What Is Workforce Management? What to Know When Choosing a WFM Solution

What does workforce management mean amid a landscape of evolving employee expectations and the changing nature of work? In this article, we explore what organizations need to consider when identifying workforce management solutions that enable deploying the right talent at the right time.

For an employer, workers represent two sides of the same coin: They’re the company’s biggest expense—and its biggest asset. Each day, workers directly affect everything from brand perception to profit margins. No wonder, then, that research routinely demonstrates a close connection between engagement, productivity, and profitability.

Because a company’s workforce is so elemental to its success, leaders have always been charged with determining how to maximize worker performance and productivity. But as the nature of work and workers’ expectations have shifted dramatically in recent years, this responsibility has accrued additional weight. Modern executives need to understand not only when and where to deploy workers today, but also how these needs will morph tomorrow. To ensure the right number of workers with the right skills are staffed at the right time now and in the future, executives use workforce management (WFM) processes.

In this article, we explore what workforce management means amid a landscape of evolving workers expectations and the changing nature of work, and what organizations need to consider when identifying workforce management solutions that enable deploying the right talent at the right time.

What Is Workforce Management?

Workforce management is about processes that maximize workforce performance and productivity.

At its most basic level, workforce management focuses on time management. Also known as WFM, workforce management enables organizations to know how many employees it needs to complete a job or fill a shift each day, week, and month. WFM tools are mainly for managing workers who need to be on-site to perform their job (such as frontline workers) since a primary benefit is helping companies schedule workers’ workdays and track the time they spend at work. Advanced tools also help forecast how many workers will be needed to meet shifting business demands, such as for a new project or seasonal traffic. 

Traditionally, WFM relied on a top-down approach in which supervisors created shift schedules for their teams. (Think printed spreadsheets tacked to break room walls.) This manual approach reinforced the perception of timekeeping and scheduling as the boring-but-necessary back office part of HR. Necessary? Yes, but it’s without the strategic impact or innovative potential associated with HR disciplines like employee benefits or learning and development.

Thankfully, the evolving nature of work has shifted this view of WFM. As an extended workforce—one with a mix of salaried, part-time, contingent, and freelance workers—has become the norm, scheduling hours and activities while monitoring efficiency has grown tremendously complex. Forget dividing X hours across X people: Today’s managers must consider scheduling preferences, individual skills, budget constraints, and regulatory compliance across multiple worker classifications. Manual processes or disparate legacy systems no longer cut it. 

This increasingly complicated reality has highlighted the importance of data-driven WFM and modern WFM tools.

Why Is Workforce Management Important?

The unprecedented upheavals of recent years—from the pandemic to worker shortages to supply chain struggles—have underscored the need for businesses to get the most value out of their extended workforce while adapting to changes and opportunities. Business leaders must be able to ready their workforce for change, while complying with scheduling laws and worker safety guidelines.

Amid the headwinds of constant change, employers have to invest in attracting, retaining, and developing their most valuable resource: their workforce.

Similarly, businesses can no longer afford to treat hourly workers as expendable or their scheduling needs as optional. Today, hourly and contingent workers make up the backbone of many organizations. And they expect to be treated that way.

Modern WFM can go far beyond scheduling and time tracking to help leaders manage these changing norms. In its fullest iteration, WFM uses real-time data and artificial intelligence (AI) to link workforce planning with enterprise-wide strategic planning, maximizing worker performance, efficiency, and engagement while reducing organizational risk. This approach also creates a single source of truth, rather than forcing leaders to access full-time worker data through a human capital management (HCM) system and contingent worker data through a separate vendor management system (VMS). A unified solution allows HR, finance, and operations leaders to fully grasp their total labor costs, even as workforces grow increasingly complex and alternative worker classifications proliferate. 

What Is Workforce Management Software?

As we mentioned earlier, many organizations have gotten stuck using manual processes, siloed systems, and disconnected data to manage their workforce. The problem is that this approach works only when people, schedules, and timekeeping are completely predictable. 

Of course, human nature and the complexities of workers’ lives means that scheduling is anything but static. At the same time, operational leaders face mounting pressure to align workforce operations with larger company strategy while launching new business models, redeploying workers to different roles and locations, and supporting new worker expectations. In this environment, traditional WFM simply doesn’t stand a chance.

To accomplish this, WFM platforms create a single source of data drawn from a unified system of time, scheduling, and payroll. They leverage AI to match labor demand with supply and surface key workforce information to help managers optimize schedules to meet business needs while abiding by labor regulations and workers’ scheduling preferences.

Beyond optimizing scheduling, these tools ensure that organizations can pull real-time reports, create a complete understanding of their labor costs, and drive enhanced decision-making. With a sophisticated WFM approach and the right software behind it, organizations can painlessly put the right labor in the right place at the right time. 

For instance, Workday Scheduling and Labor Optimization software delivers in the following areas:

Scheduling: A worker-first advanced scheduling solution uses AI to balance labor demand with worker preferences, generating optimized schedules while giving hourly workers more flexibility and control.

Time anomalies: As part of the Time and Scheduling Hub for managers, Workday automatically reveals possible time-entry errors and alerts managers about unusual time entries. This saves time and improves payroll and labor cost accuracy.

Skills discovery and management: With workforce strategy and skills aligned, organizations can swiftly deploy the right workers with the right skills to the right places. They also can spot skill gaps.

Demand forecasting: As an input to Workday's AI-based optimization engine, machine learning-based demand forecasting helps managers create optimized schedules for forecasted labor demand based on external factors, such as sales history, foot traffic history, weather data, or local event data.

With workforce management, HR and operations can harness the power of their workforce to not just respond to change but to thrive—whether in the face of a pandemic, a new market opportunity, or new competitive pressures.

Because a company’s workforce is so elemental to its success, leaders have always been charged with determining how to maximize worker performance and productivity.

What Are Workforce Management Examples?

Workday’s workforce management software gives both workers and managers greater control over their work lives—while ensuring organizations meet business and compliance needs. 

With Workday Scheduling and Labor Optimization, workers can indicate when and where they like to work. They can select their preferred hours and locations, sign up for extra shifts, and swap hours with their coworkers. Automated scheduling tools take workers’ preferences into account, scheduling them during the shifts that work best for them. As managers review and adjust the automated schedule, Workday continues to validate it against workers’ availability and qualifications. Once the manager approves the calendar, workers receive a notification to review their time for the upcoming week.

This system prevents scheduling snafus by enabling seamless communication. Say, for example, a worker sees an upcoming schedule and realizes they’re no longer available to work the Wednesday afternoon shift. Rather than reaching out to a manager and waiting for a response, the worker simply indicates the change in the Workday app. The manager then immediately receives a notification, along with suggestions for other workers whose schedules and skills match the Wednesday opening. 

Additionally, both the worker and the manager can post the hours to the open shift board so that any other worker with the right qualifications can pick up the extra time. On the open shift board, workers see only the shifts they’re qualified to work. When a coworker picks up a shift, the manager then approves the change and the affected workers are notified. 

Meanwhile, behind the scenes, Workday tracks the schedule against regulatory and compliance requirements—alerting the manager if, for instance, an extra shift would push the worker into overtime, or if an employee doesn’t take a mandatory meal break.

As a result, everyone can better balance their work and life through a simple, seamless scheduling experience. For workers who have multiple jobs or who juggle work lives with the demands of being a caregiver or student, this scheduling power provides the worker experience they want and need—helping them to become more engaged and feel more valued.

What Are the Top Benefits of Workforce Management Tools?

Having the right labor deployed at the right time and in the right place ensures that work gets done correctly and efficiently. Organizations avoid a plethora of headaches, from too few or inadequately trained workers to costly compliance errors and legal problems. As a result, optimized WFM tools help companies—especially those that rely heavily on contingent and hourly workers—achieve and maintain a competitive advantage while making life easier for managers and workers alike. 

Additionally, intelligent worker-first scheduling solutions allow operations leaders to improve productivity and save on labor costs by dynamically managing labor needs. With these tools, frontline managers can manage team schedules on a weekly and daily basis, as well as understand forecasted and actual labor costs.

Workday’s workforce optimization software gives both workers and managers greater control over their work lives—while ensuring organizations meet business and compliance needs.

This flexibility benefits employers and workers alike. Especially in a tight labor market, employers need to provide a positive work experience that encourages retention. By giving workers  the ability to manage their own schedules through a WFM app, organizations can increase worker satisfaction and reduce churn. Similarly, mobile-ready scheduling tools give the increasingly remote and deskless workforce greater autonomy—which also helps drive hiring and retention.

Realize the following benefits with Workday Scheduling and Labor Optimization:

Make every worker count: Understanding each worker’s skills enables the company to apply those skills as needed. Knowing the worker is the first step in engaging the worker.

Empower smart staffing and scheduling: Workforce management allows employers to put people where and when they’re most needed.

Establish predictable labor costs: A schedule informed by reliable, real-time data leads to labor cost transparency. And better visibility means better business outcomes.

Lower administrative costs: Less manual intervention drives down administrative costs.

Real-Time Labor Cost Analysis: Managers gain real-time visibility into labor costs without waiting for a payroll integration because all Workday data (including time, absence, and scheduling) are all in one place and immediately accessible.

Put control in workers’ hands: In a time of skills shortages and high turnover, workers expect flexibility from their employers. A company that provides scheduling flexibility and visibility becomes an employer of choice.

In addition, Workday Scheduling and Labor Optimization provides a schedule score, giving schedulers and operations leaders a quantitative measurement of how their schedules meet their labor and business needs. With this score, they can see if they’re on target to minimize labor costs while covering all required hours.

What Are the Key Considerations for Workforce Management Tools?

In the new world of flexible work, a top-down approach in which employers dictate schedules is becoming akin to a fax machine. Unified WFM software helps organizations more easily and effectively attract, engage, and retain talent.

WFM software should provide:

  • A single source of truth for HR data.
  • Transparency into costs and other critical workforce metrics.
  • Automated schedule generation that pulls in workers’ preferences and their real-time data, such as time off.
  • Streamlined schedule creation—freeing up time for frontline managers to focus on coaching their teams and serving their customers.
  • A simple, inviting user experience so workers can easily complete HR-related and other administrative tasks.

Workday’s WFM tools also meet workers where they work rather than requiring them to log in and out of separate systems. Workday extends into natural workspaces such as Microsoft Teams, allowing workers to take quick actions, such as taking time off or checking in and out, within the natural flow of their everyday work.

What Is Workforce Management in 2023?

Amid the headwinds of constant change, employers have to invest in attracting, retaining, and developing their most valuable resource: their workforce. WFM in 2023 cannot simply treat workers as data points on a hiring, scheduling, or expense spreadsheet. A system that merely slots workers into a calendar may have been sufficient at one time—but not anymore. Today’s employers need more complex WFM techniques and systems that understand and characterize people according to their skills, preferences, experiences, and needs.

Organizations can no longer rely on outdated WFM systems that offer little insight into people’s skills. Instead, they need software that enables their workforce to respond nimbly and embrace evolution. In other words, they need workforce optimization, meaning a broader platform that includes the power of WFM with other HR functions, such as benefits, recruiting, and talent.

As a strategy, workforce optimization infuses skills into the WFM process, combining the efficiency of automated WFM with the flexibility of a skills-based talent approach. It integrates WFM applications with HR and operations processes such as talent management, recruiting, benefits, compensation, skills management, employee experience, and planning and analytics. 

WFM software that manages time, schedules, absences, and pay can no longer be seen as simply nice-to-have tools that help the business conduct its operations. They are now necessary touchpoints between employers and workers, enabling people to manage and optimize their own work lives while driving business success.

Learn more about combining the power of Workday HCM with essential workforce management solutions to optimize the full value of your workforce, boost productivity, and engage and retain talent.

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