What is workforce management and why is it so important? | Spica (2024)

1. What are the core workforcemanagement processes?

As mentioned, workforce management is a set ofHRM processes that help run the daily operations of an organization and keepproductivity high. These processes ensure that each employee is at theright place at the right time, and that the workforce is optimally allocated.

Workforce management starts withstaff planning and ends with timecard reports used for payroll processing andoptimizing labor productivity.

A good workforce management software solutionsupports the entire process from beginning to end, and everything that comes upin between.

With a good workforce management solution, a business can ensurethat:

• Shiftsare scheduled optimally, without overscheduling unnecessarily.
• Employeesget paid for their actual workhours, based on accurate timesheets.
• Employeesor freelancers don’t abuse working from remote locations.
• Absencesare minimized and deviations on individual or team levels are avoided.
• Overtimecosts stay under control.
• Workforcemanagement processes are digitalized and optimized, ensuring valuable workinghours aren’t wasted on inefficient administration.

Now let’s look at the main processesthat fall under workforce management in greater detail.

1.1 Workforce(staff) scheduling

All effective workforce management starts with goodstaff scheduling and shift management. With the workforce scheduling feature, managers can easily plan andschedule the work of their teams.

The main priority of workforce scheduling is tohave the appropriate number of employees with the proper qualifications in theright place and at the right time. In other words, it’s a matter ofdeploying the right number of suitably qualified workers exactly where and whenthey are needed.

Workforce scheduling helps with the appropriatedeployment of individual and rotating shifts, creating overviews, taking intoaccount daily attendance checks and annual vacation planning, supports theanalysis of deployment and vacation times, along with creating duty rosters foreach individual employee.

A workforce management solution thatcomes with staff scheduling usually supports the following:

• Schedulingtemplates for the organization of work hours
• Thesharing of schedules with the entire team
• Extrapolationof time accounts based on the created schedules
• Anoverview of the covered requirements based on the scheduled work plan
• Managementof shift changes and automatic reminders for employees of upcoming shifts
• Laborcost forecasting
• Convenientaccess to schedules in real time via a mobile app

A modern staff scheduling approach is, ofcourse, digital. A digital solution allows you to react flexibly and quicklythrough fast, direct, and uncomplicated communication channels. In practice,that usually means staff scheduling is done on an interactive calendar.

Managerscan easily manage their workforce on the calendar while employees can seetheir assigned schedules on the web or mobile app. It’s a breeze comparedto cumbersome manual scheduling and communication.

1.2 Trackingtime & attendance

After scheduling your workforce optimally, tracking time andattendance comes next. That’s why we often separate time & attendance as amore specific concept under workforce management.

The idea of monitoring time& attendance centers on the following:

• Attendance –Having information on whether an employee is present in the company or not, andwhy. We can also add location data to attendance (office, home office, fieldsite, etc.).
• Time – Howmany hours an employee has been working - to fulfill their weekly legalobligation, to manage their overtime, to process payroll correctly, etc.

Time and attendance management enables managers to track all of thedifferent types of work their employees engage in, such as regular workhours, overtime, weekend hours and so on.

Different categories of work can alsobe connected to distinct payment types. Having accurate timesheets is one ofthe most important conditions in workforce management.

Time and attendance (and consequently timesheets) are always made basedon recorded clocking events. Clocking events can be done through the use of:

• mobilephones,
• webapps,
• timeclock terminals or
• Bluetoothbeacons.

That means a good workforcemanagement solution should support different types of clocking events so thedata can be consistently and easily tracked.

1.3 Absencetracking

The other side of attendancemanagement is absence tracking. Managing vacations and sick leave can mean a lotof additional work for managers and employees, so an important part ofworkforce management is tracking all of the different types of absences.

By accounting for different types ofwork and absences, timesheets are generated for accurate payroll processing.

An absence feature enables employees to simplyenter an absence request, and managers are automatically notified so theycan approve or deny it as easily as possible.

Absences appear on thetimeline and timesheet reports automatically. Employees can also see theirremaining vacation days using the vacation counter so they don’t need to checkwith an administrator.

With this feature, the coordination ofvacations in teams becomes much easier (Christmas, summer breaks, etc.). Youcan also avoid short staffing as digitalized absence tracking allows you to checkwho will be absent, and when, on an interactive calendar.

Identifying possiblescheduling problems without a good software solution is almost impossible.

1.4 Overtimetracking

Another important part of workforce managementis tracking overtime for the sake of keeping overtime under control, whetherit be for regulation, or to address safety and cost issues.

With digitalizedworkforce management (specifically, by implementing a good workforce managementIT solution,) managers can automatically and accurately track the overtime oftheir employees.

Employees can always see how much overtime theyhave available, so they know when it’s time to clock out. The system canautomatically deduct overtime hours over certain periods, and show these cutsin payroll exports to ensure they are tracked and compensated properly.

Theimplementation of the solution can also go a further by controlling overtimemanually, allowing managers to grant or deny particular overtime.

In thiscase, overtime is not counted automatically and instead needs specific approvalfrom the responsible manager.

1.5 Payrollprocessing

With the use of a professional workforcemanagement solution, payroll processing becomes both simpler and moreaccurate.

A professional workforce management solution should allowmanagers or administrators to export a customized report that fits thecompany’s HR or accounting needs.Furthermore, by using these software solutions, managers can avoidtime-consuming procedures and confusing timesheets.

1.6 Time& Attendance analytics

Professional workforce management should alsocome with many different kinds of reports, all of which are included under theheading of HR analytics. HR analytics help managers make better decisionsregarding their workforce.

Success lies in knowing how employees’ hours arebeing utilized, and HR analytics can provide management with core data aboutthe productivity of their employees.

HR analytics is becoming more and more prolificin data-driven companies. HR analytics can provide answers to questionsregarding the:

• number of hours worked per employee,
• accumulated overtime hours,
• outstanding vacation balances,
• the number of absences categorized by reason,
• illness by department,
• team and other departmental variables (early birds, latearrivals, and much more.)

HR reports based on clocking events helpmanagement keep productivity high and absences low. Balances, deviations, andother statistics are always on hand to help with the process.

1.7 Compliancewith labor legislation

Most countries around the world havelegislation which regulates labor and working time for employees. Thesestandards regulate minimum daily and weekly periods of rest, adequate breaks,night work, annual leave, and the maximum limit on weekly working hours.

Tomeet all these standards properly, employers must somehow track the time andattendance of their employees, and the best way to do that is to use aprofessional workforce management solution.

Let’s look at the EU as an example. TheEuropean working time directive (EWTD, passed in November 2003) regulates laborand working time for employees. Essentially, these standards regulate minimumdaily and weekly periods of rest, adequate breaks, night work, annual leave,and the maximum limit on weekly workhours.

Each European Union (EU) memberstate is obliged to draft its own federal laws and define the particulars,using the EWTD as a general guide. Some EU member states have stricterlegislation regarding some aspects of the directive while being more liberal withregard to others.

That means every employer in the EU musttrack the workhours and attendance of their employees, meet the minimumstandards defined in the EU directive, and, of course, be compliant with thefederal legislation that’s been implemented based on the directive.

Thesituation in the EU is similar to that in the US, where all businesses arerequired to track time in order to be FLSA compliant.

When talking about regulation andpersonal data, we can’t forget about GDPR. A professional workforce managementsolution must be implemented according to restrictions for data processingaccording to GDPR. These requirements apply to all companies which haveemployees working in the EU.

2. Workforce management vs. Humancapital management

An idea which complements WFM isHCM, which stands for Human capital management.

Many WFM software platformsalso offer HCM features. In addition to the previously mentioned features, HCMsolutions can also include:

• talentmanagement (talent recruiting, onboarding, development and compensation plans),
• employeeexperience surveys,
• managementtraining systems,
• performancemanagement,
• benefitsadministration,
• HRadministration management, and so on.

Whether you should go for two separate systems– WFM / HCM – or an all-in-one solution, largely depends on your needs.

Thedecision is usually based on whether you want a specialized solution thatfocuses on one particular aspect in detail, or a general solution that addressesa range of problems more superficially.

In our experience, specialized solutions thatdo one thing really well tend to provide better results. The best thing you cando is try different software solutions, and then choose the one that best fitsyour needs. Most contemporary workforce management providers offer a freetrial.

3. Workforce management of flexibleand remote workers

Because of advances in technologyand digitalization, it is no longer necessary to worry about the physicallocation (and working time, in some cases) of employees.

They’re able to worktogether with the rest of the company seamlessly from almost any part of theworld by using digital tools and devices.

You might see this referred to as aflexible work trend. Following changes brought on by COVID-19, this trend hasbecome increasingly mainstream. There are five categories for this flexibleform of work:

• Remote work: Themost popular type of flexible work is remote work, meaning employees work fromhome or other location.
• Job sharing: Jobsharing means one or more employees share the same job.
• Part-time work: Part-time work means an employee doesn’t work a full-time schedule.
• Compressed schedule: A compressed schedule means working more hours in fewer days, and havingmore days off.
• Flexitime: Flexitimemeans that the employee has no fixed schedule when they’re obligated to work.

A modernworkforce management solution should support all of the different types offlexible work.

They should enable you to track the workhours and attendance ofemployees regardless of the location, usually through the use of a mobile phonefor clocking in and out.

4. The main benefits of workforcemanagement

The fact is that technology has thepotential to be leveraged as one of the greatest productivity boosters for anyorganization. If employed correctly, technology can also be one of thebiggest drivers of innovation, productivity, and progress.

By utilizingsoftware for different business functions, such as sales (CRM), finance (ERP),operations (PM) etc., management efficiency can be greatly improved indelegating, collaborating, information flow, data integration, and so on.

Workforce management is noexception. With the use of time & attendance and project time managementtools, advanced HR analytics, and by digitalizing processes like absencemanagement, staff scheduling, and payroll processing, businesses can achievea completely new level of productivity and stay competitive on the market.

Here are many of the benefits businessesenjoy by using a modern workforce management solution, such as the one we’reoffering at Spica:

• Improvedcompany efficiency.
• Automatedpayroll resulting in fewer errors.
• Meetingcompliance standards.
• Reducedadministrative work for managers and employees.
• Improvedtransparency and accountability.
• Greatermotivation in employees thanks to a more transparent workplace.
• Betterworkforce management through taking advantage of the provided HR analytics.
• Easyclocking in with reminders and notifications.
• Moreefficient staff scheduling and absence management.
• Keepingovertime in check.
• Costefficient (subscription based) business model with no upfront investmentnecessary.
• Trackingfor all of the different types of flexible work.
• Asolution which is GDPR compliant.

The most valuable asset any business has istheir employees’ time. With global competition, heavy pressure on prices, andcosts of labor rising, businesses need to keep employee (long-term)productivity as high as possible.

In today's complex world where everyone isconstantly busy and there are always too many things to do, outstandingworkforce and time management can be what makes the difference between winnersand losers in the market.

5. Outdated vs. modern workforcemanagement solutions

Now that we know what workforcemanagement is and what a workforce management software solution does, let’slook at the difference between a modern approach to workforce management and anoutdated one.

A modern approach to workforce management consists of thethree key elements:

• Digitalizedworkforce management processes
• Cloudor hybrid workforce management solution types
• Supportfor the low touch economy

5.1 Digitalizedworkforce management processes

Digitalization and digital transformation are vast global trends,affecting organizations in all industries, no matter the size. Digitalizationmeans the use of digital technologies to raise productivity, optimizeprocesses, transform business models, providing new revenue andvalue-producing opportunities on the market.

Digital transformation, as thenext step after digitalization, means the novel use of digital technology toaccelerate business strategies.

Among all the HR processes that a workforce management solutionsupports, digitalization of time and attendance is the most important, so let’stake a closer look at this trend. There are four levelsof digitalization for time and attendance:

1. Some companies don’t track time and attendance at all.

In this case they are not compliantwith legislation and can be a subject to a fine in accordance with federallaws. Aside from that, it’s also a disaster for maintaining a high degree ofproductivity in an organization. This is the first level of time and attendancetracking, highly detrimental for the employer as well as the employees.

2. The most rudimentary outdated system for time and attendance istracking them on paper.

Businesses employing this kind of system usually have timesheettemplates printed on paper, and employees manually enter how many hours they’veworked on any given day and how much time they take off. As you can imagine,doing this on paper, especially if the number of employees increases quickly,can be a nightmare.

3. Some companies have transitioned from paper-based time andattendance systems to electronic spreadsheets.

This might seem like aneffective way to handle timesheets at first glance, however, there are alsomany drawbacks to using spreadsheets (Excel, Google Spreadsheets, etc.). In somecases, this system might have even more significant drawbacks than analogrecord-keeping.

4. A modern workforce management solution through which everything canbe digitalized.

There’s no need to put in so many hours of manual work just to managetimesheets. A modern workforce management solution provides a clocking systemvia a mobile app, and most processes can be automated.

This can save a businesscountless hour of administrative work as well as providing many opportunitiesfor automation. It’s a more efficient, transparent, and straightforward system,along with being a huge timesaver for everyone involved.

5.2 Cloudor hybrid workforce management solution types

Cloud computing has become mainstream in thepast decade in terms of organizations buying software on the market, and thisincludes workforce management solutions.

Cloud computing means that differentIT resources, such as computing power, data storage, and even differentsoftware solutions are available on-demand, without requiring the activemanagement of these resources by the user.

On a practical level, by using the cloud youcan access data and programs over the internet, instead of keeping everythinglocally on your hard drive or computer.

Not long ago, moving to the cloud was onlypossible for the most technologically advanced businesses, but nowadays themajority of businesses have migrated to the cloud to some extent.

Movingfunctionality to the cloud provides many practical advantages for ITdepartments (no hardware maintenance required, software is always up to date,etc.) and users (accessibility, UX, etc.), all while providing a competitiveadvantage for businesses (cost efficiency, flexibility and scalability).

With an on-premises setup, an organization hasits own IT infrastructure in their offices (on the premises), which needs to bemaintained, updated, secured, etc., by IT experts. It also necessitates asignificant initial investment to purchase all of the requisite equipment.

Thesoftware is installed on servers which also need to be regularly upgraded andmaintained. Applications are much harder to access from different locations,and with dozens of different applications in use, maintaining everything can becomeextremely complex; this is even more true when a business is growing quickly.

Nowadays companies generally decide either for apure cloud solution or for a hybrid option. The latter is especiallyappropriate for enterprise businesses, where part of the infrastructure anddata needs to be kept strictly in-house.

Exclusively on-premises solutions, onthe other hand, are becoming increasingly less popular and are not an effectiveway of organizing a company.

5.3 Supportfor the low touch economy

The last important trend to be familiar withwhen talking about workforce management is the so-called ‘low touch economy’trend. This is a trend that resulted from the COVID-19 epidemic.

The low-toucheconomy, also known as the contactless economy, refers to interpersonalinteractions and others(with surfaces, handles, etc., for example) that consistof minimum physical contact, or none whatsoever.

The idea behind thelow-touch economy is to prevent the spread of germs through contact withdifferent surfaces, or through being in close and direct proximity to otherpeople.

There are many measures that fitunder the low-touch economy umbrella, such as social distancing, videoconferencing, glass protection walls, visors, and so on. To these we can addsolutions such as automatic doors, limitations on the number of peoplesimultaneously in one room, and travel restrictions as well.

A modernworkforce management solution that supports the low-touch economy canprovide several features in this regard:

• Clockingin and out with a mobile phone to avoid additional contact with hardware otherthan one’s personal device.
• Touchlessfacial-recognition integration to clock time and grant access to differentareas.
• People-in-RoomCounter to automatically limit the number of people entering a given area.
• Integrationwith thermal cameras and mask detection to prevent the spread of COVID-19.
• DynamicScheduling to manage workforce on demand.

We hope you learned everything you wanted toknow about workforce management, why it’s important, what the main benefitsare, and how to choose the right software solution for your needs.

If you needadditional information, you can read oryou can read more about our solution.