Workforce Management Systems Can Save Real Money

The SDI team shares the financial benefits of a workforce management system, with SDI’s Jonathan Gair providing the following lessons learned:

The implementation of a Workforce Management system (WFM) can provide measurable efficiencies, error-prevention, and cost savings, especially in organizations that are staffed 24x7x365 by hourly employees.

Before embarking on the path to a new workforce management system, organizations should answer the following questions about their workforce to make the case for cost savings:

• What is our total annual payroll cost?
• What percentage of payroll is overtime payments?
• How many hours do schedulers, timekeepers, and payroll administrators spend on each of their tasks?
• What are the average hourly wage of those employee involved in workforce management activities?

Measurable Return on Investment (ROI) statistics are the easiest way to justify the costs of implementing a new workforce management package.  Many organizations either do not document workforce metrics prior to an implementation, or do not record metrics against the individual components of workforce management activities.  By meeting with business owners prior to, and after an implementation, organization leaders can present a clear picture of the benefits of using the latest generation of scheduling, timekeeping, and payroll products that are on the market.

By automating workforce processes and gaining better visibility into overtime scenarios and staffing, large organizations with multi-million dollar payrolls can find that even 1% reduction in costs can have an enormous impact.  For these organizations, those savings can translate directly into reducing staff, transitioning managers from short-term management to longer-term strategic workforce planning, or by reducing the time that employees that only manage the workforce on a part-time basis can spend more time with their primary job.  For high priced, valuable resources, these additional hours per day or week can lead directly to increased productivity.

Organizations should look to maximize ROI in four areas related to workforce management:

• Overtime
• Manual Entry Errors
• Time Off Inflation
• Time Saved Moving from Manual to Automatic Processes

Based on real-world data and third-party research, these area drive measurable ROI returns for the following reasons:

Overtime – While offering overtime may be unavailable in certain circumstances, strong workforce management product suites like Kronos Workforce Telestaff for scheduling and Workforce Timekeeper for time and attendance can lead to less overtime costs year over year by:

• Providing the ability to proactively manage employees receiving overtime offers, such as offering more cost-effective resources or ensuring the equal distribution across an employee group
• Real-time reports and consolidation of employee time data coupled with system alerts allow managers to monitor employees who are projected to reach overtime
• Reporting on planned vs. unplanned overtime, along with the ability to analyze trends in who, why, and where the overtime dollars are being spent

Customers can typically save 1-5% in overtime costs after implementing the right workforce management solution.

Manual Entry Errors – Entry errors can occur anytime staff must manually document workforce data.  Hours can be miscalculated, work policies or rules can be misapplied, or numbers simple be recorded incorrectly.  The result of these errors can lead to a wide spectrum of over or underpayments.  Typically, large overpayments and underpayments are caught immediately (by payroll staff and employees themselves, respectively), but small overpayments may go unnoticed.  Electronic workforce management solutions can reduce the 1-5% of payroll processes that contain these errors.

Time Off Inflation – Accidentally or on purpose, manual accrual tracking may lead to employees receiving extra leave, resulting in lost productivity or overtime paid for employees to cover that unearned time off.  The current generation of workforce management tools provide multiple ways to limit time off requests that violate organizational policies, and provide real-time tracking on accrual balances and use.  An employee earning even one extra day of time off can lead to thousands of dollars of additional overtime.

Time Saved Moving from Manual to Automatic Processes –  Depending on the type of manual processes that are currently taking place in your organization, installing an electronic workforce management system that is exception-based and has automatic processing capabilities can drastically reduce the time spent on scheduling, timekeeping, or payroll tasks.  Each task, from creating schedules to managing day-to-day changes, force managers to commit their valuable time to ensuring the right employees are where they should be.  Not only can the best workforce management tools create schedules and assign employees to work positions without human intervention, but the ability to rapidly share workforce data between managers over an electronic platform can drastically increase the ability to spot and correct costly employee trends.  While each organization can be different, some see time reductions of up to 50%.

SDI Presence specializes in working with clients to realize their full potential across all back office roles – from the staff scheduler to the payroll administrator.  Embedded within some of the world’s largest workforce management companies, SDI couples in-depth product knowledge with consultants that have backgrounds in labor force analysis and manual-to-automated change management.  Contact SDI for assistance in deploying your organization’s workforce management system