best workforce management software
best workforce management software

HOW TO MEASURE THE EFFECTIVENESS OF WORKFORCE MANAGEMENT USING METRICS AND KPIS

Workforce management keeps employees engaged and motivated while optimizing the operation by implementing effective workforce management practices. It can help business organizations reduce their operational cost and better manage their cash flow, as personnel cost often occupies the top 50% of the operational budget.  So, the best workforce management software and technologies can significantly lower the cost of operation for an organization.

Why Measuring Workforce Management Is Important

Workforce management software or WFM systems are widely used in contact centers as an essential tool for tracking, scheduling, and planning employees. However, many other sorts of scheduling-intensive organizations, such as healthcare, retail, and even manufacturing, are beginning to realize the benefits as well. Furthermore, its application has expanded beyond automating and ensuring the scheduling of staff and meeting service-level agreements. It is now able to assure complete compliance with labor laws. Also, it can analyze trends to forecast and optimize future labor requirements and modeling, including managing contingent workers. Organizations must choose suitable and best workforce management software or best workforce management system to keep employees more engaged by allowing them to schedule their own work, request time off, and track accruals.

Business leaders must focus more on enhancing their workforce management practices. So, the organization must measure the effectiveness of the current WFM practices. Though, there are several key performance indicators (KPIs) that can be used for measuring the effectiveness of the workforce management operation. But it is important to find and select the KPIs and metrics that suits best for the operation of organization.

Metrics and KPIs to track Workforce management

Here are some crucial workforce management metrics, KPIs, and indicators that can help identify effectiveness of workforce management:

Productivity Metrics:

Workforce management makes administrative tasks and functions simpler. With appropriate and best workforce management software, the company can more accurately monitor and track particular areas, such as the number of picks done by a warehouse worker, the number of phone calls handled by the customer service agents or determining the time managers are taking for finishing their reports. Managers can also track production and compare it with the staff schedules to anticipate future productivity lapses by simply accessing the data.

Labor Metrics:

Utilizing competent workforce management software, the time spent on scheduling can be reduced and employee shifts can be planned better using demographics and skill sets – for example, a warehouse manager might determine how many forklift operators, engineers, and receivers are required for each shift. The businesses can track its seasonal workforce requirements or their expenses for employee overtime.

Monitoring workforce management indicators also gives the company a better understanding of what are the key HR-related KPIs that can enhance workforce management operations. These consist of:

Attrition/Retention.

It’s critical to monitor voluntary vs. involuntary attrition. The average cost of losing a good recruit, according to the employer’s survey is nearly $30,000. It is crucial to pay closer attention to employee turnover statistics that indicate a certain trend like a manager is losing staff members more frequently than the industry standard. This can be a consequence of a difficult role or function, but it can be also evidence of poor management practices.

Workforce management software can better align staff schedules by considering employee needs and skills. The following formula can be used to measure voluntary turnover:

Turnover = Number of Employees Who Left (Separation) X Time /Total # of Employees

Revenue Per Employee:

Recently, the importance of scenario planning has dramatically increased for FP&A (Financial planning and analysis) teams. Organizations can select KPIs such as revenue per employee to compare with other industries to improve the scenario planning. The formula for calculating revenue per employee is as follows:

Revenue Per Employee = Revenue/Total Number of Employees

Total Cost of Workforce:

According to the Society for Human Resources Management the Total Cost Of the workforce is beyond the simple salary and compensation benefits that organizations spend on their employees. But it is the total amount that a business organization invests in its human capital.

The following components must be added to determine the total cost of the workforce:

Direct compensation – sum of all compensation to staff excluding benefits (benefits consist of base pay, variable pay, and supplemental pay)

+

Benefits – sum of all health benefits and PTO

+

Labor costs – sum of insurance and taxes (E.g., payroll taxes), and the contingent workforce

+

Workforce overhead – costs related to enabling the workforce and expenses associated with employee-related events (facilities expenses, IT and administrative expenses, severance, and relocation expenses)

Recruitment.

Scenario planning techniques can also aid organizations in more effective workforce planning. The company may more effectively carry out succession planning, target the best new hires, and shift long-term employees into more challenging roles by anticipating workforce challenges. Time to fill is a crucial indicator that relates to the recruiting organization.

Training Effectiveness:

It’s critical to identify and locate training options for your present employees. According to a recent survey, less than 4% of companies redeployed or reassigned staff to new roles during the pandemic, losing a chance to retain brilliant talents engaged and employed. By measuring the effectiveness of their training programs, businesses can plan and utilize contingent workers more strategically to accomplish essential objectives.

Training effectiveness is difficult to measure, but it can be done using Kirkpatrick Model. It includes soliciting employee feedback about the training, then mapping those feedback with test results or performance KPIs, and finally, determining how it has impacted employee behavior and actual business results.

Employee Engagement:

Employee engagement is also challenging to assess, but it is getting increasingly important to design effective employee retention strategies and efforts. An HR solution or workforce management with tools for tracking time, registering attendance, leave and time off management, viewing and accessing employee information, salary disbursements, etc can make employee life easier. Employee self-service and managing employee benefits are the foundation of keeping an employee engaged. Some of the best workforce management software is now responsive and flexible and include features that enable staff to view their schedules from other devices and make changes to their schedules.

Customer Satisfaction. 

Businesses can measure customer satisfaction by collecting information at the time of the purchase or service after an interaction ends with contact center representatives or retail staff. Automated customer satisfaction surveys are distributed by businesses or simple net promoter queries like how likely a consumer is to suggest products or services are asked for measuring customer satisfaction. For performance analysis and improved employee management, this data may be coupled with WFM systems to better manage and schedule the talents.

 Conclusion

An organization can decrease labor costs and the cost of maintaining compliance by monitoring the relevant KPIs and metrics. With the successful implementation of workforce management, employees can have access to the finest technologies and workplace conditions, while managers can have clear visibility into data and trends. Therefore, they will become more productive, generate more revenue, and provide superior customer service.

Utilizing competent workforce management software, the time spent on scheduling can be reduced and employee shifts can be planned better using demographics and skill sets – for example, a warehouse manager might determine how many forklift operators, engineers, and receivers are required for each shift. The businesses can track their seasonal workforce requirements or their expenses for employee overtime.

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