It’s not a secret that employees can be costly. The Human Capital Management Institute figured that 70% of the organisation’s total operating cost was comprised of employee salaries and hourly wages. This figure has risen each year since 2005. Keep in mind that research firms Gartner and IMS Research both estimate that between 1.5% – 3% of enterprise software solutions spending is dedicated for workforce management.
What does it mean, that systems which are intended to improve workforce utilisation and reduce labour costs, as well as curb absences, consume such a small amount of technology budgets within many organisations? It means that most organizations have not yet fully utilized the potential for comprehensive workforce management. It is clear that many companies have the potential to significantly and sustainably increase their business performance.
Due to its central role as a catalyst for achieving the following goals, workforce management must be a priority when firms prioritize IT spending over the coming years.
Automating employee time, pay calculations and payroll eliminates mistakes and ensures that even the most complicated pay rules are applied with precision. Furthermore, organisations can see the entire workforce to help them plan better and adjust their staffing levels when necessary. These improvements can dramatically lower average labour costs. Aberdeen Group research found that 33% of overtime is not planned in organisations with optimised workforce management.
Increasing operational agility & productivity
A more automated approach to workforce administration allows managers to have access to more information and context, making it easier for them, ultimately leading in better decisions. A company’s ability, to allocate the right people, with appropriate skills, at the proper time and at the most affordable cost, directly impacts its ability to respond to fluctuations in production without compromising on quality. Aberdeen group’s research found that companies that use automated staff scheduling solutions achieve a 4% average increase in workforce utilisation. This leads to significant productivity gains.
Reduced compliance and financial risks
Compliance obligations for large organisations extend far beyond the scope of national laws, especially in large companies. Additionally, you must adhere to all local ordinances and union rules. Compliance gaps and the absence of transparency can lead to costly mistakes. A solid workforce management solution allows organisations to easily demonstrate compliance, as well as reduce non-compliance costs and the associated risks.
Customer satisfaction improvement
There is a direct relationship between customer satisfaction and optimizing workforce efficiency. Aberdeen Group says that customers who have been satisfied with their workforce optimisation performance for the past year are seeing a 18% increase in satisfaction. This is compared to 9% for all other companies. Effective workforce management is another aspect of sustainable growth.
Employee morale can be improved
The automation of workforce management can also increase employee engagement and morale via increased transparency and improved communication between manager and employee. Aberdeen Group research shows that companies with best-in class workforce optimization results in a 11% year-overyear increase in employee satisfaction compared to 2% for the rest.
Organizations can cut labour costs, streamline compliance, and empower employees to make better decision-making at the point of need to help them reach their business goals. Automating the time, scheduling, absence and leave functions will give you a much better understanding of labor costs and activities. This can help organisations find ways to sustainably increase their performance.