The impact of workforce management software on a company's finances
For many companies, labor represents more than 60% of operating costs. Of course, employees are essential, so these costs are simply unavoidable. Unfortunately, the easiest solution, reducing the number of employees, has a negative impact on service levels and prevents sales from securing new contracts, two factors that are necessary to maintain good financial health. We will therefore explore an alternative solution that is gaining in popularity: Workforce Management Software. We will try to explain their impact on a company's finances and help you determine if this is the right solution for you.
What Is Workforce Management Software?
A Workforce Management Software (WMS) helps companies coordinate their staff and extract information to improve this coordination process. In order to ensure that the company can manage its staff effectively, this type of software offers tools that allow the following tasks to be performed:
Create and adjust schedules
Collect hours worked
The companies most likely to use this type of software are often companies that employ a large number of shift workers. We have found that companies with more than 75 employees, paid by the hour, and with variable schedules have the highest returns on investment.
How Workforce Management Software Can Help Me Financially?
As their name indicates, the primary resource managed by such tools is human capital. Therefore, the greatest financial impact they can have is the reduction of labor costs. The main sources of this reduction are staff assignment, overtime, employee productivity, and forecasting and payroll accuracy.
One of the most important roles of WMS is to optimize the number of employees scheduled to cover staffing needs to perfection. That being said, the beauty of software is that it can help you maintain impeccable service, no matter the unexpected, while limiting the number of overtime hours.
Often, in order to maintain good service, companies tend to plan for a larger number of employees to cover absences or to be able to cope with an unexpected increase in demand if they are in high season. However, these factors are very difficult to predict, resulting in a surplus of personnel and, consequently, a loss of profitability in the peak season. With the right set of tools, companies can modify their schedules in real time, adapt to these fluctuations and maintain their service level without incurring additional expenses.
For companies whose employees are paid by the hour, collecting and validating hours worked can be difficult. When these tasks are done manually, or with tools that are not adapted, errors are inevitable. These errors will result in direct losses. In one case, the employee is paid for hours he or she has not worked. While in the opposite case, the employee does not receive the fruits of his or her hard work, which very often leads to dissatisfaction and a higher turnover rate. To learn more about the impact of turnover on businesses and easy solutions to reduce it, read our article on this topic.
Does it change the way a business operates?
Now, if we look at it from a macro perspective, all management is done in a cycle: planning, execution, analysis, adjustment. Based on this model, WMS not only helps with execution, but also provides a real and accurate picture of costs, allowing you to compare them to budgets and forecasts to understand the sources of fluctuation so you can adjust your course. This contribution can be difficult to see at first glance. However, the amount of data that can be analyzed, the speed at which it can be extracted and the impact of the corrective actions that are taken are often impressive!
It is certain that there is nothing new in all of this, these softwares do not reinvent companies, only the way they work. Humans have been doing all these tasks for years. However, the management time that a technological tool can save is not negligible. We have observed a 75% reduction in the time needed to create schedules, a 66% reduction in adjustment time due to absenteeism or variations in needs, a 50% reduction in the time needed to create the payroll, not to mention all the time savings from self-service information collection and adjustments made using data from the software.
Are There Only Financial Benefits?
Since this type of product is used by the majority of an organization's stakeholders, the benefits are multiple. In addition to their impact on employee satisfaction, engagement and retention, they allow companies to be more competitive. By improving the reaction time to new customer requests or increased traffic, they help to win more contracts and offer better service. Not to mention that the wealth of information that can be drawn from them allows users to get the most out of the process when it comes time to make a bid. A better understanding of its costs, and what makes them fluctuate, coupled with a capacity to adapt that eliminates the need to forecast surpluses, makes it possible to offer the best price without increasing the risk.
How Do You Determine If Your Company Needs It?
First of all, we advise you to ask yourself the following questions in order to establish your action situation and your real needs. Next, you can consult our pages dedicated to schedule management and absence management where you can find cost calculators and tools to help you find the right solution.
How often is the average schedule changed once it is published?
How much management time does each of these changes require?
Do you think your team manages absences and sick leave in the most efficient way?
How long does it take to manage all of your team's leave requests?
How long does it take to manage a payroll, and is it error-free?
Are you utilizing all of your staff's available hours?
Are you able to accept all additional contracts from your clients?
Can you maintain the desired level of service throughout the year?
Are you aware of what impacts your labor costs, efficiency and profitability?
Follow us on Facebook&LinkedIn to keep up to date with the release of our next articles!
917 Avenue du Mont-Royal Est Montréal, Québec X2J 1X3 Canada