Workforce management metrics are now a rudimentary component of any workforce management strategy.
Monitoring the metrics of workforce management can help ameliorate operational costs while also ensuring positive yields for the contentment of your team as well as the outcome of products and sales.
For businesses to keep their productivity high in the face of challenges such as international lockdowns, asynchronous toil, and hybrid schedules, they ought to implement workforce management metrics.
There is a hodgepodge of methods for measuring these metrics and KPIs, but which ones are the most significant?
Here in this article, we will dig through the 5 most influential workforce management metrics and key performance indicators (KPIs) that you should be focussing on for your company.
Why Keeping Tabs on the Performance of Your Workforce Is So Crucial
HR technology can improve workforce management, resulting in cost savings both immediately and over the long term as a result of increased employee engagement and decreased turnover rates.
The use of workforce management software in call centers is well-established and widely recognized as an essential tool for tracking, scheduling, and planning.
However, many other types of scheduling-intensive businesses, such as retail and even manufacturing, are beginning to see the benefits as well.
One example of this is the healthcare industry. In addition to this, its application has expanded outside the realm of automated scheduling and ensuring that it complies with service-level agreements.
It is now able to monitor patterns to predict and optimize staffing needs, including the management of contingent workforces, in addition to ensuring compliance with labor legislation.
The correct software for managing the workforce may keep employees more actively involved by offering them the ability to schedule their own work, as well as making it simple for them to request time off and keep track of their accruals.
According to research provided by Oracle, the majority of company executives devote ten percent of their time or less to improving labor management methods, although personnel costs frequently account for more than half of operating budgets.
You can make use of a variety of key performance indicators (KPIs) to assist you in monitoring your workforce management; nevertheless, it is essential to select the KPIs that are most suitable for your firm.
Workforce Management Monitoring Obstacles
Absenteeism, over-staffing or under-staffing, properly tracking time (both in terms of hours worked and paid time off) and ensuring compliance with labor regulations are just some of the challenges that organizations face when attempting to manage their workforce.
Many of these difficulties stem from an inability to easily collect, view, and analyze data of their employees.
For example, many companies use Excel to handle their calendars, but this software does not take into consideration requests for employees to take time off or specific employee requirements for the hours that they can work.
This requires employees to trade shifts “off the books” over the phone or via text message.
Sometimes shifts won’t have anyone working them at all. If that is the case, it can be difficult to ensure that the individual doing the service is compensated appropriately.
When shifts are swapped around, employees may become eligible for overtime pay without the boss is aware of it.
Furthermore, if the business makes use of software to monitor these aspects, that software isn’t always compatible with other systems, meaning that the data it collects can’t be accessible without the assistance of a member of the human resources department.
Because of these problems, corporate executives may be unable to recognize and address potential inefficiencies in the way they manage their personnel.
In a nutshell, the following items fall into the category of challenges:
- Over- or under-staffing
- Maintaining an accurate time log
- Ensuring full compliance with all applicable labor regulations
- Minimal access to data
Advantages of Monitoring Workforce Management
The entire workforce management process is simplified by automating data collection, including tracking time spent on projects, payroll data collection, guaranteeing accurate pay codes, and tracking time off.
When historical and real-time transactional data is in a single database, a corporation can combine that with information on external trends and patterns to optimize workforce numbers.
It also allows employees to check their time off balances and accruals, get shifts covered, or pick up shifts on their own, ensuring that they are reimbursed appropriately for all of these activities.
To better match supply and demand, this information can be utilized to develop timetables that correspond with foot traffic at a store or call volume at a call center.
Keeping track of staff management benefits firms in the following ways and more:
- Streamlined personnel management procedures
- Easier trend tracking
- Employees can view their accrued time off
- Easily modify coverage or trade
- More precise compensation
- Creation of precise schedules to match a hectic schedule
5 Key Performance Indicators and Metrics for Workforce Management
A company can cut expenses associated with labor and compliance by measuring the key performance indicators (KPIs) that are described below (or noncompliance).
Managers have improved visibility into data and trends, and staff has access to cutting-edge technology as well as the optimal working environment in which to carry out their responsibilities.
As a direct consequence of this, they are more productive, generate a greater number of sales, and provide superior service to their customers.
Employees that are engaged in their work tend to remain with a company for a longer period of time, which lowers the costs associated with employee training and onboarding.
The following is a list of important personnel management metrics that firms can monitor and potentially link to various KPIs:
A reliable and tested method for determining how much work your team is actually accomplishing.
A formula for assessing productivity that is straightforward to understand was highlighted in a recent issue of the Houston Chronicle.
Although time-tracking tools and methods are far less analytical, leaders of smaller teams can nevertheless think about using them to develop awareness around office productivity.
Encourage accountability among employees without resorting to heavy-handed micromanagement by having them provide a weekly timesheet that includes a list of everything they worked on.
This can be as simple as requiring them to fill out a time sheet.
Any firm might incur costs as a result of employee turnover in a variety of ways, including decreased productivity, increased expenditures associated with training, and the loss of knowledge.
Therefore, it is indispensable to constantly inspect both your employee retention and attrition rates for improved personnel management.
While it is true that employee turnover is often considered to be a negative trend, it is equally crucial to identify who is departing your company: your top performers or your worst performers.
Because of this, analyzing the high-performer turnover rate and developing methods to retain your top performers might be even more illuminating metrics to use in your business.
To determine the extent of your company’s financial loss, take the total number of high performers who left within a specific time period and divide that number by the entire headcount of average high performers in the company.
The Revenue Per Employee
Any successful firm must be profitable, and because of this, it is essential to keep track of how much income is created for each employee.
To arrive at the answer, merely divide the entire revenue by the total number of employees.
This figure not only assists in determining what employees contribute to the bottom line, but also provides insight into determining how much it costs to replace an employee who leaves the company because of attrition.
The Total Expenses associated with the Workforce
This is the aggregate cost of all workforce-related expenses, which includes all compensation, benefits, and other costs associated with full-time workers as well as contingent workers over a specified amount of time.
This statistic assists in painting a more accurate picture of your workforce cost and can assist you in making decisions regarding your workforce strategy that are more informed, particularly concerning staffing.
The ratio of its effectiveness.
Calculate the amount of gross profit that the company makes for every dollar that it spends on salaries for full-time and contingent staff so that you can keep track of this statistic.
W. Michael Hsu, an entrepreneur in the field of accounting, was recently profiled in the RhodiesWorld online magazine.
In the article, he emphasized the significance of computing the effectiveness ratio.
On every given day of the week, he emphasized that “results and value-add trumps hours of labor.”
It is preferable to measure profit against time since we want the team to perform more efficiently rather than for a longer period.
Without a shadow of a doubt, what is measured is what gets done. Results may be driven more effectively with the use of metrics, which can also help establish the framework for ongoing improvements.
In the end, it’s a win for the bottom line of your company as well as a win for the individuals that perform exceptionally well for you.
Every company has to have metrics or key performance indicators (KPIs) for managing their personnel.
It is essential to give serious thought to it in all sizes of businesses, from the smallest to the largest.
These metrics and key performance indicators (KPIs) will assure the performance and productivity of the employees, and they will also provide you the opportunity to look after the performance of the employees as well as the overall objective of the firm in a more comprehensive manner.
If you are the owner of a company, regardless of how big or how small it is, you must put these measurements and KPIs into practice in order for your company to continue to prosper in this modern age.