Workforce management (WFM) requires many moving parts — scheduling, time tracking, labor forecasting, and compliance, among others. Balancing all these business components while keeping your employees happy proves key to business success. Read on to learn more about why WFM matters, best practices, and software solutions.
What is Workforce Management (WFM)?
Workforce management is the process organizations use to optimize labor force and resources. It requires ensuring the right employees with the right skills are in the right place at all times. Workforce management is intended to improve productivity and efficiency.
Why is Workforce Management Important?
Workforce management helps eliminate waste in an organization by properly allocating time and resources. It ultimately optimizes productivity, enhances employee satisfaction, and reduces operational inefficiencies.
Without workforce management, businesses may encounter excessive labor costs, understaffing, overstaffing, and compliance issues. These issues can lead to employee unhappiness and burnout—, in addition to reputation and legal issues.
No matter what business you’re in, your employees are the most important asset. As such, it’s important to manage labor effectively via workforce management to maximize employee effectiveness and keep employees happy and engaged.
The Goal of Workforce Management
The ultimate goal of workforce management is to optimize efficiency. Effective workforce management contributes to better decision-making, ensuring labor resources align with demand and business objectives. This strategic approach helps companies maintain competitiveness while reducing unnecessary expenses.
Benefits of Effective Workforce Management
Benefits of effective workforce management include the following:
Improved Productivity
Workforce management enhances productivity by ensuring employees are scheduled appropriately and tasks are assigned efficiently. Getting the right duties in the hands of the right person leads to a more engaged and motivated workforce, which reduces downtime and inefficiencies.
Cost Reduction
By optimizing labor allocation, workforce management minimizes overtime expenses and reduces labor waste. It enables businesses to maintain budget control and avoid unnecessary payroll costs.
Enhanced Employee Satisfaction
Effective WFM fosters a positive work environment by preventing scheduling conflicts and reducing employee burnout. When workers feel their time is respected and managed well, they’re naturally more satisfied with their jobs. Satisfied employees are more engaged and productive, leading to higher retention rates.
Better Compliance and Risk Management
Workforce management helps businesses stay compliant with labor laws and industry regulations. Through accurate record-keeping and fair scheduling practices, it reduces the risk of legal issues.
Accuracy: Better Data, Better Decisions
With workforce management you get improved accuracy in payroll, forecasting, and time tracking that eliminates costly errors and helps predict future staffing needs. Better compliance with labor laws, data-driven decision making, and enhanced customer service are natural outcomes of well-implemented workforce management. Plus, when managers have clear visibility into performance metrics and attendance patterns, they can make smarter decisions about staffing and resources, creating a more efficient workplace.
Scalability and Adaptability
With effective workforce management, businesses can quickly adapt to changes in demand and workforce needs. This flexibility can help businesses scale operations while maintaining efficiency in their dynamic industries.
Main Elements of Workforce Management
The main elements of workforce management are:
- Time and attendance: Tracking employee work hours, absences, and overtime to ensure accurate payroll processing and labor cost management.
- Scheduling: Creating and optimizing employee schedules based on demand and availability to improve productivity and efficiency.
- Compliance: Ensuring adherence to labor laws, union agreements, and company policies to minimize legal risks and maintain fair workplace practices.
- Reporting: Empowering informed decisions by offering insights into productivity and labor cost trends.
Simplifying and reducing the administrative work involved in these key WFM areas empowers managers to focus more on coaching their reports.
Workforce Management Best Practices to Follow
Follow these best practices to craft an effective workforce management strategy: .
- Make it flexible: Field workers often have varying work hours due to fluctuating service requests and varying job durations. Mobile workforce management requires flexibility to adjust work assignments in real time and optimize scheduling.
- Consider all employee types: If you use contractors or consultants, consider how your contingent workforce fits into your workforce management flow. Balance employee and contractor schedules strategically, determining when paying employee overtime makes sense versus when utilizing contractors would be more economical.
- Monitor key metrics: Track workforce data, such as job completion rates and overtime costs, to identify areas for improvement and enhance decision-making.
- Engage employees: Involve team members in scheduling decisions and workload distribution to increase buy-in and satisfaction, leading to better retention and productivity.
- Invest in software: Automate workforce management tasks with workforce management software.
Challenges of Workforce Management
While workforce management optimizes efficiency, figuring out how to streamline employee schedules isn’t an easy feat. Workforce management challenges include:
- Managing fluctuating demand and last-minute schedule changes
- Ensuring compliance with labor laws and regulations
- Balancing workforce productivity with employee well-being
- Accurately tracking time, attendance, and overtime
- Integrating workforce management tools with existing systems
- Managing a mix of full-time, part-time, and contract workers
How Workforce Management Systems Help
Workforce management solutions are software tools designed to streamline scheduling, time tracking, compliance, and productivity. Through automation, WFM software takes the manual work out of scheduling and time tracking. This reduces errors and helps ensure compliance.
How To Choose a Workforce Management Solution
There is a cost and time commitment when it comes to implementing WFM software, making it important to find a solution that best supports your unique business needs. Consider the following factors:
- Scalability: Choose a solution that grows with your business and adapts to changing workforce demands.
- Ease of use: A user-friendly interface ensures smooth adoption and minimizes training time.
- Automation: Look for tools that streamline scheduling, time tracking, and compliance.
- Reporting and analytics: Robust data insights help optimize workforce efficiency and decision-making.
- Mobile accessibility: A mobile-friendly platform supports remote and field-based employees.
Workforce Management FAQs
Still have questions? Read on for the answers to common queries.
How Does Workforce Management Support Decision-Making?
Workforce management delivers real-time data, forecasting, and analytics to help businesses make smarter decisions about staffing levels, scheduling, labor costs, and employee productivity. By tracking these metrics, managers can optimize their workforce planning and respond quickly to changing business demands.
How Does Workforce Management Help Employees?
WFM ensures fair scheduling and helps provide employees with better work-life balance. It creates a foundation where employees can thrive both professionally and personally. Through smart scheduling practices, managers can ensure proper staffing levels while respecting their team’s need for work-life balance.
The system also prioritizes employee safety by preventing excessive consecutive shifts and maintaining appropriate rest periods between workdays. This careful attention to scheduling helps reduce fatigue-related incidents and keeps the workplace secure.
Perhaps most importantly, modern workforce management puts control back in employees’ hands. With user-friendly platforms, team members can easily submit PTO requests, swap shifts with colleagues, or adjust their availability – all without endless email chains or paperwork. This flexibility doesn’t just make life easier; it shows employees they’re trusted and valued.
What is Remote Workforce Management?
Remote workforce management refers to overseeing and optimizing a distributed workforce. This often involves using digital tools for scheduling, tracking productivity, and facilitating collaboration.
What is External Workforce Management?
External WFM is managing non-permanent workers, such as contractors and freelancers.
What is Total Workforce Management?
Total workforce management is a comprehensive approach that integrates both internal and contingent workforce management to optimize staffing, productivity, and business goals.
The Future of Employee Workforce Management
With hybrid and remote work on the rise, the need for WFM solutions will only increase. According to Technavio, the global workforce management software market size is estimated to grow by $3.67 billion from 2025-2029, which amounts to a compound annual growth rate of 8.4%.
Statistics show that HR professionals can also expect AI to continue to permeate workforce management. 56% of HR professionals surveyed by Paychex report they are already using AI in their roles.
“I expect that number to increase over time. Knowing these important trends and leveraging the right tools and technologies is critical to our national team of more than 600 HR business partners at Paychex,” says Alison Stevens, senior director of HR Services at Paychex. “We work with our customers every day to find a balance between realizing operational efficiency and the human aspect of HR that employees clearly desire.”
Enhance Your Workforce Management with Paycor
There is a plethora of tools to choose from when it comes to workforce management. But piecing together disparate solutions isn’t an effective workforce management strategy, as it leads to inefficiencies and errors.
A unified workforce management solution, like Paycor, includes scheduling, payroll, time tracking, analytics, and more — creating an end-to-end workforce management platform.
Check out Paycor’s Workforce Management Bundle to learn more.