Think beyond the payslip: improve business results with strategic workforce management
If you ask ten people to define workforce management, you will likely receive ten different answers. Yet, the functions that comprise workforce management are well known, such as: time tracking, absence management, scheduling and labour law compliance.
So why is there widespread ambiguity around the term “workforce management”? Perhaps because the benefits of strategic workforce management are largely untapped, revealing a more compelling question: “How can I best use workforce management to my advantage?”
That question is well worth examining, but first let’s put it into context.
What’s at stake?
In essence, your budget. Employees are expensive. And while facility expenses and other overheads are usually inflexible, staffing models can easily be adjusted to meet changing needs. Yet employees are also essential. When you experience productivity increases, those gains often trace back to having the right people dedicated to your most critical tasks.
Your workforce, then, is both your largest controllable asset and your most important source of revenue creation. As a result, you should be keenly aware of questions such as:
- What are the best staffing techniques for each job, shift and location?
- Who are the top performing individuals and teams in each group?
- When are staff overburdened or underutilised?
- How do absences impact production yields?
Each of these questions relates directly to productivity or financial performance - and each is rooted in workforce management.
Creating a sustainable advantage requires more than asking the right questions. What you need is a workforce management system that provides timely answers and mechanisms for responding. Although each employer’s needs are distinct, you can often glean new learnings from the examples of others. With that in mind, let’s look at three real stories where employers used strategic workforce management to improve business outcomes.
What success can look like
Using targeted pay premiums to foster tighter collaboration and informal hierarchies among shift workers can dramatically increase productivity. This practice is utilised by a diversified manufacturer of consumer and commercial goods, globally known for storage and cooking supply brands. The company wanted to better understand which labour groups were outperforming their peers and give supervisors more tools for incenting performance. They implemented a ‘shift lead premium,’ which yielded significant returns on a modest investment.
The policy is deceptively simple: a supervisor can designate one line worker during each shift as the ‘lead,’ a temporary status that confers a greater sense of responsibility for that shift’s production level, in exchange for a slight shift premium. For the employee, this extra pay creates an additional incentive to assist peers and lead by example - boosting short-term performance enough to justify the cost.
Yet, the real benefits accrue over a longer time frame. By recording detailed work hour, activity and pay data in an automated workforce management system, and then combining it with production data, the manufacturer has given managers the insight they need to make better staffing decisions. With a simple report, supervisors can see how shifts compare in terms of meeting budget and output goals, and can immediately distinguish which teaming structures—and which team leads—produce the best results.
‘Once in a Blue Moon’ jobs
Another example comes from a local public authority that was hit by several extreme weather events. In each case, the necessary recovery work racked up substantial bills from departments such as Streets, Sewers and Parks and Recreation. During a major blizzard, employees toiled around the clock to clear roads, remove fallen tree limbs and perform other public safety duties. Many of these expenses were eligible for reimbursement by the national government, but the city was not equipped to track the associated work hours and emergency pay premiums in an automated system making it more difficult to submit accurate, timely requests for reimbursement.
When the authority later redesigned its time and labour practices, it selected a new workforce management system with limitless flexibility for allocating work hours to distinct tasks and pay rates. This flexibility enabled it to consolidate all departments into a single system and configure a full spectrum of scheduling and pay rules, including many that were previously difficult to track. As a result, the local authority can rapidly generate and send bills to outside agencies and can more quickly recover a larger share of government funding when the unexpected occurs.
A large national janitorial services company wanted to stand out from the competition. Instead of sending a rotating cast of casual employees to each client, this vendor offered to guarantee the same cleaning crew, week in and week out - at a slight premium above market rates. So when a client was impressed by gleaming aisles and a spotless entry, they could retain that particular cleaning crew on a regular basis.
However, collecting accurate time data from employees was tricky for a few reasons:
- The janitorial company could not install wall clocks at each location, nor could they use computers owned by their clients
- Turnover is high within the industry, making it difficult to justify equipping each worker with a smartphone or mobile device for self-service
- Labour costs were more than 70% of operating expenses, so sending employees to another location to clock in and out was fiscally untenable
To facilitate the accurate collection of work hour data, the janitorial services company set up voice activated phone time entry which employees could access from landlines at each location. Hours and pay rates were calculated in a cloud-based workforce management system. That data was then overlaid with customer satisfaction surveys obtained separately from those same clients. When a store recorded a high satisfaction score, the janitorial services company offered the opportunity to retain those crew members at a slight premium over market rates.
Finding your formula
These examples only scratch the surface of what you can achieve through strategic workforce management. Yet each example illustrates how the outcome amounts to much more than its component parts. Additionally, each advancement was made possible because the employer was able to collect - and easily report on - more detailed, current and reliable labour data.
Shockingly, many employers spend a pittance on workforce management software. IHS Research (formerly IMS Research) has calculated that less than 2% of enterprise software budgets are directed toward workforce management. When you consider that these tools are the linchpin of labour utilisation and cost management strategies, then we can quickly arrive at an answer to the reframed question “How can I best use workforce management to my advantage?” Start by giving your managers the right tools for the job.
 IMS Research, Workforce Management Solutions – World – 2012