The advantages of workforce management
Marcello Sambartolo, November 05, 2014
It’s no secret: employees are expensive. The Human Capital Management Institute calculated the sum of employee salaries, hourly wages, overtime and indirect compensation at 70% of an organisation’s total operating costs - a figure that has risen every year since 2005.
And consider this: research firms such as IMS Research and Gartner estimate that between 1.5% and 3% of spending on enterprise software solutions is dedicated to workforce management.
What does it mean that the very systems designed to improve workforce utilisation, to reduce labour expense and to curb absences and other inefficiencies, occupy such a narrow slice of many organisations’ technology budgets? It suggests that most organisations have not yet tapped the potential of comprehensive workforce management. In short, it means most companies have a massive opportunity to significantly – and sustainably – improve business performance.
As firms prioritise IT spending for the coming years, workforce management should be near the top of the list due to its central role in achieving the following goals:
Automating employee time and pay calculations eliminates errors and ensures that even the most complex pay rules are implemented with precision and ease. In addition, a complete view of workforce utilisation helps organisations schedule more effectively and adjust staffing levels as conditions demand. These improvements can dramatically reduce labour cost averages. Research from Aberdeen Group shows that organisations with optimised workforce management spend 33% less on unplanned overtime.
Increasing operational agility and productivity
With an automated approach to workforce management, more data and context can be put in managers’ hands, creating better decisions. Being able to assign the right people, with the right skills, at the right time, and at the right cost directly supports an organisation’s ability to respond to fluctuating production goals without compromising quality. Aberdeen group's research indicates that organisations using automated staff scheduling solutions have a 4% higher workforce utilisation on average – an edge that creates substantial productivity gains.
Reducing financial and non-compliance risks
Particularly for large organisations, compliance obligations extend well beyond national laws. You must also adhere to local ordinances, union rules, individual employment contracts and company policies. Gaps in compliance – and even a lack of transparent compliance records – can lead to costly errors. A robust workforce management solution enables organisations to quickly and easily demonstrate compliance, mitigating non-compliance risks and their associated costs.
Improving customer satisfaction
There is a direct correlation between optimising workforce efficiency and customer satisfaction. According to Aberdeen Group, organisations that are achieving best-in-class performance in workforce optimisation are achieving an '18% year-over-year improvement in customer satisfaction, versus 9% for all other companies'. Efficient workforce management helps to advance brand equity, another component of sustainable growth.
Improving employee morale
Similarly, automated workforce management improves employee morale and engagement through increased transparency and manager-employee communication. The same Aberdeen Group research brief reports that organisations achieving best-in-class performance in workforce optimisation realise an '11% year-over-year improvement in employee satisfaction, versus 2% for all others'.
Implementing a unified workforce management solution helps organisations cut labour costs, streamline compliance and empower workers to make better point-in-time decisions to support business goals. Automating your time, scheduling and absence functions also yields a more detailed view of labour costs and activities, which often helps organisations uncover new ways to sustainably improve performance.
Marcello Sambartolo is the UK marketing manager at WorkForce Software