Workforce Optimization: Creating a New Path to Business Agility

Companies have always needed to pivot in response to changing business conditions. But when COVID-19 hit, they faced a whole new set of challenges. Almost overnight, organizations had to quickly respond to radically different customer behaviors and worker needs.

Many companies couldn’t keep pace with the need to launch new business models, redeploy workers to different roles and locations, support worker expectations, and transition to remote work. The reason? Legacy workforce management technologies and disconnected human resources (HR) and operational processes hampered agility, preventing companies from quickly changing course.

The crisis threw into stark relief the need for a new workforce management approach—one that looks at optimizing workforce processes and needs across the entire company rather than just focusing on managing time or scheduling as functional silos. The old model, already outdated, proved to be inadequate, and companies that had depended on yesterday’s ways were left behind. 

2020 underscored the need for an agile approach that enables businesses to optimize the full value of their workforce—from salary and hourly to contingent and gig workers—through unpredictable times, and quickly adapt to any change or new opportunities. It was a wake-up call for organizations that were still struggling with paper-based approaches, manual processes, and managing their workforces from disconnected, siloed systems that offered little insight into worker skills.

“A lot of people think agility’s just moving fast, but that’s not necessarily always the case,” said John Gardner, a payroll and compliance manager at U.S.-based member-owned cooperative Land O’Lakes, Inc., which has been on a journey to Workforce Optimization, during a Workday webinar. “To be successful in the long term, you need to be able to pivot on a dime.” 

Readying the Workforce for Future Change

Unprecedented challenges brought on by the pandemic signal a permanent shift to the business landscape, forcing operational and HR leaders to rethink how they ready their workforce for change.

That’s where workforce optimization enters the picture. It’s a strategy that combines the efficiency of automated workforce management with the flexibility of an agile, skills-based talent approach. With workforce optimization, HR and operations can harness the workforce to not only respond, but actually thrive in rapidly changing environments.

It’s a critical lever in driving business continuity and profitability through any type of change—whether a major global challenge like the pandemic, a new market opportunity, or new competitive pressure.

The Journey to Workforce Optimization

Each organization’s workforce optimization journey is unique. In working with many customers, Workday has identified three distinct stages of workforce optimization, with each stage delivering more value from the workforce over time. And like any journey, different organizations may have different destinations, yet it all starts with a foundation of digitizing workforce operations. 

Administrative excellence—Organizations need to digitize their administrative processes with a single source for HR data, connected to automated processes and workflows. They need transparency into costs and a clear understanding of workforce metrics, and they want to give their workers a simple and inviting user experience for engaging with HR and common administrative tasks.

Operational agility—Once organizations have that administrative foundation in place, they need to be able to flex and adjust the workforce in the face of change. They need a deeper handle on labor costs, and they want to automate more processes and decision-making. They want to understand the skills that each worker has. And they want to put more control and self-sufficiency in the hands of workers and managers. 

Workforce optimization—Organizations want to continuously optimize and drive more value from the workforce. They need to forecast labor demand and desired skills. They need to proactively upskill and reskill workers and provide a great experience, much of it mobile, where workers can choose when and where they’d like to work, which roles they’d like to work toward, and add additional shifts. At this phase, organizations need to make every worker count.   

Optimizing Operational and HR Functions

Just ask Land O’Lakes, an agricultural cooperative based in Minnesota. Four years ago, the company implemented Workday to achieve an administrative foundation with automated workflows and a single source of data. Like many companies at the onset of the pandemic, Land O’Lakes had no idea about the scale of disruption the crisis would cause. But because the cooperative had already begun to rethink its workforce optimization strategy, it was able to respond and adapt to the pandemic with speed and agility. As a result, Land O’Lakes was able to adjust aspects of its business model and quickly redeploy workers.

But remote work wasn’t possible for a very important aspect of their operations: the cows.

“We had a significant portion of our labor force impacted that had to work virtually, but we have employees that have to go into our manufacturing facilities because, obviously, the cows are still making milk,” Gardner said. “We process millions of gallons of milk every single day. Animals have to eat, so we're processing millions of tons of animal food every single day as well.”

The impact of scheduling on-site essential workers went beyond workforce planning. Land O’Lakes needed to create new payroll earning codes to be able to reward the employees who had front-line roles during the pandemic and new leave of absence payroll codes related to COVID-19, Gardner said.  

And Land O’ Lakes also had to account for employee safety. With Workday, Land O’Lakes was able to gather employee COVID-19 questions, return to work preferences, and vaccination information. 

“We were always trying to be agile, but before Workday, it was very, very difficult to do so,” Gardner said. 

Supporting Remote and Front-Line Workers

Managing both remote and front-line workers amid a pandemic requires compliance with scheduling laws and employee safety guidelines. But employers also had to rethink how compensation and paid leave benefits support front-line workers. 

Consider Washington State Employees Credit Union (WSECU), a financial credit union with headquarters in Olympia. At the onset of the pandemic, when its front-line workforce had to pivot in how they serve credit union members, WSECU created a time-entry code that designated additional hourly pay for employees working on-site at credit union branches. WSECU also created time-off benefits designated for COVID-19 testing or quarantine. All time codes were created quickly in Workday and ready in an afternoon.

Although many changes impacting the workforce have been spurred by the pandemic, disruption isn’t isolated to unprecedented times. “Our Workday system is going to allow us to grow in the future and help us increase our efficiency,” said Gretchen Bornstein, HR management system specialist at WSECU, during the webinar.

Continuing Innovation to Keep Pace With Change

Moving forward, Workday will continue to innovate as customers’ needs change and they need to evolve their approach to workforce management.

To help customers fully optimize their workforce to change and evolve, we are investing heavily in improving the employee experience of all worker types, connecting disparate systems to provide a unified environment and leveraging artificial intelligence (AI) and machine learning (ML) for new levels of efficiency. Areas where we are investing include:

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

• Time Anomalies—Part of the new Time & Scheduling Hub for managers, automatically surfaces possible time entry errors and alerts managers of unusual time entries, saving time and driving payroll and labor cost accuracy. 

• Skills Discovery and Management—Aligns workforce strategy around skills, providing the agility to quickly deploy and redeploy the right workers with the right skills to the right places, and understand skills gaps. 

• Workforce Planning—Continuous planning that unifies real-time finance and HR data with analytics and enterprise planning, for quick decision-making.

• Workday Payroll for Australia and Workday Payroll for Germany— Will leverage our core payroll foundation to provide the best combined HCM/payroll/talent solution for employers with worker populations in these markets. The solutions will be unified upstream with Workday Human Capital Management and Absence, and downstream with financials settlement and distribution of calculated payroll disbursements, and will be fully compliant with local regulatory laws and standard business practices.*

In a disruptive business landscape, organizations can’t rely on static, siloed workforce management systems. They need a strategy that enables their workforce to embrace change. Through workforce optimization, companies forge new paths in creating workforce value. Employees become engaged, skilled contributors who impact business outcomes. Organizations foster a flexible, fluid workforce. Companies gain a clearer understanding of an employee’s capacity, contribution, and growth potential. Simply put, with a workforce optimization approach, companies can do more than navigate business disruptions—they can emerge stronger.

_{*Our future product content describes announced products that are not yet generally available and contain forward-looking statements for which there are risks, uncertainties, and assumptions. Our description of unreleased services, features, functionality, or enhancements are subject to change at Workday's discretion and may not be delivered as planned or at all. Workday assumes no obligation for and does not intend to update any such forward-looking statements. Customers who purchase Workday services should make purchase decisions based upon currently available services, features, and functions.}