What is workforce management? Different departments have different ideas

The term “workforce management” may be a common term around the office, but that doesn’t mean it’s well understood.

A major challenge is that IT, HR, Finance and Business Operations —  the departments that each have control over some aspect of workforce management —  think about it differently. There is not a consistent definition among professionals in these groups, said Lisa Disselkamp, a managing director in Deloitte Consulting’s Human Capital Practice.

While workforce management used to be a more simple term — mostly encompassing payroll, timesheets and scheduling — now it encompasses a broader array of duties including recruiting, onboarding, training, technology and more, she said. Some of these duties are owned by HR, while others are owned by IT, finance or operations.

Now, workforce management is a business function with many stakeholders, and this can cause confusion or disorder among these departments, Disselkamp said. 

Meanwhile, workforce management has also shifted from purely transactional to strategic, she said. When she talked to clients 5 to 10 years ago, conversations revolved around issues like, ‘‘I have to fix my timekeeping because payroll is not right or there are errors.”

“You were trying to fix broken processes,” she said. “Today the difference is the outcome. The outcome is ‘I’m spending too much on labor and workforce management. I need processes and I need to hold people accountable to the results the business is interested in.’ The transaction is just how I get the result,” she said. Essentially, workforce management now hinges on owning specific business outcomes versus owning processes.

Conflicts of ownership

Disselkamp explained how different departments may look at workforce management: HR looks at it from hire-to-retire and the HR functions in between like onboarding, training and scheduling. IT thinks about the platforms used to enable workforce management and think about questions like “Am I delivering good technology? Is the system performing properly? Am I assigning people access to the system?”  Finance deals with costs and funding. And business operations thinks about the day-to-day tasks and how to allocate work. 

Also read: Workforce management takes time and effort 

Different departments can share a set of metrics to show how they’re performing rather than relying on different numbers, Disselkamp said. Shared metrics helps unify departments under the same workforce management goal.

For example, grocery stores are famous for bad schedules, she said. From the workforce management perspective, some grocery stores just don’t honor that social contract with employees who need predictability and good schedules to plan their life around.

Management can ask themselves the question, “Can I translate good schedules into financial outcomes?” Disselkamp said. And the answer is yes. This provides the HR and finance departments to work together toward a common goal, combining scheduling and finances. They can connect data like schedule scores versus turnover, which has the potential to make the case for better schedules because turnover costs a company a good amount of money. 

Juggling 4 types of employees

Not only does workforce management mean different things to departments, but it also means different things for hourly/shift workers, salaried workers and contingent workers, Disselkamp said. Front line managers may struggle when they manage all three types. Their definition of workforce management might be how they, on a day-to-day basis, allocate the work that must be accomplished and by which type of worker. Does the company have the right systems in place to manage all three employee subsets? How do you allocate shifts and adjust workloads for types of workers for whom you have different legal obligations?

Further, the rise of nonhuman labor through automation, artificial intelligence and robots complicates workforce management more, Disselkamp said. Sometimes bots need system access just like human users do,  and so they need their own individual “identity” to enter a system and do certain work. In situations like this, Disselkamp said, a front line manager essentially must manage four types of workers — robots included. 

“I think it’s a fascinating issue, and we don’t have the leading practices yet,” Disselkamp said. 

Potential solutions for modern workforce management 

While labor has traditionally be thought about from a supply-and-demand perspective, now the interesting thing about workforce management is the trend of looking at it more from the perspective of the employee experience, Disselkamp said. Employees need to work a certain number of hours a week and know their schedule ahead of time so that they can plan the rest of their life around it. 

A principal called “schedule equilibrium” — an employee-focused way to score workforce management from an employee’s perspective —  can help with that, Disselkamp said. There are three main ideas behind schedule equilibrium: predictability, stability and adequacy of hours.

In workforce management today, companies need to honor the social contract with employees and contractors and create good schedules, she said. 

“A schedule is like a purchase order for your labor, and timesheet is like an invoice. So if we think about workers like we do suppliers, we want to develop good relationships with them. And that means we have a business relationship with them where we are providing work and income and workers are providing us with their labor and availability. People want to be empowered to say when I work, how much I work [and] what I earn,” she said.

Another leading practice in workforce management is developing a workforce management office, or WMO, she said. A WMO is a department that sits high enough in the organization to have executive-level availability, and they’re in charge of tasks like what the organization’s best practices for workforce management are, what enabling technology there needs to be and which staff members will take on specific duties or responsibilities. Further, the WMO department is held accountable to certain metrics and performance outcomes, like any other department. 

“Staff it with people who specialize in workforce management. That’s their job. It’s not part of their job,, it’s not something they do as part of a committee — it is their full-time day job,” she said. 

Further, this could help organizations whose operations, IT, HR and Finance departments are not on the same page about workforce management. 

“[It’s] being managed by all kinds of people and we don’t know what good looks like. We don’t have standards, and it’s hard to come together and agree on what should happen first and where we should spend money to improve workforce management,” Disselkamp said. 

Also, a trend that has emerged in the past five to 10 years is the position of Director of Workforce Management, she said. 

Daniel Smitley, director of workforce management and analytics at World Travel Holdings, has worked with the organization for five years but became its first director of workforce management only three years ago. Prior to that, the highest person in the organization with “workforce management” in their title was a manager. 

Smitley’s team is responsible for scheduling call center agents and forecasting calls, he said. They also manage agents’ time off and any reporting associated with that, and their team is directly invested in the finances behind the schedules. 

Similar to Disselkamp’s “schedule equilibrium” solution, employee experience is a consideration for World Travel Holdings’ workforce management team when it creates schedules, Smitley said. The call center environment can be rigid, and he wants it to be more relaxed for these employees. Depending on the season, there are about 700 call center employees, most of whom are hourly, he added. 

“Work-life balance is my passion, and as the director of workforce management, I make sure that’s a key lens that my team looks through,” he said.  “We’ve always cared about our agent experience, and we’ve continued to progress toward giving them more autonomy and empowerment to create their own schedules.”