What is Workforce Management?
When it comes to workplace efficiency, the smallest things can have the biggest impact on your business. The Workforce Institute has found that U.S. businesses waste $687 billion each year on unnecessary administrative work.
One of those “small” administrative tasks? Employee scheduling.
Employers easily spend up to 12 hours on scheduling per week, without any guarantee employees will actually stick to the plan or show up for their shift. But it’s not just employers feeling the consequences—canceled shifts and unexpected schedule changes also cost the average minimum wage worker 7 percent of their annual income. These small things start to add up fast, and over time, they can affect every part of your business.
Instead of struggling with unpredictability, it is possible to maximize efficiency and turn scheduling (and your labor force) into your strongest asset. It all comes down to workforce management.
Defining workforce management
Workforce management, also known as WFM, is an integrated set of tools and processes that help businesses ensure the right people are in the right role, at the right time. This concept originally got its start in call centers, with the goal of helping managers identify the best number of hourly workers to keep up with call demand.
Using a workforce management approach allows you to increase efficiency both company-wide and at the individual employee level. It’s about finding balance with all your business’ moving, human variables and combining them in a way that produces the best result. Essentially, you’re aligning all the right factors in place for the most optimal outcome.
Okay. But what does workforce management actually do for your business?
Consider this: it’s hard to create a perfect customer experience every time. Yet after a single bad experience, it’s not likely that a customer will give your business a second chance. Instead of throwing together what you think are the best factors—your best employees with the best skills, your best product—and hoping for the best customer experience, workforce management “sets the foundations for whether or not you get it right the first time.” While you could spend time and resources recovering from a bad customer experience, workforce management can help you avoid it in the first place.
Workforce management vs. workforce optimization
By now, workforce management might be starting to sound like another business strategy that’s gained notice of late—“workforce optimization.” However, workforce management isn’t the same as workforce optimization. The two may seem similar (and have similar goals) but aren’t exactly interchangeable. Workforce management is a system of tools and processes that support scheduling and staff availability, which in turn supports overall workforce optimization. Whereas workforce management is a spoke, workforce optimization is the entire wheel.
How workforce management works
“Ensuring the right people are in the right role, at the right time” sounds almost too good to be true—so what does that look like in practice?
Successful workforce management involves several key areas:
Forecasting and budgeting
In order to match the right staff with the right resources, you have to know what type of—and how many—resources your business requires at a given time. You also need an idea of what your budget is going to be, how much staff you can afford to have on hand, and what customer demand will be like. For example, if your summer busy season is fast approaching, you’ll need to start forecasting in order to know how many seasonal employees your business is projected to need. Here’s a quick forecasting 101 to get you started.
The bulk of workforce management comes down to scheduling. For anyone who’s ever built a schedule from the ground up, you know how time-consuming manual scheduling can be. Workforce management can automate the scheduling process to take all variables into account (summer vacations, availability, past time-keeping patterns) and produce an optimal schedule that employees can also weigh in on. Ideally, using WFM will help keep things from falling into the cracks and make it easier to cover sick days or no-shows, so that you aren’t ever left without enough resources.
Timekeeping and attendance
Good workforce management doesn’t just take the future into account, but also the day-to-day. Are your employees showing up on time on a regular basis? Do they often miss or swap shifts? Are they reliable? Who’s clocked in and making the most sales? Having an automated timekeeping and attendance system can get employees on the job sooner, make it easier to track employee attendance in real time, and ensure your payroll is accurate.
Employee performance and satisfaction
Knowing how much demand to expect, creating a schedule, and tracking employee attendance are all vital parts of workforce management. But the last factor is also the most important: how your employees perform on the clock and how they feel about their performance. Only 13 percent of today’s employees report feeling engaged at work. In contrast, workers who rank high in engagement outperform their poorly engaged peers by 20 percent in sales.
Bottom line: you can get all the right factors in the right place at the right time. But even perfect workplace management can’t fix an employee who isn’t reliable or motivated to do their job. You need to identify your top performers, but you need to make sure they stay motivated individually and that your team maintains healthy morale overall.
Bringing it all together
When all of these variables of your business work together, not against each other, you’ll be able to create an efficient provision of labor that matches labor demand. This can be tricky to do manually (and involve a lot of spreadsheets), which is why workforce management often comes in the form of software or a suite of tools that combine data from multiple sources within your business.
Using a workforce management solution, you’ll be able to automatically integrate patterns from your employee schedule and time clock to match your budget and forecast. Many workforce management solutions also include HR features like performance management and applicant tracking systems to help you keep an eye on how your current employees are performing in their roles— and track new positions you may need to fill to match upcoming demand in your forecast.
What to look for in a workforce management solution
Like any new tool, the most important part about choosing a workforce management solution is to invest in something you’ll actually use. If your workforce management software is difficult to implement or hard to learn, chances are that it won’t become part of your everyday routine and make the impact it should in daily operations.
Remember that $687 billion price tag? Find a solution that takes care of those small tasks so you have the flexibility to focus on what matters for your business. A good workforce management solution will help you cut down not just on costs, but also inefficiencies and manual admin—whether that’s building the week’s schedule or making it seamless for employees to update their availability and swap shifts.
Even with the right solution, workforce management won’t transform your business overnight. It’s a process. The more you use it, the more insight you’ll have into staffing, employee performance, and what it takes to create a great customer experience—every time.