5 Measures for Workforce Management Software Success

Assessing Workforce Management Software Performance

A common technology solution for factories, warehouses, distribution centers and call centers, workforce management software (WMS) is also finding its way into any organization with a large body of employees whose time in the workplace requires scheduling, monitoring and recording. However, just as workforce management software is "sliding into the trough" of Gartner's 2011 Hype Cycle for Human Capital Management Software (in other words, the inflated hype is over), and once the excitement of the implementation project fades, the question of evaluation remains (i.e. is the software delivering the promised benefits?). Ideally, the means to assess the application's performance will include baseline metrics laid out in the original business case and leveraged heavily during the workforce management software selection process. In any case, by measuring the following workforce management software benefits, an indication of initial success can be established.

Workforce Management Software Measure #1: Reduced costs

The vogue for outsourcing overseas to take advantage of lower costs of living is declining as labor costs in countries such as India and China grow by 25% annually (source: IDC). As a result, organizations are still feeling immense pressure to optimize their workforce management in order to realize cost savings in a still-troubled global economy. With the potential to reduce overpayments, overtime, and over- and under-scheduling, a WMS application's impact should be clearly measurable in budgetary terms. As Gartner's Jim Holincheck cites, "Cost savings come from schedule optimization, improved payroll and billing accuracy, reduced 'buddy punching', overtime costs and leave liability." As a recent example of what is possible, in January 2012, Catholic Health Partners received a Leadership Award from Ventana Research for its implementation of a Kronos workforce management solution that resulted in $13.5M in labor cost savings.

Workforce Management Software Measure #2: Improved productivity

WMS-enhanced productivity is delivered two-fold. First, better scheduling and competence tracking puts the right people in the right place at the right time with skill levels that can be aligned to the right tasks—thereby providing new efficiencies of tasks allocation and management. Secondly, by automating time-expensive manual processes (such as a paper-based clock card system) the administrative burden is lightened, freeing up employee resources for more productive work. Furthermore, improved analytic capabilities can provide C-level decision-makers with a more detailed insight into the impact the workforce is having on the business. An IDC 2011 paper on workforce management software in the pharmaceutical sector confirms that proposition; stating that, "Many companies are leaning on their workforce management software's analytical capabilities to track manufacturing plant employee productivity. This helps companies get a better understanding of their true cost of labor per product manufactured in order to improve intelligence around how plant resources ultimately impact gross margin." Such data enables organizations to adjust pricing, optimize procedures, and feed that information back into the scheduling process, thus improving overall productivity.

Workforce Management Software Measure #3: Minimized compliance risk

Automating compliance with regulations is a significant WMS benefit, notably in the U.S. with state and federal labor laws including COBRA, HIPAA, and FMLA. Jim Holincheck of Gartner notes, "workforce management software can reduce the compliance risks associated with collective bargaining agreements and the ever-increasing number of government regulations that affect labor and employment". The centralized administration offered by WMS systems and the tracking of relevant regulatory provisions according to location and even individual employee should provide measurable reduction in compliance errors.

Workforce Management Software Measure #4: More effective management

By accessing real-time information via the WMS, the distance between central/head office, manager, employee, and activity is reduced. In fact, according to TEC (Technology Evaluation Centers), the cost of communications in such cases can be reduced by up to 40%. In addition, an impact should be felt by employees in a more consistent application of company policy in the handling of leave, breaks, lunches, and hiring of temporary labor. Such benefits should not only contribute to bottom line productivity and cost reductions but also show up in more positive employee survey results, reflecting the closer links between management and workforce engagement.

Workforce Management Software Measure #5: Information integration

The background to a 2010 IDC case study notes that in general terms, "Workforce management data often resides in information silos (e.g. HR management software, enterprise resource planning [ERP], or other systems) with little or no real-time integration. As a result, workforce management processes at many organizations are often delayed and prone to errors, which can result in costly validation efforts, unmanaged employee absences, inaccurate or late payroll, and a general lack of management oversight, visibility, and control." An organization that opts for closer integration of its various business intelligence systems can break down these information silos and benefit from more accurate and detailed predictive analytics which can be used to navigate future scenarios with a real impact on productivity and profitability.

Workforce Management Success – The Bottom Line

TEC points out that, "More than ever, the current economy highlights the need for organizations to more effectively manage their workforce assets. Despite record unemployment figures around the world, labor costs remain the largest controllable expense for most organizations". In these times in particular, successfully implementing a workforce management software system can provide that necessary control, but on-going monitoring is imperative. The bottom line in assessing whether a workforce management software solution has been successful is to have a clear (and measurable) picture of the desired future state; adjusting and improving the system as necessary and leveraging the WMS application to facilitate a continuous process of business improvement. Using the key benefits outlined above as a basis to formulate appropriate metrics will ensure the best possible return on investment in the new software.

  Categories: Workforce Management Systems

  Tags: Workforce Management Software

  Permalink: www.hrlab.com/workforce-management-software-metrics.php

 Author: Dave Foxall

  Share: