Workforce management (WFM): objectives, methods and tools

Employees are one of, if not the most important mission-critical resource in any company. However, they are also a high cost factor. The key is to use this resource effectively in order to achieve maximum productivity while avoiding staff shortages. This is where workforce management comes in. Find out what professional WFM is all about and how it can make your day-to-day work easier in the long run.

Workforce management is a part of personnel planning which is in turn part of human resources. The latter covers all administrative and routine tasks performed by HR. Meanwhile, personnel planning ensures that the company’s personnel requirements are met in all respects - quantitative, qualitative, temporal and spatial. In other words, this means that the right number of employees (quantitative) with the right qualifications (qualitative) must be available at the right time (temporal) and at the right location (spatial). In doing so, personnel planning is supposed to help achieve the company’s primary objectives (e.g. increase production and increase efficiency in customer service).

Personnel planning is broken up into five areas:

1. Identifying personnel requirements
2. Recruitment planning
3. Personnel development planning
4. Workforce management
5. Redundancy planning

Workforce management refers to assigning employees to appropriate positions. Ideally, the employee’s skills profile should match the job profile perfectly. It also has to take into account the quantitative, temporal and spatial requirements of the company as well as the personal preferences and interests of the employees.

Effective workforce management should accomplish the following:

• Ensure consistent workforce availability: The goal is to maintain a constant balance between the workload and the time spent working. This is intended to prevent bottlenecks, which can result in decreased productivity, as well as cost-intensive surplus (e.g. for inconsistent work orders).
• Increase productivity while reducing costs: By filling positions with the most qualified employees, this optimizes the value chain in the company. However, employee satisfaction is also important for productivity and cost reduction. An effective workforce manager is familiar with the employees’ qualifications as well as their work-related needs and does not demand too much of them. This means that effective workforce management minimizes overtime and undertime as well as underworking and overworking. It also regularly assesses whether there is a reason or need for further training, new hires, reassignments or layoffs.
• Allow for the workforce to be flexibly deployed: A well thought-out WFM system also makes it possible to respond flexibly to peaks in the workload (e.g. during vacation season in the tourism sector) as well as to employee bottlenecks (e.g. due to frequent vacation-time requests during a specific period or sudden absences due to illness).

Workforce management is based on the basic idea of being need-oriented and optimizing how personnel is deployed. The term is also used in a more general sense to refer to the whole process of increasing productivity while simultaneously reducing costs. This means that personnel planning needs to be able to flexibly respond to changes in capacity. Such actions can have an impact on human resources, recruiting, personnel scheduling, needs analyses and HR analytics.

In addition to employees, workforce management also deals with “mobile resources” such as work vehicles, machinery and materials. These are also considered part of the “workforce” in the figurative sense.

Workforce management can also refer to scheduling shifts. The main difference is that shift schedules are usually created for a set, long-term period and are thus used for long-term planning. While WFM, on the other hand, is clearly focused on flexibility. This means that a workforce management plan always covers a limited period and is continuously modified as needed. Hybrid strategies are often used in practice. So, there can be a shift schedule, but any peaks in demand related to workforce management are then balanced out by adding more shifts.

Since WFM also uses tracking methods for time spent working, it is also related to time management to some extent. This includes all methods for collecting, preparing and using work-related time data.

A workforce manager faces many challenges in their day-to-day work. The largest is to find a compromise between long-term planning and flexibility. It is important to differentiate between the different timeframes used for planning, each of which plays a different role in workforce management.

1. Annual planning: Since it is difficult to predict changes in capacity over the long term, conducting workforce management on a yearly basis is considered particularly demanding. Yet, it is often essential. After all, the further in advance it is known who will be deployed and where, the easier it is for employees to adapt to the set times or to find replacements for themselves. Annual planning, however, is usually only a rough outline used to simplify planning for the coming fiscal year.
2. Monthly or weekly planning: This planning timeframe includes plans for vacations, trainings and replacements which should be prepared four to six weeks in advance.
3. Planning in the present: Ultimately, workforce management needs to be able to flexibly respond to short-term changes in the workflow, such as unforeseen peaks in the workload coupled with many employees being on sick leave at the same time.

The basic idea behind this “funnel-shaped” approach is thus to first draw up a rough, long-term plan and then refine it over time based on experience. To be able to predict the future needs of employees more accurately, the workforce and its work-related needs have to be continuously analyzed. Recurring patterns and forecasts of future developments are inferred from performance indicators such as revenue or the number of employees. These “forecasts” on workforce requirements and personnel availability can then be used to develop measures for avoiding overstaffing and understaffing.

Among the most important tools for workforce management are duty rosters and shift schedules. While these were handwritten in the past, there are now numerous technical tools to simplify and speed up the planning process.

One such tool is the Microsoft Excel spreadsheet. It is primarily used by smaller companies, but is also used in many medium-sized companies. It can be used to quickly and easily create duty rosters for weekly workforce management. Additionally, you can find numerous ready-to-use Excel templates online such as templates for shift schedules.

In addition to enabling you to visualize work hours and shift schedules, the Excel spreadsheet also provides many useful formulas and macros. These allow you to automate complicated calculations (e.g. for weekly hours or wages) and program additional functions such as employee lists and checkboxes. You can then either print out the finished work schedules as hard copies or send them directly to employees by email or via intranet.

However, since most information is entered into Excel spreadsheets manually, this tool is relatively error prone. This can lead to duplicate entries if the person is not paying careful attention, which cannot be prevented by formulas. Furthermore, this Microsoft tool’s range of functions is quite limited when compared to dedicated WFM software.

Due to Microsoft Excel’s functional limitations, many companies rely on specialized tools for their workforce management tasks. There are two main types of software for this purpose:

• Freeware: Freeware such as the workforce management tool developed by Bitrix24 is more suitable for smaller companies.
• Professional WFM solutions: Companies with a large number of employees, and thus a high administrative workload, prefer to use professional WFM software which is usually integrated into an ERP system (enterprise resource planning). These programs can usually be used as part of a paid subscription with a minimum period of up to 12 months. Prices range from around 40 to 130 euros (approximately 45 to 146 dollars). Typically, you pay a monthly flat rate or a variable rate based on your number of employees. It is worth noting that there are both industry-independent programs as well as specialized programs, such as those for call centers, temp agencies, the food service, health care and shift scheduling in the manufacturing industry. We recommend Humanity and Planday.

Good WFM software can usually be used for a wide variety of tasks, such as for tracking work hours and data, managing absenteeism or managing tasks and actions. Most programs are similar in design and functionality:

• A well-designed and visually appealing user interface provides a clear overview of employees’ work capacity, vacation days and absences.
• Through direct synchronization with the employee database, you can use the software to directly match up employees’ skills profiles with job profiles.
• Task scheduling is done via the drag-and-drop method. Using a mouse, you simply drag and drop employees onto their shifts on the calendar.
• Workforce management is done in real time. This means that every change, no matter how last minute, is automatically forwarded to the back office and can be accounted for immediately.
• Many tasks are automated such as the billing of work hours and overtime.
• Automatic alerts are used to let you know when more than one person has been assigned to the same task or when shifts overlap (conflict management).
• By giving your employees access to the WFM system, you can ensure that all employees are always informed about their work hours and shifts. Additionally, you can receive direct feedback on your workforce management and enter any changes into your system promptly. Naturally, you can still print out duty rosters and shift schedules as usual or send them by email.

The advantages of this software are obvious:

• Access to all pertinent data
• Easy to use
• Flexible
• Reduced organizational workload
• Saves time and money
• Less error prone than alternatives (e.g. Excel, handwritten lists)
• Can be accessed externally
• Can receive direct employee feedback
• Visually appealing

Workforce management is first and foremost management’s job. However, the employees in question should be involved in the planning process. This begins by determining whether company policy actually permits flexible workforce management. Whatever the case may be, you should involve the workers’ union or employee representatives in the design and implementation of the WFM system before, during and after its rollout. This is the only way to ensure that the employees' right to codetermination is protected.

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