Workforce planning becomes even more important during in a recession, when budgets get squeezed ever tighter and difficult decisions need to be made. Jessica Twentyman looks at some of the software tools available to help you through it.
Redundancy can be a pretty blunt weapon if not wielded prudently. Without due care and attention, the downsides to a reduced payroll bill are starkly revealed, in the form of customer phone calls that go unanswered, field service appointments that end in 'no-shows', projects that run on way beyond expected completion dates – not to mention the stress and resentment created among remaining staff left to deal with the business headaches created by understaffing.
In a year of widespread layoffs, how many organisations would take workforce-cutting measures that create more problems than they solve? The answer is quite a few, warns Dilys Robinson, principal research fellow at the Institute for Employment Studies (IES) and author of the IES' 2008 Guide to Workforce Planning.
"When companies are under pressure to shed workforce and cut payroll, it's often the case that they end up getting rid of employees they actually need to keep to staff vital business functions," she says.
"Staff cuts may be unavoidable at many firms, but those that don't measure their likely impact on day-to-day operations and on projects that are already underway could find themselves forced to fill the resulting gaps by paying more overtime, or even using contractors at a higher rate still."
What is needed are tools that enable a company to forecast its workforce requirements ahead of time, taking into account not just numbers of employees, but also the likely demand for their individual time and skills. Even better is when they can enable HR managers to create 'what-if' scenarios that test various redundancy options against business trend predictions.
That's a huge challenge, but it's one that plenty of software vendors claim to solve. In recent years, a lively market for technology tools has grown up around the need for better workforce planning, encompassing the largest names in HR software, such as Oracle, plus a host of smaller vendors that focus on specific business needs and niches, including WorkPlace Systems, Kronos, Sabio, Infor Workbrain, Softworks WorkForce and ClickSoftware.
When choosing between a baffling array of available workforce planning tools, it can help to sort your organisation's particular needs into long-, medium- and short-term categories, advises Paul Lambert, who leads management consultancy PA Consulting's work in the areas of workforce planning, talent management and resource management.
In this scenario, long-term needs demand tools that enable a company to plan how the company will attract and retain the best talent over the coming years, while medium-term needs demand tools that will help it ensure that the workforce it has in place develops along the right lines.
To meet short-term needs, what is required are tools that managers can use to decide when, where and how to deploy the current workforce – an area often referred to as workforce optimisation or scheduling. The most important point in choosing a workforce optimisation or scheduling tool is to find one that can take into consideration all of the factors that managers from across the business need to take into account when making those decisions: employees' contracts and preferred working hours, their skills, the cash available to pay them and the tasks or shifts that need to be covered. And that information can come from a whole host of existing systems.
Take, for example, supermarket chain Somerfield. Prior to its takeover in March 2009 by The Co-operative Group, the company had a problem with workforce planning that it urgently needed to solve. Fixed-hours contracts for employees across its 920 stores had created inflexible working patterns which meant that shop managers sometimes struggled to ensure they had enough staff available to serve customers promptly on some days.
That problem – combined with the fact that absence levels were deemed to be too high – led Somerfield to software company Kronos. To create the optimal schedule for each store, Kronos's tools draw actual sales figures from Somerfield's point of sales (POS) systems, stock delivery information from its logistics applications and employee data from a number of key HR packages. Only by using this full gamut of data can Kronos match forecast trading levels with the unique customer demand patterns of each store in the most effective way. Following the deployment of Kronos' software, Somerfield was able to cut its annual overtime payments bill by £2.3m.
Workforce optimisation is an area where the retail industry has historically led the charge, says Simon MacPherson, senior director of business development and operations at workforce management software company Kronos.
"Retail operations have always needed to deal with seasonal peaks and troughs and to deploy staff accordingly – for example, in the run-up to the Christmas shopping period," he says.
"But we're now seeing more demand for workforce management tools from companies in industries such as manufacturing and distribution. They're taking principles such as just-in-time manufacturing – which focuses on having available the right components in the right place at the right time to assemble a product – and starting to apply it to workforce issues."
Anglian Water is a case in point. Until it deployed employee scheduling software from ClickSoftware, the utility company was struggling to co-ordinate a team of 1,180 field engineers across a range of repair, new build and maintenance projects – with the result that customer service and satisfaction levels were unacceptably low. The tools from ClickSoftware use data from a range of systems, applications and products (SAP) applications – including HR and asset life-cycle management modules – to assign individual engineers to different jobs, according their location, skillset, current workload and the tools they carry with them.
The upshot is that they spend more time maintaining or repairing assets and less time travelling to jobs. Plus, Anglian Water has been able to cut overtime payments by 11% and significantly reduce its reliance on third-party outsourcing partners to deal with work such as leakage detection.
"We have also eliminated [the problem of] technicians arriving on the job with the wrong skills, tools or materials because of better planning, scheduling and deployment," says David Cooke, Anglian Water's director of water services.
Other companies might be wise to follow Somerfield and Anglian Water's leads. Effective scheduling needn't be a case of throwing huge numbers of people at a particular business goal, but of ensuring that the right people are deployed on the task in hand. And at a time when many organisations are struggling with the repercussions of redundancy, the pressure to use their remaining people assets effectively has never been greater.
Case study: Addison Lee
The company call centre is an environment where the use of workforce optimisation tools has really taken off. Here, the term is used to refer to a whole family of applications that deal with all aspects of running an effective call centre team, from recording and quality assurance to scheduling agents' shifts. It's a market niche that has been estimated to generate more than US$2bn (£1.2bn) in worldwide sales each year, according to analysts at market research company DMG Consulting.
These applications are widely used in the call centre industry, where their benefits are well understood. So when Chris de Souza joined London-based minicab firm Addison Lee in 2007 as the company's call centre manager, he immediately recognised that something needed to be done about occupancy rates (the proportion of time that staff were actively engaged on customer calls), which were hovering at around 46%.
"Our approach to scheduling was to get in as many agents as possible when we knew it was going to be busy," says De Souza. "While that meant we were able to deliver an unrivalled service level, we were also paying a bottom-line penalty due to overlapping shifts, excess occupancy and unplanned over time."
At a previous employer, he had used tools from Sabio, a specialist in workforce optimisation for call centres, and felt these would offer Addison Lee a better alternative to the time-consuming spreadsheets that he and his team were at that time using to schedule shifts. Since using Sabio's consultants to implement Verint's Impact 360 workforce management software, Addison Lee has seen occupancy rates lift by around 10%, while overtime payments have fallen to give the company a 30% overall saving on its annual staffing costs.