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What is workforce management?

Workforce management describes the processes used to allocate employees and resources to optimize productivity, reduce risk, and remain compliant.  

People tend to view a company’s success as dependent on how well it manages external interactions—specifically, creating effective products, offering valuable services, and maintaining positive customer relationships. But while these front-end processes are vitally important, they do not represent the entire equation for business success. Internal processes, interactions, and strategies play essential roles in determining how effectively an organization can meet customer demands while pivoting to address changing markets and other circumstances. And of these essential internal processes, often those that have the greatest potential impact are the ones that involve the company’s most crucial resource: its employees. 

Employees bring with them the skills and experiences they rely on to perform their assigned tasks, but before they can be put to optimal use, they require direction. Workforce management (WFM) allows organizations to take a strategic approach to allocating employees, along with the essential resources those employees depend on. Correctly implemented, WFM empowers organizations with a more intentional and goal-aligned approach to resource (and human-resource) distribution. 

Effective workforce management software encompasses talent acquisition, skills development, performance management, scheduling, time tracking, labor forecasting, and compliance with labor regulations. It also addresses the challenges of managing distributed teams and facilitating remote work. By integrating these components, organizations can create an agile and adaptable workforce capable of meeting market demands and achieving organizational goals. These benefits extend beyond operational efficiency, impacting employee satisfaction, retention rates, and cost optimization. 

More specifically, an effective approach to WFM can provide:

Better Metrics

Effective WFM software enables organizations to gain valuable insights into essential business metrics. By utilizing advanced WFM tools and technologies, organizations can accurately determine the exact number of employees required to complete specific tasks or projects. This data-driven approach ensures optimal staffing levels, preventing overstaffing or understaffing scenarios that can negatively impact productivity and cost-efficiency. 

Moreover, WFM systems provide real-time visibility into employees' daily performance. Through automated tracking and reporting features, organizations can monitor and measure individual and team productivity, identify areas for improvement, and make informed decisions to optimize resource allocation. This data-driven approach helps organizations identify top performers, reward exceptional contributions, and address performance issues promptly, fostering a culture of continuous improvement.

Enhanced Policy Alignment

Workforce management plays a critical role in aligning policies across the entire organization. By establishing consistent policies and procedures, WFM eliminates inconsistencies that can lead to increased costs, staffing shortages, workplace safety incidents, and production inefficiencies. Additionally, workforce management allows organizations to stay up to date more effectively on evolving workplace and employment laws, ensuring regulatory compliance. 

A well-implemented workforce management strategy ensures that all employees adhere to labor regulations, industry standards, and company policies. It promotes equitable practices related to scheduling, time tracking, leave management, and other workforce-related processes. This policy alignment not only mitigates compliance risks but also creates a harmonious work environment, enhancing employee satisfaction and reducing the likelihood of potentially disruptive conflicts.

Improved Employee Engagement and Retention

Workforce management directly impacts employee engagement and retention rates. By utilizing WFM practices, organizations can create transparent and fair scheduling processes, allowing employees to enjoy predictability and work-life balance. Employees who have control over their schedules and can easily request time off or swap shifts experience higher job satisfaction and are more likely to remain committed to their organization. 

Workforce management likewise enables organizations to identify skill gaps and provide targeted training and development opportunities. By investing in employees' professional growth and aligning their skills with organizational needs, organizations can foster a culture of continuous learning and career advancement, leading to higher employee engagement and retention.

Cost optimization

Optimizing labor costs is a significant benefit of workforce management. WFM systems provide accurate labor forecasting capabilities, allowing organizations to align staffing levels with demand and avoid unnecessary labor expenses. By efficiently scheduling employees based on workload and demand patterns, organizations reduce their overtime costs and minimize the need for temporary or contract labor. 

Furthermore, WFM tools help identify opportunities for operational efficiencies, such as optimizing shift patterns, improving task allocation, and reducing time theft or ‘buddy punching.’ These cost-saving measures contribute to overall profitability and competitiveness.

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Although workforce management software options all have a similar mandate of optimizing employee and resource orchestration, not every WFM solution is of the same caliber. Top WFM software provides a range of functionality, and generally includes: 
 Graphic displaying the features of a workforce management solution.

Although workforce management software options all have a similar mandate of optimizing employee and resource orchestration, not every WFM solution is of the same caliber. Top WFM software provides a range of functionality, and generally includes: 

  • Absence management
    An effective WFM solution includes robust absence management capabilities to handle diverse types of employee leave, such as vacations, sick days, and other time-off requests. It enables organizations to manage and track employee absences efficiently, ensuring appropriate staffing levels and minimizing disruption to operations. 

  • Analytics
    Advanced analytics functionalities are crucial in an effective WFM solution, providing organizations with actionable insights and data-driven decision-making capabilities through comprehensive reports, dashboards, and visualizations. These workforce analytics help organizations identify trends, optimize resource allocation, and continuously improve workforce management strategies. 

  • Labor budgeting
    Labor budgeting features in workforce management software help organizations accurately forecast and allocate labor costs. This enables businesses to align labor expenses with needs, optimize staffing levels, and ensure cost-effective resource allocation. 

  • Mobile accessibility
    Work is no longer tied to the office (or the desktop computer); today’s workforce is untethered and expects to be able to perform vital functions through their authorized mobile smart devices. Mobile accessibility allows employees and managers to access the system from anywhere, at any time to view schedules, request time off, and swap shifts, while managers can approve requests, monitor workforce data, and make real-time adjustments on the go. 

  • Overtime management
    An effective WFM solution should include features to efficiently manage overtime, helping organizations monitor and control overtime hours, ensure compliance with labor regulations, and optimize workforce scheduling to minimize costs. 

  • Performance management
    Tracking and evaluating employee performance is a major factor in workforce management. WFM performance management tools enable organizations to set performance goals and conduct regular performance reviews while also providing time-relevant feedback to enhance employee engagement and productivity. 

  • Regulatory compliance
    Given the potential penalties for noncompliance, effective WFM solutions must be capable of ensuring that the business in question is operating in line with labor laws and industry regulations. This helps organizations automate compliance-related processes, such as managing work hour restrictions, breaks, and rest periods, reducing the risk of compliance violations. 

  • Scheduling
    Robust scheduling capabilities empower organizations to create optimized schedules based on demand, employee availability, skills, and a range of other factors. Efficient scheduling helps minimize overstaffing, understaffing, and conflicts while ensuring that the right employees are assigned to the right tasks. 

  • Time tracking
    Finally, accurate time tracking is a fundamental feature of effective WFM solutions. Time tracking enables organizations to capture and record employee work hours, breaks, and absences, facilitating accurate payroll processing, providing insights into labor costs, and ensuring compliance with labor regulations. 

Because workforce management encompasses such a range of functions and responsibilities, it is no surprise that building a comprehensive solution tailored to specific business needs can be a major endeavor in terms of time and effort. Still, the advantages make the investment more than worthwhile. When establishing a foundation for optimal workforce management, organizations should consider the following steps:

Step 1: Establish strategic direction

In the first stage, leadership sets both short- and long-term objectives, determining the desired outcomes of a WFM solution and how the workforce will need to be aligned to meet those goals. Establishing a strategic direction provides a clear vision and purpose for workforce management efforts, enabling the organization to prioritize and allocate resources effectively.

Step 2: Perform analysis

Through data gathering and auditing of the current workforce, organizations can identify overlaps, gaps, and inefficiencies in their existing workforce processes. Thorough analysis helps identify areas for improvement—such as skill gaps, staffing shortages, or process bottlenecks—and enables organizations to make data-driven decisions in optimizing their workforce.

Step 3: Identify possible solutions

Various tools and software exist to apply workforce management principles, and choosing the most suitable ones depends on the organization's current workforce and future objectives. Identifying the right solutions enables organizations to streamline processes and maximize efficiency without losing sight of their goals.

Step 4: Standardize procedures

Once the appropriate WFM solutions are in place, it is important to create standardized procedures for use throughout the organization to ensure process consistency, eliminate ambiguity, and enable effective communication across teams. Clear procedures promote transparency, minimize errors, and enhance overall operational efficiency.

Step 5: Automate wherever possible

By leveraging technology and automation tools, organizations can reduce manual administrative tasks, streamline data entry and reporting, and minimize the risk of errors. Implementing automation reduces the time and effort demands associated with specific tasks, freeing up valuable employee time so that they can focus on more strategically relevant responsibilities.

Step 6: Monitor and course correct

Workforce management is an ongoing process that requires monitoring and evaluation; as objectives change or new challenges arise, organizations need to adapt their WFM systems accordingly. Monitoring progress, assessing performance, and making adjustments as needed ensure that the workforce remains aligned with organizational goals and evolving business needs, even during unstable periods.
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Effective workforce management is essential for organizations to create a productive and engaged workforce. However, many organizations struggle with siloed HR technology and overly complex employee journeys. That's where ServiceNow HR Service Delivery Integrations come into play. ServiceNow is committed to making the world of work, work better for people by delivering digital workflows and seamless integrations that enhance employee experiences while unlocking productivity. 

With ServiceNow Employee Workflows and integrations with leading HCM and workforce management solutions, organizations can optimize how they approach resource allocation and alignment. The unified portal of ServiceNow Employee Center provides employees with easy access to the right HR apps and relevant information, eliminating the frustration of navigating multiple backend solutions. Additionally, ServiceNow Virtual Agent supports managers and employees with expanded conversations, simplifying various HR-related tasks. And that is only the beginning.  

Demo ServiceNow today to see for yourself how ServiceNow is revolutionizing workforce management. Because, after all, your workforce is what drives your business.  

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