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Workforce Management Applications: A Promise of Operational Efficiency

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June 01, 2002
Workforce Management
Alanna Klassen - aklassen@radiantsystems.com

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© 2002 Hospitality Upgrade. No reproduction without written permission.

Through the improvement of operational efficiency and facilitation of business intelligence, WFM systems allow operators to optimize the labor force, reduce the cost of administrative tasks required to manage labor and enable the practice of strategic HR.

One of the most efficient ways to impact a hotel’s profitability is through effective management of labor. With the assistance of a workforce management (WFM) system, operators can better manage the capacity of the existing workforce, thereby minimizing (or maintaining) labor costs while improving service and productivity.

WFM applications are suites of business tools that integrate and automate all labor management processes from schedule to paycheck, from recruitment to termination and from training to evaluation. As well, WFM applications come equipped with sophisticated forecasting capabilities, workflows and business intelligence tools; all designed to make the task of managing labor more efficient and more intelligent. The ultimate goal of these applications is to enable users t

  • Optimize the labor force
  • Reduce the cost of administrative tasks required to manage labor, and
  • Enable the practice of strategic HR

Standard WFM Application Offerings
There is no one set of features that makes up a WFM system. Each vendor offers different features and functions. Vendors also vary in the delivery of the application. Some offer an all-or-nothing suite of applications. More often, a vendor takes a modular approach to its WFM offering. Clients can purchase components or the entire suite. Clearly, vendors are banking on the hope that clients will purchase the latter.

Most WFM systems offer the following features:

Forecasting: Sales forecasts can be imported to or generated by some WFM systems, thus improving the accuracy of the scheduling process. Forecast-based schedules enable managers to better match schedules to the expected workload.

Complex Criteria-Based Labor Scheduling: In most WFM applications the user has the ability to set complex job rules and criteria for scheduling. These include employee availability and preferences, as well as scheduling rules, such as labor drivers and labor laws. Schedules can be prioritized by employee skill level, wage level, required hours, etc. WFM can also schedule across a property or enterprise. The ability to set secondary job and location preferences enables managers to easily borrow staff across departments and business units, thus improving the utilization rates of the employee.

Once these rules are set, the system creates, in seconds, a schedule that might have taken manager hours to develop previously. Further, these applications generate alerts regarding conflicts with employee availability or scheduling rules.

Time and Attendance: Interfaces to legacy or bundled time-keeping devices feed punch data into time and attendance modules. These features facilitate punch validation. Reporting capabilities generate alerts if an employee has exceeded the bounds of when they may clock in or out. Additionally, managers can monitor employees’ adherence to the schedule and make changes before they are committed to payroll.

Workflows: Through online collaboration and alerts for overdue tasks, workflows reduce turnaround time for document processing and repetitive tasks.

Payroll Processing: Though most hotels outsource payroll, some applications offer this feature. At a minimum, most store wage and tax deduction information export to another application.
Performance Reporting: Sophisticated reporting functionality provides users with vast amounts of information on any number of parameters.

Employee Life Cycle Management: WFM applications with this feature track employees from recruitment to termination. This includes maintenance of employee data, training management and reviews. This streamlines the recruiting process and enables operators to better assess workforce needs. With tracking of employee skills and abilities, managers can quickly determine who within the organization is available to fill a need, before unnecessarily hiring new staff.

Electronic Data Management: Electronically stored employee files and records practically eliminate the burden and risk of paper-based systems. The centralization of information offered by a Web-based WFM application further increases efficiencies by facilitating data sharing across an enterprise. Access to employee data, such as performance and reviews, can prevent undesirable employees from securing a position at another unit in the future.

Self Service: Customizable dashboards allow managers instant access to the reports and metrics most relevant to them. Through similar portals, employees can check reviews, schedules, trade shifts, request and view approval of time-off and change personal profile information. In addition, managers can communicate information to employees such as job descriptions and process definitions.

Benefits of WFM
The benefits of the previous features are best discussed in the context of the limitations of the current HR environment in most hotels and restaurants.

At best, the functions of managing labor such as scheduling, payroll and recruiting are handled via a series of stand-alone software packages. Some very tech savvy organizations may have undergone a major ERP implementation with human resource functions. Often these packages do not provide benefits at the site level. So while you might have great benefits tracking at the corporate level, the site manager still has a hard time keeping overtime under control, and is so mired with administrative work that she cannot focus on improving the productivity and morale of her staff.

At worst, labor is managed through an elaborate system of paper and intuition. This type of system relies too much on the knowledge of the manager and is highly prone to error and compliance issues.

Both of the above scenarios have serious limitations, leading to:

  • Excessive busywork for managers – no time for value-add activities with associates and customers
  • Errors and compliance issues
  • Inappropriate staffing levels
  • Reactive vs. proactive cost management
  • Employee frustration and turnover
  • Lack of strategically relevant information

A well-integrated WFM application enables a hotel company to operate beyond these limitations; thus reducing the overall cost of managing the labor force without sacrificing service or satisfaction. Through the improvement of operational efficiency and facilitation of business intelligence, WFM systems allow operators to optimize the labor force, reduce the cost of administrative tasks required to manage labor and enable the practice of strategic HR.

WFM: Operational Efficiency
Appropriate use of a WFM has been shown to improve operational efficiency on two fronts: front-line staffing costs and productivity and administrative costs and productivity.

The key in regard to front-line staff is the ability to optimize the labor force. Features such as forecast-based scheduling and criteria-driven scheduling help operators find the optimal level of staffing and allocate employees to appropriate value-added tasks. The focus is not on simply slashing costs, but on optimizing labor spending by more effectively utilizing the labor force.

At the administrative level the primary benefits arise from the integration and automation of labor management tasks. By automating simple tasks such as tracking employee information, benefits and tax rules and more complicated tasks such as payroll processing and screening of prospects, administrators and managers are relieved of a large portion of their day-to-day work. This reduction in time spent managing tactical and administrative issues means management can focus more on employees, customers and value-added endeavors such as strategic planning.

Further to reducing costs and improving productivity, one can argue that a WFM application can help boost employee satisfaction at both the front-line and managerial levels; thereby contributing to reduced turnover. The features discussed above can help to create a more satisfying work environment on a number of levels, including reduction of busy work, better responsiveness to employee needs and preferences and matching employee skills with roles and demand.

Limitations
As with any technology, no WFM system is fool proof. Because they are data intensive, they require significant time in setting up the initial databases. Further, the ability to establish various scheduling rules, criteria and parameters, requires careful consideration and input.

In addition, there are the usual issues such as resistance to change and poor change management. As with any IT implementation, buy-in at all levels is essential to ensure the success of a WFM system. If these risks are mitigated, a WFM can prove to have a great impact on a hotel’s financial performance.

Figure 1. Is WFM Right for You?

  1. What is the opportunity?
    • How complex is your workforce management – locations, employees/location, roles/location, pay rules/employee?
    • What is your current labor cost including HR processes?
  2. How efficient is your management process?
    • Do your site-level managers spend more than two hours a week on labor management?
    • How many error corrections are processed in your system?
    • What is the cost of workforce management as a percentage of labor cost?
  3. How effective is your management process?
    • Is your reporting information actionable?
    • How common are under/overstaff scenarios – is it visible?
    • Is your forecast data from key staffing drivers automated?
    • How do turnover, mis-punches, inappropriate staffing and overtime contribute to your labor costs?

Alanna Klassen is senior analyst, hospitality industry for Radiant Systems, Inc. She can be reached at aklassen@radiantsystems.com.



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