Workforce management (WFM): definition, benefits and best practices
The term “workforce management” is often used to describe how to schedule your team efficiently.
But there’s more to it than just that.
Used effectively, workforce management (WFM) can also help streamline your processes, maximise productivity, reduce operational costs, increase profits, minimise compliance risks, and contribute to higher staff morale.
Read on to discover:
what workforce management is and why it’s important for your business.
the benefits of using a workforce management system
the main processes and best practices of workforce management.
What is workforce management?
Workforce management (WFM) refers to all the tasks involved in running an efficient and engaged team.
forecasting staffing levels
balancing employee skills mix
scheduling and rostering staff
complying with legal requirements
tracking time and attendance
maintaining accurate payroll
The 3 main goals of a workforce management strategy are to:
maximise workplace efficiency
engage your employees
comply with legal obligations.
Workforce management software can help businesses adapt, change, and streamline their processes.
Workforce management vs. human resource management
Although human resource management (HRM) is a subset of workforce management, they are different.
HRM primarily focuses on core administrative HR functions such as maintaining employee records and administering benefits. It includes the strategies and processes organisations use to acquire, train, and retain their employees.
WFM is more encompassing. For instance, as well as hiring the right people, it also covers improving employee performance, managing payroll, and forecasting work. It also touches on more specialised areas like performance management and employee training or upskilling.
Why is workforce management important?
Workforce management is about getting the right mix of employees in the right place at the right time.
Depending on the size and nature of your business, forecasting, scheduling, and assigning employees can be challenging.
But when used effectively, workforce management can increase employee productivity, reduce operational costs, and ensure you comply with industry regulations.
Furthermore, it can ensure the safety of employees and customers. For example, you can comply with capacity restrictions and trace contacts.
Even though more employees work from home now, workforce management helps measure time off through sickness and annual leave and provides a feedback mechanism for employees and managers working remotely.
What is a workforce management system?
A workforce management system helps businesses automate and streamline their processes and get insights into their operations and relevant metrics.
It manages tasks, schedules work hours, controls costs, increases productivity, and measures output.
Core functions of a WFM system
onboard new employees and get them up-to-speed quickly
reduce data errors and lost paperwork by collecting and storing employee information digitally
notify managers when employees complete their onboarding.
ensure the right mix of skills, qualifications, and labour costs for each shift to comply with employment agreements and legal requirements
use automation tools to speed up the process
receive alerts about overlapping shifts, conflicts and breaches of rules before staff start work
alert employees to roster changes with push notifications.
3. Time tracking
capture and track employee time and attendance on mobile apps
manage timesheets and approvals with geotagging and photo capture to ensure the right person is in the right place.
automatically import timesheets into payroll for seamless error-free processing
sync time tracking with payroll for accurate data processing and reporting
enable managers, employees, and the payroll team to manage leave requests from start-to-finish transparently.
track the budget for each business location and automatically calculate costs to see the value of each rostered shift
include budgeted sales in your roster budgets to achieve your sales outcomes and keep track of roster costs ahead of time
check how your teams perform across hours worked, labour costs, sales, and efficiency in a central dashboard.
Benefits of effective workforce management
From increased profits to higher staff morale, effective workforce management can benefit your organisation and employees tremendously.
WFM ensures you get the right people to do the right tasks, at the right time, and in the right place. As a result, you’ll likely see increased profits and productivity within your organisation.
WFM software simplifies the onboarding process for new employees and gets them up to speed quickly.
WFM maximises productivity by forecasting workload, delegating tasks, tracking time, paying fairly, and communicating performance.
Reduced errors and accidents
WFM ensures the right mix of skills and experience for every shift so that you minimise the risk of errors and accidents.
Higher customer satisfaction
WFM empowers people with the knowledge they need to perform their work faster. As a result, you’ll increase your customer satisfaction.
Lower labour costs
With WFM tracking and insights, you can analyse the current staffing levels in your organisation to maximise resources and lower labour costs while maintaining the quality of the work.
Higher employee morale
WFM can help improve the overall working environment for your team and contribute to higher employee morale by balancing workload, automating rosters, and processing payroll correctly.
Reduced legal compliance risks
WFM systems help you comply with national, local, industry, and union regulations so that you can operate legally.
What are the main workforce management processes?
Workforce management processes monitor employee activities to improve the overall company performance. Here are the primary workforce management processes you need to know.
Data collection and analysis
WFM allows you to gather data so that you can analyse your company performance and compare your staff productivity levels.
For example, you can track the time spent working, so you can make accurate workload forecasts, hire new employees when required, and schedule and delegate tasks better.
Forecasting and budgeting
Forecasting is crucial for long-term planning and achieving company goals. You can use it to make predictions about future workload and staffing requirements. As well as forecasting optimal schedules and staffing levels, WFM also enables scenario planning so that you can adjust budgets.
WFM data also helps you predict when to expand your workforce. For example, if your current staff is spending too much time on their tasks, and maybe even missing deadlines, you may need to recruit more people to meet demand.
Scheduling and timekeeping
WFM combines information on availability, skills, and eligibility with forecasts and historical trends to determine scheduling and staffing levels.
WFM also tracks timekeeping – usually with software to clock employees in and out by scanning a badge or entering a code – and flags missed punches, skipped breaks or late arrivals. Plus, it’s also useful for contact tracing so you can see where and who employees interacted with.
By setting goals and including employees in the performance review process, you can keep them engaged. WFM enables you to consolidate disparate data in one place so that you and your employees can access reports about time worked, training completed, and goals met.
Payroll and benefits administration
WFM platforms allow you to accurately report hours worked and time off so that payroll is accurate. They also manage benefits administration, such as health plan benefits, so that you can monitor employee enrollment status, pricing, and eligibility.
WFM ensures compliance with national, local, and union labour laws for breaks, payment, time-off policies and more. You can also track compliance with your own workplace or labour policies.
WFM software allows employees to track and request time off. If the leave request meets specific rules in the system, it can enable automated approval, or if not, it can alert the manager. For example, if too many people in the same department requested time off simultaneously.
Employees can also swap shifts on their own, giving them greater autonomy and reducing absenteeism as a result.
Workforce management best practices
Follow these 9 best practices for successful workforce management.
Get executive buy-in
Before you start, ensure you get executive buy-in across the organisation. Data-based workforce management won’t work if leaders still base all decisions on gut instinct rather than data.
Hire a workforce manager
A workforce manager is responsible for forecasting staff requirements, scheduling teams, and monitoring the performance of employees. They’ll also analyse data to spot trends, detect problems, identify opportunities for efficiency gains, and report to senior management.
Collect the right data
Traditional workforce management uses historical data to predict future patterns. And the more data the system has to work with, the more accurate those predictions will be.
For example, you could combine time log data with actual sales data from your point-of-sale (POS) system to optimise staffing schedules and reduce operating costs.
Look at your current workforce
It’s essential to analyse staffing requirements to compare the current workforce, projected employee turnover, and the number of staff required in the future.
The analysis also needs to drill down and identify employees by skill set (including any specialised training or certifications required), so you can map it against expected capacity requirements and projected production levels.
Understand your need for elasticity
For accurate planning, workforce management analysts must be familiar with their business’s cyclical pattern of workforce requirements and aware of any impending disruptions.
For example, companies need to quickly scale up or down in the hospitality and construction industries. This need for elasticity could be due to expected seasonal changes, uncertainty regarding future sales volumes, or potential disruptions.
Enable employee self-service
Advanced workforce management software includes automated time capture and self-service time reporting, giving employees the ability and autonomy to view, accept, and swap shifts from their mobile devices.
It can also display detailed analytics and use artificial intelligence (AI) to forecast and suggest staffing levels, which managers can then adjust accordingly.
Train your employees
It’s essential to train your employees properly, taking their roles and responsibilities into account. For example, you could customise the training content to fit different roles, such as using daily short bursts rather than week-long courses.
Analyse the data and adjust
Analysing the workforce data is one thing. But it’s equally important you can adapt and change as tactical and strategic priorities shift. With the help of flexible planning tools, you can collaborate with stakeholders across the organisation and adjust your plans accordingly.
Invest in workforce management software
Finally, it’s crucial to invest in the right workforce management software to make the entire process run smoothly. Different departments will have various requirements. For example:
C-level execs need analytics and reports that include employer taxes, benefits, and other non-wage expenses
HR needs guaranteed privacy and security of confidential employee data
Analysts require 24/7 access to critical information about compensation and employee performance.
Overall, the software must be capable of achieving your company goals in a secure and robust environment.
Improve workforce management with MYOB
MYOB’s workforce management software brings onboarding, rostering, time tracking, payroll, and budgeting together in one seamless solution.
You can onboard new employees quickly and add them to your roster to ensure you get the right mix of qualifications, skills, and costs for each shift. Even better, you can use the Smart Roster automation functionality to save your time creating compliant rosters.
Capturing time is a cinch as employees can clock in and out on their personal devices at any time. Plus, managers can track and approve timesheets using the tablet clock-in functionality, and then let the software sync with payroll to generate correct pay runs every time.
If you want to see how you can streamline your workforce management processes, speak to an MYOB expert today.
Everything you need to know about employee onboarding
12 steps to effective staff rostering
Everything you need to know about annual leave in Australia