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

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

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.

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.


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.


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.

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