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What Exactly is Workforce Management and Why is it Important?

what is workforce management
Alexandre Diard
what is workforce management

In essence, workforce management is ensuring that the right number of agents with the right skills are in the right place at the right time. To further break this down, the goal is to have people available that can respond to the calls, emails, and web chat interactions when your customers are trying to reach you. It’s a balancing act because you also don’t want your employees getting paid for sitting in front of a screen when there aren’t any customers reaching out.

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What is Workforce Management

 

Workforce management, in the most basic terms, is a framework that enables companies to optimize employee productivity. While it started as a process for scheduling mostly contact center agents by increasing productivity, efficiency, and consistency, it is now used across various job functions and industries to strategically increase organizational performance.

It is comprised of various components, some of which will be discussed below, including human resource management (HRM), performance and training, scheduling, collection of data, recruiting, forecasting and budgeting, and analytics.

 

Scheduling

Scheduling deals with ensuring that the right number of people are in place during each interval of the day. A key element of staffing is the coverage objective. The volume of work may not always be predictable, but it may follow a pattern over time. Balance over or understaffing is a technique in which certain portions of the day are left understaffed, while others are overstaffed. The factors to be considered for scheduling are the length of the shift, days off, breaks, transportation, and business rules.

While understaffing can impact service levels, overstaffing directly affects profitability because the company is paying for staff who are not being fully utilized. Scheduling deals with ensuring that the right number of people are in place during each interval of the day. Employee scheduling software helps with this as it provides staff work schedules and provide solutions such as to automate time&attendance with electronic timesheets, time-clock,  workforce scheduling, which will be a solution to you labor-management while keeping the employee satisfaction as it will be from a easy-to-use, customizable platform. 

 

Time and Attendance

This is typically one of the first things people associate with workforce management. However, companies can glean more for other management-tools from timesheets than just clock-ins and clock-outs, or lunch breaks. Time and attendance tell the story of those who show up for work and those with excessive absences.  

An aggregation of time-tracking data can provide useful insights into a company’s economic health. Striving for perfect paychecks starts with accurate timecards since payroll is directly informed by the rules used to capture various time types. 

 

Labor Costing

Labor costing is challenging for several reasons. These include labor demand fluctuations which result in unpredictable costs, reduced insights into overtime, inaccurate planning leading to over and understaffing, and inefficient manual processes producing assignment errors.

Companies need to be able to control labor costs and optimize work schedules through real-time workforce insights. One of the most effective methods to control costs and improve efficiencies is scheduling automation. Flexible scheduling makes the assignment of workers more cost-efficient despite fluctuations in labor demands. Finally, accurate, demand-based forecasting avoids over and understaffing.

 

Payroll Administration

 Payroll administration involves the necessary tasks in organizing employees’ compensation for the time they have worked, including tracking the hours worked, pay rates, and administering employee payments. It is particularly important for organizations that use commission systems.

Small business owners typically handle their own payroll administration since the number of employees is usually small. They may track payroll concerns and facilitate payments using software or paper. Software has the benefit of issuing and tracking payments that have been made. Additionally, it is helpful in direct deposits and accounts used for funding payments.

 As a business grows, it is important to ensure that sufficient time is allocated to payroll administration. Doing so prevents accounting and payroll errors, thereby guaranteeing employees receive accurate compensation on time.  

Payroll administration must also ensure that payroll tax deductions are properly deducted. This process can sometimes prove to be overwhelming, as it involves direct deposit issues, tax exemptions, and tax deduction problems. Errors in these areas can create serious complications, so it’s critical that payroll is managed in an effective and efficient manner.

Lastly, payroll administration involves ensuring company payroll policies are in compliance with employment laws. This includes things such as holiday pay, overtime, and payroll changes. As a business grows and employs more workers, payroll administration becomes increasingly complex and it’s important to have the people and tools necessary to manage these tasks.

 

Leave & Absence Management

Organizations of all sizes face the challenges of employee leave and absenteeism, with many placing the burden on managers to manage federal, state, and organizational policies that change constantly. Employers look to HR software solutions to alleviate manual processes, but it's not enough. Employers are still required to send documentation, provide ongoing employee support, and coordinate multiple HRIS systems and vendors across HR, payroll, time, and benefits, making the financial impact on the bottom line difficult to measure.

Employers recognize that complicated processes or employees dealing with leaves on their own, at a time when they're already dealing with personal matters can be quite challenging, all of which can lead to frustration, higher absenteeism and turnover, and increased litigation risk.

If incorrect information is communicated with this level of complexity, compliance risk and employee productivity are on the line. Organizations need a holistic absence management strategy that integrates across their entire human capital management spectrum to stay current with federal and state leave regulations, ensure employees perceive that they’re being treated fairly and consistently, and maintain visibility on the impact of absenteeism on its bottom line.

 

The Importance of Workforce Management

 

As previously mentioned, workplace management is a balancing act of keeping both agents and customers satisfied. If employees are given undesirable schedules and shift patterns, it might mean that customer inquiries can be handled better, but at what cost? Staff won't be particularly happy, attrition rates may rise, and you will have to recruit and train new employees, which can be costly for businesses. This applies to both the on-site employees as well as your mobile workforce

According to the Society for Human Resource Management (SHRM), the cost of replacing an employee could cost the company 50% to 250% of the employee’s annual salary. For an agent making $40,000, that could be $20,000 to $100,000 in recruitment and training, not to mention the non-monetary effects on teams, managers, and the organization.

On the other hand, if employees are given exactly what they want, customers may not be serviced properly because there’s no one available. The importance of workforce management lies in finding the happy medium between having happy customers and happy employees. And ultimately. this influences the bottom line, which is the the profitability of the business.

 

Workforce Management Software

 

Workforce management software is used by organizations to track, plan, and manage employees’ work. It includes paid time off, employee scheduling, and labor requirements. These platforms typically include an HR dashboard with a myriad of features that facilitate workforce optimization efforts. Businesses utilize workforce management software through an HR portal for HR reporting workforce efficiency, tracking attendance, creating and assigning schedules for employees, and forecasting labor demand.

These solutions are typically implemented within a company’s HR department or as a standalone product for those without traditional HR departments. Many workforce management solutions include an employee experience platform (EXP) that enables employees to check their PTO balances and request time off through self-service options instead of without interfering with an HR workflow, reducing paperwork and allowing HR personnel to focus on strategic matters.

 The software can be implemented within an integrated HR management suite or as a standalone product, and they typically integrate with third-party applications. HR systems typically serve as the central repository for data about the workforce.

Workforce management isn’t a new concept. Organizations have been automating these processes to deliver enhanced results for decades. However, software has greatly evolved over time and is used by all types of companies to improve and monitor the efficiency and effectiveness of their workforces as some can provide predictive data that can further provide solutions that can't be seen without the clarification that a workforce management system can provide. 

With the increase in cloud-based computing and the quick increase of workforce analytics, the workforce management market, best-of-breed software included, has resulted in significant growth, especially in PaaS. A study by Market Research Future estimates that the workforce management market will total $9 billion by the end of 2022.

 

Conclusion

 

Workforce management has evolved into a complex structure for businesses of all types which enables the improvement of time management, forecasting of workload and staffing, and providing workplace analytics. It’s more than just employee scheduling and performance.

Workforce management influences how a company should invest in its people through training and coaching so that they have the skills they need to do their jobs effectively. It helps to decrease costs and increase customer satisfaction by consistently automating the monitoring of employees. Furthermore, businesses are empowered to predict demands, as well as determine whether cuts need to be made and prevent being overstaffed by establishing how many employees are actually required at any given time.

Workforce management may have started as merely scheduling for call center employees, but it has since evolved into a complex management framework to track overall productivity. This becomes even more relevant, enabling companies to oversee those who work off-premise, as more and more employees have the flexibility to telecommute.