Data mining to drive your business forward.
By Kevin Choksi
During the past several years, organizations from around the globe started to realize that innovation and competitive advantage are rooted within the workforce. As a result, HR teams receive greater demands to get the most out of the workforce. And they’re asked to do this while staying compliant and gathering more relevant information, all in an effort to drive bottom-line results.
As HR’s role becomes more strategic, it relies on technology to deliver greater value to the business than just basic automation. Enterprise workforce management systems can help HR and payroll organizations operate more efficiently. When implemented effectively, such systems go beyond streamlining labor activities to deliver valuable insight for accurate decision-making. The central pillar to this strategic approach is a robust labor analytics solution, which can offer deliverables to show how to optimize labor spend, facilitate compliance, and ensure that business objectives are reached.
However, several misperceptions about workforce management handcuff many organizations to an antiquated and purely tactical approach. Here are the three most common:
1. It is all about punch in, punch out, and getting the paycheck right. Despite major advancements in process and technology, some still perceive the monitoring of time and attendance as a means to one simple end: producing an accurate, on-time paycheck. Capturing hours worked is a core business function; however, time and attendance can also shed light on how effectively an organization deploys its resources. Timely insights into labor activities can reduce budget overruns and ensure the workforce aligns with business demands, so the appropriate resources are available when needed to support business priorities. Accurately tracking time and attendance also allows the organization to track compliance with pay rules and regulations, and supports an efficient payroll process.
2. The primary value of automation is removing human intervention. Automating paper processes delivers a baseline value in all circumstances—increased efficiency through streamlined processes, fewer errors, and the ability to optimize resources for more strategic activities. However, automating workforce management offers business benefits that far exceed the value of automation on its own.
For example, a fully automated workforce management solution provides better data to help organizations realize the full potential of the workforce. Organizations can capture labor rates and productivity information and transform that data into actionable insight—helping them to optimize labor spend and ensure the right mix of skills is available to support the business strategy.
Rather than look at workforce management systems as an automation benefit, organizations should instead consider its value in influencing the business strategy, driving productivity, and increasing profitability. A best-practice approach to workforce management encompasses using data analytics to optimize workforce performance and inform business decisions.
3. Automating labor activities for most of the workforce is good enough. Many organizations opt to automate time and attendance tracking for the majority of their workforce and to handle “exceptions” outside the system. A common example is automating workforce management for non-exempt employees but using manual processes for exempt staff. This compromise has dramatic downstream effects because it means that some workforce data will be housed on different platforms, or not captured at all, which prohibits the organization from taking full advantage of labor analytics. Furthermore, exempt employees are subject to leave policies, including the Family Medical Leave Act, and failure to accurately track time-based data makes it much harder to prove compliance in the face of fines or litigation.
Organizations that are able to efficiently capture, collect, and analyze labor-related information can effectively use data to drive evidence-based business decisions. But those organizations that only look at a subset of their workforce are missing the opportunity to understand efficiencies across the entire workforce. Armed with knowledge about the entire workforce, organizations can make appropriate strategic and financial decisions that support both current and future business goals.
Get Fully Vested
So how are organizations today approaching their workforce management strategy? According to Workforce Software’s 2011 Workforce Management Trend Survey co-conducted by Workforce Management, two-thirds of organizations (67 percent) rely on workforce management to facilitate compliance with labor laws, but less than a third (29 percent) are able to inform business strategy with their current workforce management systems. Similarly, only 17 percent of survey respondents had fully automated their workforce management processes. This gap suggests that most organizations are still basing some of their workforce management reporting on manually-derived data, which helps explain why so few companies are able to provide strategic insights from labor data. Leading firms that begin laying the foundation for a more efficient, holistic approach can gain a critical advantage over their competitors.
A key to realizing the full benefit of a workforce management system is the understanding that precision counts. Systems that only capture data on most of the workforce create an impetus for manual intervention and increase the risk of an inaccurate or an incomplete picture of labor. Data “blind spots” pose risks for an organization’s compliancy efforts because they may hide from view that certain pay policies are interpreted differently within pockets of the organization. Similarly, data blind spots often conceal primary sources of labor costs and issues. Total automation and the ability to capture, collect, and analyze labor-related data are critical to realizing the full potential of workforce management.
Data Drives Better Decisions
An enterprise-grade workforce management solution is integral to transforming HR into a strategic function. The following technology and process considerations can help your organization achieve bottom-line results through workforce management:
Easy does it. Make information and data capture easy and part of your employees’ day-to-day activities with minimal disruption. For example, provide field-based employees with mobile access to the workforce management application rather than require them to return to the office to input or review data. The right solution should cover the entire spectrum of labor levels or job codes that can be used within the system. The more granular the data, the more information that can be extracted from the system for analysis.
Consider compliance requirements. Data is central to facilitating compliance. Make sure system selection and implementation accommodates your organization’s compliance needs. Automated workforce management provides documented audit trails, but complete coverage is essential. Data blind spots in an audit trail can render that report ineffectual.
Evidentiary data to show that you’re accurately capturing time, calculating paychecks, accruing time off, and handling leave is increasingly important. The steady growth in the volume of complaints reported to the Department of Labor has raised the stakes.
Realize the economies of labor data. Think about which employee groups will be contributors of labor activity data and entering data into the system. Consider what types of devices will be the most convenient and reliable for recording that crucial information, and plan for the next generation of devices that will soon become mainstream. Ensure that your investments today are capable of interacting with these data capture devices as they evolve from clocks on the wall to smartphones in your employees’ pockets.
It is also important to evaluate which employee groups will be consumers of labor data. What types of devices will they rely on to access those reports? How do mobile and offline use factor into your considerations? Also, what does ease of use mean for these users? Thinking about these elements prior to implementing a solution is critical for ongoing improvement and employee engagement.
Reporting and analytics. For the analysis to be the most effective, it needs to be delivered in a format that is most useful for the end user, whether that is PDF, HTML or on a mobile device. Keep in mind that different data will interest different constituents. Capturing 100 percent of labor activities in a single platform will allow you to provide the salient information to each interested party. For example, operations professionals will be more interested in the composition of the workforce from a skill set standpoint and look for granular information about labor costs, the labor mix, and related business commitments. This will provide greater organizational efficiency.
Just as there are different uses and different ways to communicate the data, there are also different levels of reporting and analysis that can be leveraged within the workforce management system.
Identify essential data types and sources. In order to analyze the bottom-line impact of labor activities, make sure all workforce management data are complete and accessible. Staff schedules and employee absences are vital to understanding where you can tweak your processes to drive greater returns. Additionally, that labor data will need to be interfaced with other sources of business information. This often includes financial systems, work order systems and inventory systems. Understand what strategic questions you’ll be asking and then make sure you have all the necessary data to obtain the answers.
The Right Reporting Tool
In many organizations, workforce management data is still somewhat isolated. For example, a manufacturer might use a plant floor system that tracks piece counts or other productivity data. Other information might reside within an enterprise resource planning (ERP) or financial system that has no real-time interface. Bringing data from disparate systems together and combining information in a meaningful way provides a more holistic perspective and enables organizations to connect workforce activities with business outcomes.
The right workforce management analytics and reporting tool can serve as the connective tissue that unites these disparate data sources to provide an accurate and accessible view of the entire business from the standpoint of its largest controllable expense: the workforce. A robust workforce management analysis and reporting solution will provide the ability to create pre-defined reports that are automatically generated and “pushed” to the appropriate individuals in the appropriate format.
Individuals should also be able to extract the information they need from the system. This should be delivered in a point-and-click format and deliver drill-down capabilities so individuals can gain a deeper or more varied view of the information and proactively share that information with their peers.
Bringing disparate data points together via an easy-to-use tool also delivers a degree of timeliness to the organization. Real-time data will tell you what is happening now—and with the right analytics—what could happen in the future. For example, having the ability to see how changing the part-time/full-time mix could affect payroll costs or how a change in labor rate could affect overall profitability can affect business strategy and performance.
Measurable Business Results
A complete view of labor data allows HR and managers to perform root-cause analysis that can be used to identify and address issues (or potential issues) before they become major problems. It also enables organizations to identify high performing areas of the organization, understand what’s driving this, and then use that insight across the business. Access to detailed information about the entire workforce enables organizations to identify improvements and continually monitor, control, and adjust workforce strategies to meet business demand. By taking a strategic view of workforce management, enabled by carefully designed processes and enterprise-grade technology, HR can provide the types of business level insights that generate bottom-line results.
Kevin Choksi is CEO of Workforce Software.