7 min read What is Workforce Management (WFM)?
A new term for a not-so-new strategy, "workforce management," usually abbreviated as WFM, is one of the new software solutions that is making a huge impact on businesses large and small. Technically a sub-set of human resources functions, WFM efforts seek to place the right employees on the appropriate jobs at the ideal time. "Right employees" are typically defined as being the ones whose skill sets perfectly mesh with the task at hand.
In short, WFM uses a variety of information technologies to optimize, analyze, and comprehensively evaluate a range of workforce situations in a given organization.
It's noteworthy to realize that WFM strategies and spreadsheets have been around for decades but are only now getting super-charged with smart algorithms, sophisticated software and cloud-based functionality.
One helpful way to think about modern WFM is based on the old "JIT" inventory systems of the 1980s. Then a breakthrough idea from Japanese auto manufacturers, JIT (just-in-time) inventory strategies were able to cut waste and boost efficiency across the board by making sure that goods were delivered to a production facility at the exact time they were needed.
Those early JIT solutions meant minimal inventory storage costs and seamless production lines. The concept bled out to other management strategies over time, and can be said to have fathered the current surge of WFM solutions.
Modern workforce management solutions focus on assigning employees exactly where they're needed. WFM software boasts a wide range of workload forecasting tools, staffing formulas, and dozens of functions that allow for input from workers and managers simultaneously. Common software also optimizes work times, resolves staffing problems, tracks absenteeism, and pretty much analyzes the entire stream of data related to worker hours, pay, productivity and schedules.
Overview of WFM
Software for workforce management tasks varies greatly. Most points of difference focus on price, capability, whether the systems are cloud-based, can be deployed on-premises or not, what platforms can use them, and the size of the business they're suited for.
Even with those multiple contrasts, the huge majority of WFM systems are more alike than they are different. What are the typical components of the most common WFM systems and what are the benefits users can look forward to? Here's a quick breakdown for business users who are in search of the ideal workforce management software solution:
Typical Components of a Comprehensive WFM System
Forecasting and Budgeting
Workforce management solutions shine brightest in the forecasting and budgeting realm. Here, they utilize four key steps to deliver workable, relevant forecasts that managers can use immediately and adapt as the weeks pass.
Step 1:
The first step focuses on making an annual forecast based on data from one, two or more prior years. The more data used in the look-back period, the better. The goal of the manager, at this point, is to create a synthesized view of what a typical year looks like, without worrying about seasonal variations, extraordinary events or atypical occurrences.
Step 2:
The second step does take seasonality into account, mainly by observing multiple month-by-month data from past years. If, for example, a company's workforce demands routinely peak during the summer, historic data might help managers build a graphic representation that clearly depicts how many workers are needed on a quarterly, monthly or weekly basis.
Step 3:
Step three digs even deeper as managers view day-to-day figures that uncover weekly changes in needs, take holidays into account, and even more clearly assist with knowing how the entire workforce swells and contracts between a typical Monday and Sunday cycle.
Step 4:
Finally, and logically, the fourth step entails an hour-by-hour look at staffing needs. Here, even finer detail stands out and shows just how a normal day progresses in terms of staffing demand.
This four-step forecasting/budgeting approach assists organizations when it comes to planning the types and numbers of workers needed to meet demand. The result: labor costs come under control because production schedules are met, and redundant workers aren't on the payroll.
This four-step forecasting/budgeting approach assists organizations when it comes to planning the types and numbers of workers needed to meet demand. The result: labor costs come under control because production schedules are met, and redundant workers aren't on the payroll.
Time/Attendance
Time and attendance is a core function of most WFM solutions. A comprehensive approach, like ClockInEasy's offerings for entities of all sizes, has the capability to track not only every conceivable variable within a timesheet, but payroll, PTO/overtime, biometrics (to prevent fraud), labor compliance and more. Cloud-based reports let managers do payrolls and review data from anywhere.
Employee Performance
WFM helps managers view and organize employee data based on qualifications and core skills in order to set ideal schedules. This function of WFM allows users to reward good performance and identify those who need extra assistance with particular job functions.
This aspect of WFM usually contains text or other messaging capability so managers can communicate with each other and with workers who place online schedule requests. The better WFM software allows for two-way communication and schedule edits in real time.
Compliance
Organizations often find it difficult to comply with complex government regulation, primarily those concerning FSLA and FMLA, the Fair Labor Standards Act and the Family Medical Leave Act. In fact, there are dozens of federal laws and regulations that WM software can address. Managers need not worry about manually tracking each worker's hours, time off, etc.
A fully-functional workforce management solution can be adapted to meet worker compliance with all sorts of legal scenarios. In many ways, these components of WFM software are similar to accounting solutions that track an entity's compliance with hundreds of tax laws on a day-to-day basis.
Administration of Payroll/Benefits
One of the most obvious areas of "expertise" for WFM processes has to do with payroll and benefits administration. Because workforce management data holds all the core metrics that determine each employee's paycheck total, the payout, at whatever time interval, will be accurate and traceable. The same criteria are used for benefit calculations, which means even if there is an input mistake, it's easy to correct.
Leave/Vacation Planning
Do workers accumulate a set amount of PTO per period? Is vacation time accrued incrementally? Are leave/vacation formulas hard to calculate? Managers who want answers to those types of questions can use a WFM system to nail down all the raw numbers and crunch out an accurate value for each worker's exact number of earned vacation/leave hours at any time. This sort of sophisticated performance is one of the basic strengths of a typical WFM software solution.
The Benefits of Workforce Management
Accurate Overheads
A core management skill is the ability to put the right number of workers on a job at the appropriate time. The very essence of WFM processes is the ability to calculate who is needed, when they're needed, and for how long. By assigning the ideal amount of labor to a given task, managers don't waste resources. The flip side of that coin is this: WM also prevents management from assigning too few workers to a job, which can be equally as bad as over-staffing.
Defined Processes
Once a WFM system is configured properly, timely updating becomes routine and not so time-consuming. After that, managers are free to focus on more vital chores than number-crunching, data tracking and scheduling.
Improved Environment and Employee Efficiency
A serendipitous result of using WFM for companies of all sizes is employee satisfaction. When workers aren't over-burdened with tasks, and have just the right amount to do, they tend to be happier and stay on the job longer. They also become more efficient. That's why WM systems, when properly deployed, can extend the average length of service for the average worker at a company. Lower turnover is one of the more subtle benefits of workforce management tools.
Higher Levels of Customer Satisfaction
One of the other non-obvious benefits of WM strategies is happier customers. When labor is assigned at the right levels, inquiring clients won't have to wait for answers to their questions, nor will they be attended to by a bored or over-worked employee. Efficiently-run organizations are able to meet customer needs more effectively, and that's a win-win for any company that uses WFM.
Better Labor Planning
For labor-intensive industries, WM can help with the key challenge of management: labor planning. Whether faces with a huge construction project or a massive call-center effort, WM solutions ably assist management with complex labor planning chores. Some of the first WM software was created for these very challenges and focused on the "moving pieces" dilemma that so many supervisors dread on large jobs.
Optimized Time/Attendance Tracking
Finally, time and attendance tracking is what WM solutions handle best. Cloud-based log-in systems let workers seamlessly begin work at any number of company locations without having to sign a physical log book. Fraud-resistant techniques like facial-recognition eliminate an age-old concern among managers. Additionally, employees can gain limited access to data in order to plan vacations, check on overtime hours and more.
Workforce Management Delivers Multiple Advantages When Used Properly
Workforce management processes offer many benefits to companies that implement them. Not only do managers see an overall boost in efficiency and labor usage, but customers come away with a better experience. When done rightly, the use of WFM solutions can maximize revenues, help create loyal customers and allow managers to rest easy, knowing that they have minimized costs, optimized resources and given their clients more value.
