Smarter workforce management slashes costs, boosts staff retention

Dave Schaller, consulting CIO.

In major manufacturing, industrial and retail organizations with large workforces, smarter workforce management can dramatically improve productivity and staff satisfaction, and can slash millions off costs such as unnecessary overtime.

This emerged during a webinar hosted by and UKG, in partnership with ITWeb.

Defining workforce management

Neil Pickering, senior manager, HR innovation at UKG, explained that workforce management benefits the three most important parties in an organization – employees, customers and the organization and its shareholders – by driving revenue growth, market share and productivity, ensuring employees get paid fairly. and enjoy their work, and that customers get great service, good products and a fair price.

He outlined smart workforce management tools such as forecasting to build an optimal schedule that puts the right people in the right place at the right time; ensuring that people adhere to the schedule; and analyzing data to understand which areas are most productive and where the greatest absenteeism is.

“This drives down wasted payroll costs by around 3 to 5%, reduces unplanned absences by up to 25% and drives up revenues by 1 to 3%,” he said.

Pickering noted that smarter workforce management was increasingly important in addressing changing employee needs and retaining skilled staff. “We need the right talent in organizations. According to LinkedIn, 44% of people are thinking about changing their jobs, and Gartner says staff turnover will be 20% higher in future. UKG’s Great Rethink survey found some of the real reasons employees quit aren’t aligned with the reasons managers believe they quit.”

In many cases, employees quit because of poor work-life balance or because they did not feel valued.

Pickering said: “We need better solutions – not just designed to drive productivity, but which also meet the needs of employees. They are asking for greater flexibility and control, so by using the right tools you give managers more time to spend with employees to make them feel valued, schedule work fairly and equitably, and help employees progress to higher wages by training them to take on new. roles and responsibilities.”

Slashing overtime over-spend

Dereck Sigamoney, MD of LaborGenie.Net, said key advantages of smarter workforce management were increasing efficiency and productivity and reducing overtime spend.

He cited two real-world case studies in which millions of dollars were saved by identifying and addressing unnecessary overtime.

“For example, in an organization in which 1.6% of time worked is overtime, it initially looks low,” he said. “But when we drill down into that detail, we find that the 1.6% amounts to 1.4 million overtime hours, which cost $38.4 million in annual overtime spend. Further analysis reveals that only 5% of employees equal 48.1% of the overtime, and 10% of employees equal 60.3% of the total overtime. Addressing this delivers huge savings for the organization.”

In another example, Sigamoney outlined the impact of unplanned absences on an organization. “If we find a 0.6% absence in scheduled hours, it sounds minimal. But when we drill down into the detail, it equates to 516,000 unplanned absence hours and $9.2 million spent on that absence. 5% of employees accounted for 19% of the absence hours and 10% of employees caused 31.9% of the total absence hours – if I address just these, I would address a large proportion of the absence hours,” he said.

Integral to HCM

Dave Schaller, consulting CIO and former CIO of a multinational manufacturer, noted: “If you can’t measure something, you can’t manage it. Workforce management starts with workforce measurement, and it is an integral part of human capital management. If you aren’t doing it, you aren’t really doing human capital management.”

Schaller said smart workforce management reduces payroll processing and errors, and enables accurate time and attendance. “Without it, how would you plan, schedule and track workers to maximize efficiency and ensure you have the right levels of labor in place?”

He noted that in large organizations, documented processes were often not aligned with what is taking place on the ground. “You could practically have a strike on your hands when you enforce documented shift and payroll practices, but employees had been accustomed to a free-for-all in terms of short time, overtime and double shifts. Once proper change management has taken place and systems are fair and accurate, it builds confidence in employees.”

Schaller added that change management should encompass communication and expectation management, with regular two-way communications up and down the chain of command to expose problems and enable prompt problem resolution.


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