Workforce Management: The Essential Guide

To remain competitive in your industry, you need to unlock the full potential of your employees. Effective workforce management requires a strategic approach encompassing both tools and methodologies. Although traditional methods proved highly effective before COVID-19, recent market changes have diminished their relevance. We are experiencing demographic shifts, generational turnover, significant staffing shortages, and continuous wage increase demands. These factors make manual processes both time-consuming and inefficient, thereby increasing costs.

The HR industry has long resisted the digital revolution by clinging to conventional platform tools. Although data analytics has indeed developed and revolutionized many aspects of business operations, there is still room for improvement in  HR management. AI/ML technology promises to bridge this gap in HR management by leveraging data more effectively.

This guide will clearly explain how innovative solutions not only integrate into existing workforce management processes but also enhance their speed, flexibility, and efficiency.

The Key to Business Success: Mastering Workforce Management Processes

Natalie Calvert in her book “Gower Handbook of Call and Contact Centre Management” defines workforce management as:

“The term usually used to differentiate between the basic practice of scheduling staff, and using an integrated set of tools and processes to cover all aspects of managing staff.”

Hiring employees and assigning them tasks falls short; you also need to handle the whole process behind the scenes to succeed. As Arun Kumar and Priyadarshan Singh summarize in their publication – “Workforce Management Practices: Evolution through Ages”, when it comes to managing a workforce, this involves:

1. Designing jobs,
2. Talent acquisition,
3. Administration of workforce (work and culture discipline),
4. Forecasting and scheduling,
5. Time, attendance and absence management,
6. Compensation and benefits,
7. Performance management,
8. Career and succession planning,
9. Learning and training management,
10. Analysis of work.

Quite a few processes, right? That’s why running a business without the help of technology is no longer feasible. Researchers Jorge Amar, Sohrab Rahimi, Nicolai von Bismarck, and Akshar Wunnava from McKinsey & Company state:

“Traditional workforce management processes, which rely heavily on time-consuming and inconsistent manual steps, can no longer provide the dynamic workforce scheduling needed in the face of ongoing labor market disruptions.”

These conditions demonstrate that markets are unstable, susceptible to shocks (e.g., COVID-19 has impacted all industries), and, as researchers from Harvard Business School note, they are undergoing significant demographic changes:

“Boomers are aging out of the workforce, and Millennials and Gen Z are taking over, bringing with them very different priorities about who should do what work – and where, when, and how it should get done.”

Automating processes to improve the profitability of operations and avoid resource wastage is a natural course of action.

The question then arises: how can one master these processes? Given this complexity, what if each process requires a different tool or set of tools? This raises the question of whether companies must maintain a multitude of applications. And what if data flow between them gets disrupted due to failed integration?

From Data to Decisions: The Power of Workforce Management Tools

We recognize that many organizations utilize basic workforce management tools, from time-tracking applications to spreadsheets for payroll management. Yet, to avoid obsolescence, embracing advanced technology is imperative.

Modern Workforce Management Systems offer holistic solutions that streamline various HR functions and mitigate information overload. This discussion explores ten key components of Workforce Management that can be enhanced through technologically advanced solutions, ensuring your organization remains competitive and adaptive.

1. Shaping Modern Work Environment: The Role of Job Design

According to research conducted by Hay Group:

“Highly engaged employees are 10% more likely to exceed performance expectations. However, if we look at organizations where engagement levels are also high, employees are 50% more likely to exceed performance expectations.”

Creating a modern environment that cares for maintaining employee engagement in various ways is fundamental to a company’s success, regardless of the industry in which it operates. Can your existing tools do that?

WFM tools enable employers to create a work environment that’s tailored to global employment trends – flexible, agile, and focused on achieving goals.

• They support remote or hybrid work and help manage work schedules to meet both business needs and employee preferences.
• They improve communication and collaboration between teams, regardless of their physical location, by ensuring smooth information flow in real-time and managing tasks and performance monitoring.
• They increase employee satisfaction by promoting a sense of belonging and recognition, utilizing gamification with point systems (XP), rewards, and challenges.
• They facilitate compliance with labor laws (including federal labor laws) and reduce compliance risk, for example, by generating alerts when there are compliance violations in employees’ schedules.

2. Talent Acquisition: Recovering Time Recruiters Used to Lose

Talent acquisition is one of the core HR functions responsible for finding and hiring new employees. Workforce Management, on the other hand, allows for identifying the precise mix of talents required to meet an organization’s future goals.

A report developed by the Boston Consulting Group (BCG) and the World Federation of People Management Associations (WFPMA) reveals that individuals in charge of Talent Acquisition within companies often have limited or no role in strategic workforce planning. This was indicated by 26% of respondents. When these respondents were asked to rate their organization’s workforce planning capabilities on a scale from 1 to 5 – with 5 being the highest – 58% rated their organization as a 1 or a 2, while none awarded their organization a 5. Such findings are discouraging, especially considering that those responsible for Talent Acquisition have a profound understanding of the job market, which could significantly enhance workforce management efforts.

“By more closely integrating these functions, organizations will better achieve the talent goals required to fulfill their business strategies.”

Workforce Management software helps organizations streamline the recruitment and talent acquisition process.

• They free recruiters from numerous administrative tasks and offer features such as Applicant Tracking, credential verification, and an internal talent marketplace for effectively filling vacancies.
• They use AI and Machine Learning algorithms to match candidates’ skills with roles. Each selection can be performed by a trained bot, and after two minutes of evaluation, you have a new employee perfectly matched to the organization’s needs.
• They facilitate the maintenance of Human Resources compliance with regulatory standards.
• They compile candidate data into a useful database.

3. Administration of the Workforce: Fostering a Positive Work Culture

An unhealthy workplace culture can detrimentally affect an employee’s wellbeing. Additionally, it can severely influence the organization’s financial performance, resulting in decreased workforce productivity and elevated employee turnover. Michael McCarthy, an instructor at the Harvard Division of Continuing Education, states:

“Workplace culture is not just about sticking a list of values on a wall in the break room and then going about your day. It’s a commitment that every person in the organization, including senior leadership, must model their behavior to support those values. The idea of letting harmful or hurtful behavior slide is not acceptable in organizations that truly embody a healthy workplace.”

And he is absolutely right! Thanks to WFM solutions, caring for workplace culture is much easier.

Workforce Management systems help cultivate a positive organizational culture and maintain healthy discipline within the team.

• They offer survey and employee feedback features, allowing employees to express their opinions and concerns. This open line of communication promotes a culture of transparency and mutual respect.
• They strengthen the frontline culture with an inbuilt social network, career milestone and achievement recognition, or commenting options. This approach helps acknowledge and reward employees for their hard work and adherence to company values, thereby boosting morale and encouraging a positive work ethic.
• They assist in aligning workforce planning with employee needs and preferences, promoting a better work-life balance that enhances overall satisfaction and engagement in achieving company goals.
• They can be used to communicate and reinforce the values and cultural norms of an organization, ensuring that all employees understand and adhere to the desired culture.
• They enable regular review of key performance indicators, allowing you to quickly identify areas requiring improvement and, if necessary, discipline employees.

4. Forecasting and Scheduling: Accurate Predictions and Optimal Schedules

In times when work is divided among teams with different specializations, working in various locations, and the outcomes of one team serve as input for others, each team must adhere to forecasts and schedules to achieve efficiency.

The following graphic illustrates the effect of alterations in shift lengths and start times on the productivity and service levels of a specific group of employees.

Source: https://www.mckinsey.com/

According to McKinsey & Company:

“While outsourcing and lean management can improve the efficiency of the existing workforce, managers need additional tools to meet this challenge. Using workforce management techniques to increase flexibility is a quick, effective lever that they should be more willing to embrace. Even a relatively small amount of increased flexibility, if supported by the right infrastructure and tools, can be an effective way to deliver significant savings without sacrificing service levels or customer satisfaction.”

AI-powered Workforce Management tools provide accurate forecasts, drawing on historical trends and various planning factors.

• They ensure automated scheduling, compliant with legal regulations and union agreements.
• They optimize rosters across locations and teams in real time, saving payroll expense and offering greater employee flexibility.
• They allow staying informed with geotagging and real-time monitoring capabilities.
• They enable employee self-service in terms of shift swapping and dynamic scheduling.

5. Time Management, Attendance, and Absences

McKinsey & Company clearly recognizes that:

“AI-driven tools offer optimal solutions for a range of interdependent constraints and changing demand.”

With time management features, attendance tracking, and effective absence management, WFM solutions maximize team productivity and allow for better control of a company’s operational costs and administrative costs.

• They enable accurate time tracking of employee work hours and reduce paid time wastage (mobile clocking with geofencing, QR codes and advanced anti-time fraude algos, ghost busting).
• They allow for enjoying automated scheduling, leave management, and substitutions.
• They generate schedules considering staffing levels, employee availability, and their time off requests.

6. Compensation and Benefits Administration

In their article for the Harvard Business Review, Catherine Collinson and Michael Hodin emphasize:

“In today’s tight labor market, a competitive benefits package can help an employer recruit and retain talent. (…) By adopting best practices and addressing the needs of employees across the age spectrum, employers can help their employees thrive and, at the same time, improve their own business results, strengthen talent recruitment and retention, and pave the way for future generations.”

Efficient management of compensation and benefits is incredibly significant from an employee’s perspective. Everyone expects their paycheck to be accurately calculated based on the hours they’ve worked. Any errors in calculation can negatively impact an employer’s reputation and, over the long term, may decrease employee engagement. Fortunately, Workforce Management (WFM) solutions effectively address these issues.

• They ensure Human Resources compliance with regulatory standards.
• They offer Early Wage Access (EWA) technology, giving employees the flexibility to choose when they receive their salary.

7. Employee Performance Management

In the OMES Human Capital Management publication, it states:

“Performance management is a communication process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to the organization.”

Workforce Management (WFM) tools facilitate performance management in several ways:

• They allow managers to set, track, and update performance goals for teams and individual employees, aligning them with the organization’s objectives.
• They can provide real-time feedback to employees on their performance, helping them understand their progress towards goals and areas needing improvement.
• They often come with analytics capabilities that enable managers to analyze performance trends, identify high performers, and recognize areas where additional training or support may be needed.
• By mapping out skills and competencies required for each role, WFM software helps ensure employees are well-suited for their tasks and identify gaps in skills for future training opportunities.
• They can streamline the performance review process by automating the collection of performance data and facilitating more objective, data-driven evaluations.
• They provide platforms for more effective communication between employees and managers, enabling regular check-ins, feedback sessions, and discussions on performance and development.

Some WFM tools also include features for recognizing and rewarding employees based on their performance, which can motivate and engage the workforce.

8. Career and Succession Planning

Researchers J. Yo-Jud Cheng, Boris Groysberg, and Paul Healy, who conducted a global survey about succession planning in 2015-2016, emphasize:

“It takes more than one person at the top to manage a crisis situation. When formulating a succession plan, look at the rest of the top team and the board. Are there back-up plans in place for all individuals in critical roles? This is a time for management and board directors to be aligned, cohesive, strong, and supporting each other both personally and professionally.”

There are several ways in which Workforce Management solutions can support career and succession planning:

• They can analyze historical data related to work performance, helping to identify high-performing employees and those with the potential for promotion.
• They also help identify skill gaps among current employees, enabling the planning of training and development to prepare them for future roles.
• They allow for the visualization of potential career paths and can help employees understand how they can develop within the organization.
• They enable the identification of critical roles in the organization and potential candidates to fill them.
• They support talent management, helping to maintain operational continuity and minimize risk for the business.
• They enable the monitoring of employees’ progress in achieving their individual development plans.
• They facilitate regular feedback and evaluation, which are crucial for employee development and the success of succession planning.

9. Learning and Training Management

In 2022, TalentLMS and SHRM conducted a survey on the pulse of L&D from two different perspectives: employees and employers, and came to the following conclusions:

“L&D serves a dual purpose for organizations: to reskill and upskill current employees to fill business needs, and to recruit and retain talented workers who want to continuously learn. More than 8 in 10 HR managers (83%) believe training is beneficial to attract talent, and many employees (48%) agree that training opportunities were a factor in choosing their current company.”

The demand for development and learning is increasing, and WFM software aligns well with this trend as a solution that nurtures a company’s talents. Other statistics from the same report indicate:

“86 percent of HR managers believe that training is actually beneficial in retaining talent.

55 percent of workers said they need more training to perform their job more effectively, and 38 percent want training that is more relevant to their current role.

32 percent want training to have a social element, such as peer-to-peer learning and learning groups.

32 percent want to be sure what they are learning is current.”

In times when physical tasks are automated and intellectual tasks evolve into knowledge-based activities, knowledge becomes a company’s greatest asset. Learning and training are crucial for an organization’s stable development, and it’s good practice to create resources that successive employees can use. No longer just through a master-apprentice transfer, but in the form of subscriptions, readily accessible.

Workforce Management tools provide comprehensive support at every stage of this learning process within a company. Here are several ways they can do this:

• They enable the creation and management of training schedules, automating the planning process and minimizing scheduling conflicts.
• They facilitate employee enrollment in training and track their participation, allowing for easy monitoring of progress and course completion.
• They can help identify skill gaps among employees, enabling the tailoring of training programs to specific needs.
• They allow for the creation of personalized learning paths for employees, increasing training effectiveness.
• They assist in optimizing the use of training resources, reducing costs, and enhancing efficiency.
• They enable the analysis of the return on investment (ROI) for various training programs, supporting informed decision-making regarding investments.
• They support employees in planning their career development by identifying necessary training and skills to achieve professional goals.
• They ease the integration of training management with succession planning, preparing employees for future key roles.
• They aid in building a learning culture within the organization, encouraging continuous development and engagement.

10. Analysis of Work

In an article for the MIT Sloan Management Review, Don Weinstein says:

“Tapping into data to manage your people resources begins with looking at the user experience of the tools you use and the unique priorities and needs of your workforce. Those two focus areas should remain in parallel throughout the employee journey, as you work toward the goal of making your people’s lives easier and better.”

Raw workforce management data is what we value most! To maximize productivity in your company, you need access to historical data on employee performance, completed tasks, and achieved goals. For instance, if certain tasks take a long time to complete, automated workflows that track employee eligibility can help you determine if there are skill gaps in the team. Maybe you need to train your team to perform more efficiently? Analyzing the problem and its origins allows you to choose corrective measures. More streamlined processes mean a lighter workload, resulting in happier employees.

Workforce Management solutions give you full insight into all workforce data:

• They enable accurate tracking of employee work hours, which is fundamental for analyzing their productivity and efficiency.
• They help identify absence patterns that could affect productivity.
• They allow for forecasting labor demand and adjusting human resources to current operational needs.
• They facilitate optimal shift planning, guaranteeing employees working during each shift possess the necessary skills.
• They assist in identifying skills that employees may need to increase their performance and efficiency.
• They support the creation of personalized training plans that meet individual and organizational development needs.

WFM tools offer advanced reporting features that allow for in-depth analysis of work-related data. These reports can cover performance, labor costs, operational efficiency, and many other aspects.

Mobile supervisory tools empower frontline managers with insights and data to maximize their situational effectiveness. Graphical representation of data helps in easily understanding complex patterns and trends at work. Using dynamic dashboards and real-time HR analytics, you can make accurate strategic business decisions, such as resource allocation, investing in employee development, or optimizing work processes.

Choose a workforce management solution that supports creating schedules, tracking attendance data, and many other WFM processes.

Looking Ahead: Adopting the Right Workforce Management Solution

A comprehensive workforce management system offers a unified solution that simplifies and integrates multiple functions, eliminating the need for multiple, separate applications. This system enhances various aspects of workforce management efficiently and effectively.

Here’s what you gain:

• Enhanced Employee Productivity: Streamlines processes to foster a more productive work environment.
• Sustained Improvement in Employee Experience and Satisfaction: Consistently improves employee contentment and engagement, contributing to a more positive workplace.
• Robust Remote Team Collaboration: Essential for managing a geographically distributed workforce, this system enhances teamwork across distances.
• Cost and Labor Management: Delivers significant cost savings and precise control over labor expenses.
• Efficiency through Automation: Automates routine processes to save time, allowing management to focus on strengthening employee relationships.
• Compliance Assurance: Ensures adherence to legal and regulatory standards with ease.
• Data-Driven Decision-Making: Provides leaders with actionable insights and analyses to make informed business decisions.

This approach meets immediate operational needs and supports long-term strategic benefits. However, selecting a WFM system for an organization naturally involves considering various factors.

Assessment of Needs

First, assess the needs of your business. You may already have some Workforce Management (WFM) tools that you don’t want to discard. That’s fine – you might not need to if the new system can integrate with them. Alternatively, it might be more cost-effective to terminate contracts with your current provider and switch to a more comprehensive solution if the return on investment will be significantly higher.

• Consider the algorithmic technology already in use elsewhere that could be implemented in your company. Set your aspirations within a reasonable timeframe (e.g., 2–3 quarters) and evaluate the ROI from that perspective.
• Consider the internal talent that can help implement the new system – Business Analysts, Statisticians, IT specialists in algorithms and backend.
• It would be wise to conduct a workshop with key stakeholders, analyze gaps, etc., to determine what will move the needle, the costs, and the benefits.

System Functionality Assessment

In the second stage, create your own checklist of workforce management processes you want to handle with a single tool, and seek a Workforce Management solution capable of doing so. The more boxes your list checks, the more worthy the tool is of consideration. Ensure you cover issues related to personnel, work, formal organization, leadership, and culture.

Department managers who report performance issues should help co-create this list. What causes these gaps? Why do business intentions not translate into actual results? How significant and critical is this gap, and can the evaluated tool address it?

Consider User Experience

In the third stage, consider the opinions of those who will most frequently use the system. Look for a user-friendly interface, mobile access, and multilingual support. If the vendor offers a demo, allow various employees to try it out, even if briefly.

Outline an early team that will assess the solution based on previously identified needs and gaps.

Test Your Chosen Workforce Management Software

The demo presentation is a time when you can compare your expectations with the vendor’s offerings. At Movo, we respond to all customer queries, even the most challenging ones. We value transparency, so if you have any concerns, feel free to ask. Neither functionality nor pricing are taboo topics for our experts.