The holiday season is approaching, and the managers of the retail outlet need to identify how many employees are needed in the store for increased demand. And then they need to decide if they should to hire new employees, either seasonal or permanent. Advance workforce management software can predict necessary staffing levels based off historical trends and other information.

Performance monitoring

Performance monitoring reports allow you to track how employees perform and adhere to work requirements, such as how often they complete a task or the time it takes to do so. Regular performance monitoring and employee feedback cycles help improve efficiency and employee satisfaction.

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. Where are operational costs increasing? Is absence costing the business too much? Is manual scheduling resulting in non-optimal staffing levels?
  2. Ensure the basic solutions are in place for governance and compliance—including core human resources functionality that has digitized employee data and payroll.
  3. With the basics in place, roll out self-service systems for web-based time capture—including punch cards, overtime requests and time-off.
  4. Analyze HR data. Create KPIs around labor costs and productivity to map to business goals and expectations and ensure your employees understand them.
  5. Hold trainings on how to use the tools and communicate their value. Make sure managers understand the process and the value behind it.
  6. Integrate workforce management with HR and payroll systems to help your HR team when calculating accurate pay for each worker.
  7. Ensure buy-in at the highest levels of the organization. Data-based workforce management won’t work if leaders are still basing all decisions on gut instinct and not giving proper due to the data.

Measuring 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.

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.

Future of Workforce Management

The best workforce management solutions will take advantage of technology to balance the needs of employees and employers. Automated scheduling and time-off requests, as well as demand forecasting will help remove human error in the workforce management process. Small and large businesses alike will benefit from removing emotion from the equation and staff based off data. And cloud-based ERP systems will allow the platform to scale as your company grows.

Finding ways to best leverage employees’ skills to protect employment while minimizing unnecessary costs will be a key business advantage. What’s more, workforce management software is proving its viability in efforts such as contact tracing, employee health checks and ensuring staffing meets capacity regulations in the most cost-effective manner, with leading workforce management products adding functionality to that end.

Workforce management is about matching the right employee with the right job at the right time. From the hiring and recruitment process to scheduling, training and even performance monitoring and feedback. It leverages data from disparate sources to help you improve employee engagement while running as efficiently as possible.