What Is Workforce Management?
Workforce management (WFM) is a set of processes meant to increase the productivity of a company’s employees. Companies employ WFM systems on a number of levels (individual, departmental, company-wide) and for a variety of reasons ranging from hiring and scheduling to payroll. Essentially, WFM is an integrated strategy designed to streamline internal processes so that employees can dedicate more time to their actual work (and spend less time filling out forms, completing items for disaggregated internal teams, requesting information, etc.). WFM also aims to standardize these processes across departments, rather than doing work through siloed teams all working with different systems.
WFM systems can help your company accomplish a number of different goals, but there is no single, blanket strategy to ensure success. Instead, companies can apply specific policies and programs that fit their needs, and maintain use of any current systems that are already productive. Think of WFM as a series of efficiency programs that you can select and implement within your company to help you organize and manage all aspects of employee relations.
Companies began turning attention to WFM in the 1980s to streamline internal processes. However, the focus on WFM through the 1990s was mostly on supply chain and other to-market pipelines, and never gained much traction with other employee administration teams (or the workers themselves). Today, WFM is experiencing a resurgence in popularity as it has expanded to include many human resources (HR) activities, as well as labor, budget, and succession forecasting. Later on, we’ll talk to experts on why this trend is occurring now. First, let’s delve deeper into WFM itself.
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What Does Workforce Management Encompass?
As mentioned, workforce management can be applied to a large range of employee programs. WFM systems most commonly apply to aspects of HR administration, and are used to simplify and streamline data intake. This creates a more efficient system that can reduce redundancies, resolve discrepancies, and save time. Below is a list of common task-based categories that are part of WFM:
- Scheduling: For hourly workers, a WFM system can be used as a schedule builder.
- Absence/leave: Employees and HR work together to request and approve time off.
- Time clocks: Many WFM systems make clocking in and out even easier to ensure that there are no discrepancies.
- Payroll: Simplify payroll by having all employees’ work and direct deposit information in one central place.
- Benefits: Stay on top of raises, bonuses, and other benefits without consulting multiple sources or databases.
- Onboarding tasks: Employees can complete new hire paperwork and other onboarding tasks, and HR can track status of these items in the same hub.
More recently, WFM has expanded beyond these tangible task items into an arena called “workforce tracking,” which monitors data over time (rather than a singular input or output). Some examples of this type of work include:
- Demand forecasting: Look ahead to gaps or changes in staffing so you can start reaching out to potential replacements.
- Labor budgeting: Plan for new projects, or assess employee/team bandwidth to make sure you’re always staffed to meet your growth needs.
- Performance monitoring: Track performance details about your employees (this will help you make predictions about other staffing areas).
- Employee skill matching: Identify the skill sets of applicants or current employees so you can place them where they’ll be the most valuable.
- Asset tracking: Keep track of company resources that move among departments or teams.
While WFM typically includes internal resource management listed above, it can also extend to other aspects such as supply chain management (SCM), workforce asset management (WAM), production planning services (PPS), or field service management (FSM). Your WFM system does not need to include all facets of business; however, if you are implementing efficiency systems in these areas, it can be helpful to standardize them under your WFM umbrella for consistency’s sake.
Whatever realms of work you choose to apply to your WFM system, the goal will remain the same: to streamline and standardize internal processes to maximize productivity. In successful cases, WFM systems will function as a task management tool to help you reduce risk, meet compliance, increase workforce mobility and agility, raise retention rates, and ultimately become a more efficient internal team.
Explaining the Recent Popularity of Workforce Management
Although the concept of WFM began in the 1980s and continued forming in the 1990s, it never enjoyed much popularity - until recently. We wanted to understand what prompted this rise in popularity, so we talked to a couple experts in the project management field.
On the other hand, Hiller says, “Companies that choose to ignore its importance will see a negative impact in a number of areas including employee engagement, retention, and ultimately their bottom line.”
Hiller also cited a recent study by The Workforce Institute at Kronos Incorporated and Coleman Parkes Research. The study found that US Businesses waste $687 billion each year on unnecessary administrative tasks - this is where WFM (and WFM software) comes in. “Many of the tasks … can be automated, or at least made more efficient, by effectively using technology,” Hiller says. “And that technology has become increasingly more user-friendly, making it more accessible than ever for teams of all sizes.”
According to Hiller, technology is largely responsible for generating new interest around WFM. By automating administrative programs and easing the use of old systems, employees are finding it easier to track their internal data.
“The availability and affordability of new technologies that track workforce KSA and link it to business strategy and forecast led to easier access to WFM thus, increased popularity.”“The availability and affordability of new technologies that track workforce KSA and link it to business strategy and forecast led to easier access to WFM thus, increased popularity.”
Flores also cites the demographic changes such as the aging workforce, the rise of the “Gig Market,” and the rise of freelance workers (among other things) as reasons for companies to adopt new systems of organization. “Businesses have to rethink their approaches to employment and training - [and] stop being reactive,” she says.
Finally, WFM software makes data and metrics more available, so administrators have an easier time tracking resources. “WFM can lead to better talent management, more effective recruitment and retention, cost optimum service delivery, enhanced workforce agility, and above all else, improved shareholder value,” says Flores. Additionally, data makes it easier to measure the effectiveness of your WFM system.
Looking forward, Hiller is confident that WFM will remain a hot topic. “WFM software is here to stay and will continue to be a bigger focus in the coming years for all companies,” he says. “Companies that recognize that their human capital is just as important as any inventory or product they produce will see positive results across their organization.”
Flores agrees, but urges leadership and senior HR professionals to learn the “strategic” part of WFM. “Most organizations still lack an in-depth understanding of what WFM actually is, of how it links to the business strategy and how to use the tools or technology,” she says. “Building a skilled, motivated, accessible and efficiently deployed workforce, with a strategy that is aligned with the business, will increasingly be a key differentiator of business performance and financial success.”
Benefits of Workforce Management Software
While you can certainly design a system from scratch, there are many comprehensive WFM platforms that will enable you to automatically integrate your systems and manage them cross-functionally. The key in software-driven WFM is optimization, meaning that you are taking full advantage of the software efficiencies, rather than relying on clunky systems, multiple records, or slowly-evolving processes. Below is an additional list of the main benefits afforded by WFM software:
- Visibility: Gain at-a-glance insight into your processes and resources.
- Automation: Look for systems that will automate certain processes for you, reducing time spent on manual updates.
- Scheduling algorithms: Since a large part of WFM is scheduling, algorithms will save you time and frustration dedicating resources.
- Scalability: Most WFM software is designed for growing businesses, so your internal processes can stay organized as you evolve.
- Real-time evaluation: Don’t wait for quarter-end to evaluate your workers - monitor performance in real time so you can more accurately predict demand and keep hiring moving forward.
These are just some of the many benefits that a successful WFM program will afford your team. In selecting a product, keep your business needs in mind (and look ahead to the future) in order to select the tool that’s best for you.
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