Workforce management (WFM) is the way in which employers strategically allocate people and resources, track attendance and comply with constantly changing workplace laws and regulations. Ultimately, the objectives are to optimize productivity and reduce risk. When WFM is part of a cutting-edge software solution, it can also help businesses improve employee relations, enhance customer service and create a positive financial impact.

What does workforce management mean?

Workforce management means recognizing the top priorities of an organization and anticipating human capital challenges so that the proper steps can be taken to mitigate liabilities and maintain efficiency. Scheduling, timekeeping, data analysis and regulatory compliance are just a few tasks central to this purpose.

Goals of workforce management

Every employer has different priorities, but most businesses, regardless of their size or industry, generally share a desire to be more efficient and productive than their competition. Another common goal of workforce management is to comply with changing laws and regulations.

Why is workforce management important?

WFM is important because employers who have inconsistent workforce policies and practices may experience:

  • Compliance violations
  • Increased costs
  • Staffing shortages
  • Workplace safety incidents
  • Inefficient production
  • Higher turnover rates

How does workforce management work?

A workforce management solution uses historical data and machine learning to predict future staffing needs. It then creates schedules that best fit the forecasted model and automatically tracks employee time and attendance.

What are the functions and features of a workforce management solution?

A workforce management solution should be capable of the following:

  • Labor forecasting
    Fluctuations in consumer demand, holidays and even the weather can make it difficult to maximize or even stay within labor budgets. But by modeling these scenarios, employers can anticipate factors that may lead to over or understaffing.
  • Scheduling
    When creating schedules, employers have the ability select employees based on a number of criteria, including experience, skills, preference, etc. Workers can also exchange shifts amongst one another or share their availability in advance to avoid gaps in coverage.
  • Time tracking
    WFM solutions capture data at the source – time clocks, kiosks, mobile apps, web-based timesheets and points of sale (POS) devices – and automatically apply specific business rules to help ensure accurate and efficient payroll processing.
  • Absence management
    Paid time off (PTO) and extended leaves of absence, such as those granted under the Family Medical Leave Act (FMLA), can be easily tracked.
  • Overtime management
    WFM systems may generate alerts when an employee’s total hours will trigger overtime or if someone tries to work extra time without approval. This feature allows employers to allocate overtime fairly and efficiently and helps them avoid excessive payroll costs due to unapproved work hours.
  • Analytics
    Managers can view real-time data via customized dashboards and make scheduling corrections as needed. They may also run reports to view historical trends across a variety of key indicators.
  • Regulatory compliance
    Configuring work and pay rules within a workforce management solution makes it easier to comply with wage and hour laws, collective bargaining agreements and other employer policies. The system also produces timecard audit trails, which can be an invaluable tool to limit exposure in the event of a dispute.
  • Mobile accessibility
    From a mobile device, employers can quickly fill shift vacancies or edit schedules. This feature makes it possible to ensure optimal coverage even when workers call out unexpectedly.

What are the benefits of workforce management?

The right workforce management solution, when implemented and used effectively, can help employers:

  • Control costs
    Overstaffing, excessive overtime and other costly expenses can be minimized by using technology to forecast labor needs. With some advanced WFM solutions, employers can even see how budgets are impacted by schedules as they’re created.
  • Run payroll with greater accuracy
    Workforce management software makes payroll more reliable because it automatically analyzes hourly labor and identifies patterns of overtime. Repetitive data entry and manual calculations are also eliminated, thereby minimizing human errors.
  • Improve productivity
    Benchmarks allow employers to cross reference their time and attendance data against businesses that are similar in size or in the same region or industry. If their workforce isn’t measuring up to the competition, they can take corrective action.
  • Create smarter schedules
    With real-time data at their fingertips, managers can quickly identify shift vacancies and fill them before they result in an understaffed situation. The ability to create schedules by location, department or job also helps ensure optimal coverage.
  • Minimize compliance risk
    Overlapping FMLA and state leave laws are more easily managed with automated workflows that track employee eligibility and leave balances. In addition, the online recordkeeping available with WFM software is helpful if there’s ever an audit by a government agency.

Choosing a workforce management solution

Industry, location, workforce characteristics and strategic goals generally determine which workforce management solution is right for a business. Despite these variables, many employers follow these steps when evaluating providers:

  1. Define the existing state of processes
    Outline the WFM processes that are in place today and who’s responsible for them.
  2. Gather feedback
    Talk to key stakeholders about their current pain points and where they’d like to see improvements.
  3. Assess maturity level
    Determine where the organization is in its workforce management journey and if it’s ready for an advanced solution.
  4. Create a wish list
    Prioritize the requirements of a new WFM system and begin to evaluate potential providers based on those points.

Frequently asked questions about workforce management

What is the role of workforce management?

One of the primary objectives of workforce management is to increase productivity without incurring additional labor costs. Accomplishing this goal generally requires having the right people and resources in the right place, at the right time.

What does workforce management do?

Employers use workforce management to perform, among other things, many of the following tasks:

  • Forecasting labor needs
  • Scheduling employees
  • Tracking time and attendance
  • Managing absences
  • Analyzing data
  • Supporting compliance

What are workforce management tools?

WFM tools are software solutions that help employers achieve their workforce objectives. Options range from the transactional (basic time and attendance) to the transformational (advanced WFM, analytics, AI and mobile).

This article is intended to be used as a starting point in analyzing an employer’s workforce management obligations and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.