Month: June 2023

How Workforce Management Software Saves 7-10% on Labor Costs

WFM / 28 Jun 2023

Labor costs are one of the biggest expenses for any business and if not managed properly, they can quickly spiral out of control.

One of the most effective ways to save costs in this area is by leveraging Workforce Management software; with its ability to automate various processes, it can lead to significant savings. In fact, our solution is proven to reduce labor costs by up to 10% (depending on the industry).

In this article, we’ll explore how workforce management systems bring labor cost savings through demand forecasting, optimized scheduling, productivity improvements and more.

How the Best Workforce Management Software Reduces Labor Costs

Optimal Employee Scheduling

Many variables need consideration when scheduling shifts, including availability, skillsets and compliance requirements.

Our total workforce management system, MANUS WFM, offers a wide variety of support tools that assist in deciding which employee should work when and where.

Just a few factors it considers are labor laws, employee preferences, and skill requirements to generate schedules that minimize overtime, eliminate understaffing, and maintain adequate coverage. As a result, a better balance between staffing levels and workload is achieved.

In organizations where demand fluctuates unpredictably, having an effective way to manage schedules is important due to the rapid response required. For example, a garden center will experience increased visitors when the weather is nice, so on sunny days, it’s necessary to have a sufficient number of skilled staff scheduled. WFM software provides the agility you need to be able to consistently meet service levels.

To consistently meet service levels, agility is required – and that’s exactly what WFM software provides.

Reducing Overtime Expenses

When organizations are short on staff, the existing employees have to work overtime; naturally, when the overtime rate is higher than their standard rate, this becomes problematic.

In addition, employee productivity is lower when they are overworked, making those extra hours lead to lower output and higher absenteeism due to illness. However, when the workload is optimally distributed, this is no longer an issue.

Using workforce software that has a powerful engine that can help you schedule shifts optimally eliminates these problems. In addition, our Employee Self Service functionality lets employees easily swap shifts or time-off requests. This prevents the need for costly last-minute replacements.

Another way in which the software optimizes scheduling is through demand forecasting.

Accurate Demand Forecasting

One of the key features of workforce management software is its ability to accurately forecast demand based on historical data and variables like seasonality, sales data, and other relevant factors that provide insight into staffing requirements.

With this information, organizations can ensure the right number of staff are present during peak hours and avoid overstaffing during slower periods.

Being able to forecast ahead of time brings a number of additional benefits – namely, benefits to the workforce. Having more stability around shift planning helps reduce employee stress and improves their work-life balance. On the other hand, an unpredictable schedule can wreak havoc on their personal and family lives (especially for parents) and can cause financial struggles.

A study on scheduling instability revealed that 37% of participants (US retail and food service workers) had variable schedules, their income fluctuating by around 30% on a weekly basis.

Shift cancellations also proved common – and of the workers that had shifts cancelled, 65% reported experiencing psychological distress. In addition, 25% of participants that experienced a large degree of shift variation reported sleep problems.

While labor laws in the Netherlands protect against last-minute cancellations, it’s clear that unpredictability around working hours causes significant problems for wellbeing.

The figures above are not promising for any company that wants to retain its workers – yet doing so is vital to motivate Gen Z and reduce the costs associated with churn. Thankfully, workforce planning software takes the chaos out of scheduling by staying one step ahead.

Improved Absence and Leave Management

Managing absences and leave can be a complex and time-consuming task. Workforce management solutions simplify this process through automation, allowing employees to submit requests, managers to review and approve them, and schedules to be updated accordingly.

Automating this process leads to fewer errors and reduced administrative burden, and ensures optimal staffing levels without over-relying on costly temporary replacements.

Real-Time Monitoring

WFM software provides real-time monitoring capabilities, allowing managers to track employee attendance, punctuality, and adherence to schedules. This helps identify and address potential attendance issues promptly, minimizing costs associated with absenteeism, and reducing productivity losses. It also helps to create a culture of accountability.

Analytics and Reporting

Feeding workforce data into an analytics platform allows for valuable insights into workforce trends, performance metrics, and cost analysis. Organizations can then make data-driven decisions with a view to implementing improvement strategies to further optimize labor costs.

Some examples of the types of patterns the data may reveal include excessive overtime, areas with low productivity, or underutilized workforce.

Our workforce planning software come with an API for integrating with all of the major reporting and Business Intelligence tools on the market.

How to Maximize Labor Cost Savings with Workforce Planning Software

Below are a few tips to help you get the most  from your workforce management software solution.

Invest in the Right Workforce Management Software

Choose a robust, comprehensive solution that aligns with all your requirements and offers all the features mentioned above. To recap, it should provide accurate demand forecasting, employee scheduling, absence management, real-time monitoring, and Employee Self Service features.

It should also have a powerful compliance engine and be able to integrate with external systems such as payroll software, analytics platforms, clocking in systems and more.

Continuously Train and Educate Staff

Provide comprehensive training on how to use the workforce management tools to their full capacity, ensuring that staff understand all of their intricacies. This will also promote consistent and accurate data input and reduce errors.

Regularly Review and Update Processes

Keep evaluating and refining your workforce management processes in collaboration with the software. Identify areas for improvement such as automating manual tasks, eliminating redundant processes, and optimizing workflows to enhance overall efficiency.

Other Costs a Workforce Management Solution Reduces

Here are a few more areas in which WFM software reduces costs.

Churn

As mentioned, unpredictable scheduling can cause a significant blow to morale. Employee expectations are ever-increasing when it comes to work-life balance and wellbeing; if they have other options, they are not likely to stick around if their work schedule causes the difficulties we mentioned earlier.

According to SHRM, replacing an employee costs one third of their annual salary, with various other sources including Gallup stating much higher costs.

With a McKinsey survey indicating that more than 30% of the workforce in nine European countries are considering quitting, the costs start to mount considerably. (Turnover rates for service and sales workers in Europe are particularly high).

Payroll Management

Accurate time and attendance tracking ensures accurate and timely pay, which is also vital when it comes to keeping employees happy. It also means less payroll errors and the time and cost associated with correcting them.

Other Administrative Costs

Admin costs can be reduced in a broad range of areas. WFM software that has a powerful compliance engine automates a great deal of the work needed to ensure compliance, reducing the associated costs. Using powerful software that automates many processes also reduces the number of HR staff required.

In addition, manual and paper-based time and attendance tracking systems can be fraught with errors, with managers wasting time troubleshooting.

Conclusion

Labor cost optimization plays a crucial role in ensuring profitability. WFM software serves as a powerful tool in reducing labor costs by accurately forecasting demand, optimizing employee schedules, managing absences, reducing time theft, and much more. It also has the potential to reduce the staggering costs caused by employee turnover.

Manus Software Europe provide world-class enterprise workforce management software for large, multinational organizations throughout Europe and beyond. To book a demo or learn more about our professional services, contact us today.

Time Evaluation in Hospitality and Leisure: The Key to Greater Efficiency and Lower Labor Costs.

Leisure / 13 Jun 2023

Time evaluation plays a vital role in workforce management within the hospitality and leisure industries. With operations that rely heavily on staff availability, scheduling, and efficient use of time, accurately assessing and managing the hours worked by employees is vital.

In this article, we delve into the significance of time evaluation in these industries, including how it ensures compliance with labour regulations and enhances overall operational efficiency.

What is Time Evaluation in Workforce Management Systems?

In workforce management solutions, “time evaluation” and “time and attendance” are two distinct modules that serve different purposes but work together closely.

Time and attendance focuses on attendance tracking, capturing and recording the actual hours worked by employees. It typically involves features such as time clock integration, timesheet submission, and absence management. Its primary goal is to accurately track and record employee attendance data, including clock-in and clock-out times, breaks, leave, and other time-related information in order to calculate wages.

On the other hand, time evaluation involves processing and analyzing the recorded time data to perform various calculations and derive meaningful insights. Its primary purpose is to interpret the captured time data and generate actionable information for payroll processing, cost analysis, and labour reporting.

A time evaluation engine applies predefined rules and policies configured in the system to the recorded time data. It validates against predefined parameters, and calculates various metrics such as worked hours, overtime, paid time off, and shift differentials. It also checks for exceptions – deviations in an employee’s time and attendance data that fall outside predefined rules, such as unapproved absences, breaks that are too long or short, and so on.

The output of a time evaluation engine is typically a set of processed and calculated data, including attendance summaries, labour cost breakdowns, and exception reports.

While the time evaluation engine performs calculations and generates data for payroll processing, it does not usually handle the actual payroll calculations itself. Instead, the processed data is passed to the payroll module or integrated with a separate payroll management system, where the final payroll calculations, deductions, and tax calculations are performed based on organizational policies and legal requirements.

By accurately evaluating and managing time, businesses can optimize shift scheduling and compensation management, monitor employee performance, and make informed decisions regarding resource allocation and workforce planning.

Benefits of Time Evaluation in the Leisure and Hospitality Industries

In the leisure and hospitality industries, customer satisfaction is directly tied to employee performance in many cases, which means time evaluation can have a significant impact on business outcomes.

Below are some of the key benefits of time evaluation in these industries – on its own and when combined with other modules of WFM software.

Identifying Areas of Waste and Inefficiency

Time evaluation can help businesses identify areas where time is being wasted or where processes are inefficient by tracking productivity.

A concrete example is in the housekeeping department of a hotel, where the hotel would track the time housekeeping staff take when cleaning and preparing guest rooms.

The data may reveal that staff are unable to complete the required number of rooms within their allocated hours, which could indicate a bottleneck in the process (such as spending too much time moving from one room to the next or taking too many trips to the store room  – well-known inefficiencies in hospitality).

Another issue that could be revealed is that certain employees are completing the required workload within their shift while others are not. This may suggest the need for additional training or the need to standardize the way in which certain tasks are done, ensuring that each employee takes a consistent and efficient approach.

In other cases, it may mean investigating barriers to employee productivity – as only 20% of working hours are spent on high-priority tasks, and in the UK, employees spend more than two hours per day doing anything that is not considered to be work.

Managing Complex Employee Scheduling

Providing exceptional guest experiences heavily relies on having the right employees in the right place at the right time. However, these industries often face unique challenges related to fluctuating demand, multiple shift patterns and event-driven staffing needs.

Analyzing time and attendance data provides insights that can inform the scheduling based on these complex requirements, allowing managers to create and adjust schedules based on specific skill requirements, staff availability, and the booking of special events.

WFM software also enables businesses to analyze historical trends, which helps in accurate demand forecasting and workforce planning, ensuring that the right number of employees are scheduled to meet anticipated guest volumes, taking into account seasonal variations and other factors.

This also helps in addressing smaller-scale variations, such as determining the optimal staffing levels for different times of day or week. This helps prevent overstaffing during slow periods and understaffing during peak times, leading to more efficient use of resources and improved customer service.

Effective Training and Development

Time evaluation data is an important part of talent management, providing insights into employee productivity and other performance management areas. This data can then be used to identify training needs and implement targeted development programs.

By investing in employee growth, businesses can elevate service quality, resulting in a positive impact on guest satisfaction and loyalty. In addition, training and development is a crucial part of motivating Gen Z employees, so it’s more important than ever to be well-informed about their needs.

Enhanced Staff-Guest Ratio

Effectively managing labour hours and schedules helps to ensure that the staff-to-guest ratio is appropriate. This means having enough employees available to deliver personalized and attentive service to guests, resulting in a positive guest experience.

More Benefits

Below are some additional benefits that apply in many industries.

Lower Costs
Optimized resource allocation leads to labour cost savings (from 3% to 7% with our workforce planning software).

Compliance
Ensures compliance with various labour regulations such as break requirements, maximum working hours, and overtime rules, reducing the risk of legal penalties or labour disputes.

Automation
The software automatically takes into account factors such as overtime, public holidays, weekend, or other required conditions.

Compliance with Service Level Agreements
Meet SLAs by accurately tracking employee working hours and ensuring staff coverage during specific service hours or contractually obligated time frames. This ensures that service commitments are met, leading to satisfied guests and maintaining strong partnerships with clients.

Integrations
Workforce software can integrate with systems such as payroll and other SaaS HR management solution. This allows for seamless data flow, eliminating the need for manual data entry and reducing the risk of errors or discrepancies.

Payroll Efficiency
The integration with payroll software automates the calculation of wages, overtime, and other payroll-related tasks. This reduces the administrative work involved and minimizes payroll errors, ensuring that employees are paid accurately and on time.

Real-Time Monitoring
The real-time monitoring of time-related data enables managers to address issues promptly and adapt to unexpected changes with ease.

Employee Self-Service
Time evaluation software often provides self-service capabilities, enabling employees to view their schedules, request time off, and access their time-related information. This empowers employees and further reduces administrative overhead.

Increased Revenue
The implications on revenue relate to optimized workflows and staffing levels, and improved customer service as a result. In addition, factors such as timely pay and insights into professional development needs may help retain employees.

Time Evaluation with the Best Workforce Management Software
Using an enterprise workforce management system facilitates all the benefits listed above. The core of our WFM solutions is an advanced time evaluation engine, providing the following:

  • 100% accurate and timely pay slips for all legislations, Collective Labour Agreements or local business rules.
  • Full compliance and support for multinational organizations; ISAE3402 and GDPR approved.
  • Multinational and multibranch setup within one database – all parts of your organization with different legislations or regulations are managed centrally.
  • Within the sets of regulations, you can vary the parameters based on employee type, function, location, department or even per employee, if required.
  • Automatically updates in line with changes to the setup of regulations, ensuring calculations are always accurate.
  • The re-calculation analyser lets you retrace your steps, indicating why the results are what they are.

Conclusion

Using the right workforce management software that has a powerful time evaluation engine equips organizations to efficiently manage their workforce, improve productivity, control labour costs, ensure compliance, and enhance the overall guest/customer experience.

It simplifies and automates administrative tasks, saves time, and enables businesses to focus on delivering exceptional service while effectively managing their most valuable resource – their employees.

These benefits enable businesses to consistently deliver exceptional guest experiences, exceed customer expectations, maintain efficient payroll processes, and ultimately thrive in a highly competitive market.

Our renowned enterprise workforce management software ensures that employees with the right skills are in the right place at the right place, and at the right cost – contact us today to book a demo.