Analyst Perspectives

Recent advances in workforce management (WFM) software are rewriting the way organizations tackle hourly workforce management and related administrative challenges. This is largely due to improvements in the design of business processes and a focus on enabling more hassle-free user experiences. The result is fundamental changes in how workers account for their time and request PTO, as well as how they access information on payroll, benefits and other company policies. These advances are also enabling managers to more readily consider workers’ as well as the organization’s needs when they forecast and schedule shifts. Scheduling that minimizes worker burnout from too many double shifts, for example, only makes management sense and should be a common interest.

These changing process dynamics align with broader shifts in the workforce. Younger workers are more comfortable than older colleagues collaborating in ways facilitated by social technology such as discussion forums. In response, employers must improve their ability to interact with employees in personalized and meaningful ways in order to retain, engage and energize them. At the same time, doing so will help organizations more effectively manage multiple generations of workers with somewhat differing needs. Beyond more personalized interactions and communication channels, hourly workers also increasingly prefer to get recognition and rewards for their efforts and achievements in personally meaningful ways.

Many organizations struggle to keep up with these changes. The first step to making improvement is for employers to accept that employee attitudes about work matter: An employee’s reaction to a work schedule with frequent shifts involving unpredictable hours, particularly when he or she can’t plan anything outside work, will range from pronounced disengagement to leaving. And frankly, the former can be more harmful to the organization due to its insidious effects.

To illustrate the significance of this issue, as well as the benefit of addressing it, employee turnover can average between 75 and 125 percent annually in hourly-worker-dominated industries such as retail, casual dining and hospitality – a magnitude of turnover that can significantly impact customer satisfaction and the bottom line. Most HR practitioners we speak with point to three major factors that contribute to high turnover. First, as noted, is the lack of control many employees have over their schedules. Second, many non-exempt employees are not able to envision their long-term career trajectory or can but don’t like what they see. Finally, these employees are typically hourly and many don’t have access to health benefits and other perks of salaried employment.

Fortunately, the right workforce management system can help HR departments mitigate many of these difficulties. Systems that include modern digital capabilities are able to:

• help ensure workers get more predictable and less burdensome work schedules.
• respond to demand for certain skills across different shifts, such as being proficient in a certain language.
• use analytics to determine when it would be beneficial to adjust staffing levels.
• determine if a PTO approval will result in an undue operating risk and then alert a manager or offer an employee an incentive to modify plans.
• use artificial intelligence to analyze cross-functional data from sales, finance and other departments to better manage workforce scheduling and forecasting.
• use bots to initiate dialogue with employees about their interests and availability rather than making assumptions that potentially lead to dissatisfaction.
• use AI-enabled sentiment analysis to monitor attitudes of the hourly workforce, including reactions to a management style, new policy or operational change.

With these capabilities, organizations can work to deliver a superior employee experience for hourly workers, not just for those who are salaried. I use the phrase “superior employee experience” to describe a state in which both employee and employer are deriving maximum value from the relationship.

Software for workforce management that is inadequate in functionality, usability or process design flexibility impedes an organization’s efforts to manage its hourly workers effectively. Fortunately, we see indications that more and more employers understand how the workforce is changing and what is needed to address these changes successfully. For example, one-third (34%) of those participating in our payroll management benchmark research said they plan to deploy new workforce management software. Almost half (47%) said they are not satisfied with their current product’s functionality.

We are currently conducting benchmark research on this topic and expect the data to show that the impetus for upgrading WFM platforms is moving beyond cost savings and improved collaboration to include enhancing the employee experience. Doing so will help organizations avoid employee disengagement, errors and potential safety and compliance issues by managing worker schedules proactively. We also expect to find that the combination of AI and eventually the internet of things will play a major role in WFM investments.

Along with our benchmark research, we are currently preparing the Ventana Research Workforce Management Value Index for 2018, a comprehensive evaluation of all major vendors of WFM systems. This Value Index is market research that assesses enterprise software and technology vendors and products in seven categories. We publish it to educate and guide organizations that are evaluating their current technology vendors or beginning a new vendor selection process related to workforce management. As with all of our research, this Value Index utilizes our extensive subject matter expertise and market-research-based best practices to help organizations understand their strategic options for deploying relevant technology. Read more about the Value Index here and stay tuned for the release of this important report on the state of the WFM market.

In summary, digital innovations and functionality enhancements across the three WFM pillars of labor forecasting and scheduling, time and attendance data capture and leave management are paving the way for WFM systems to deliver significantly greater strategic value. Administrative excellence is extremely beneficial, but it is strategic impact that allows an organization to ascend the ranks within its industry vertical.