Every person in HR wants to increase employee satisfaction and engagement while ensuring compliance enterprise-wide. Meanwhile, Operations is focused on increasing labor efficiencies and reducing costs, which may at first glance seem at odds with the HR agenda.
It doesn’t have to be.
A holistic workforce management strategy can make both departments—and your hourly employees—happy. To achieve savings without throwing your employees under the bus, you can manage costs in other places.
Here are 5 areas of opportunity.
1. Control Staffing
Our studies show that for every 250 employees, you have overstaffing of at least 2-3 people per shift.
Overstaffing happens for a number of reasons. Maybe you don’t have real-time analytics that allow you to act on historical demand trends. Perhaps you aren’t keeping your demand needs in mind at the point of scheduling—whether it’s because you don’t know what the demand is, or your paper and spreadsheet processes don’t allow for that level of dynamic scheduling. Your lack of an audit trail could also be to blame; you can’t keep track of how many people are requesting to be added to a shift, and you find yourself saying yes to everyone.
With a cloud-based, automated workforce management solution, you can reduce your workforce by 5-8 people per day—without reducing efficiencies. That’s because you can ensure that you are only staffed to match what you need, during both peak and off-peak times. Real-time employee data lets you easily pinpoint facilities and locations that are consistently overstaffed. On the flip side, you’ll also know when it’s time to hire temp workers, recruit new full-time employees, or distribute overtime to keep up with increased demand.
Speaking of overtime…
2. Stop Unnecessary Overtime
Do you know how much overtime you’re distributing… and how much of it isn’t needed?
Massive overtime overages have been making headlines recently. The MTA spent $418 million in OT last year, creating a staggering 16% increase that went completely unchecked. It’s not just the public sector that has an OT problem—manufacturing has been combatting their skills shortage with excessive amounts of overtime as well.
At first glance, the extra money on the paycheck is great for the employee. But when they go overboard, the threat of fatigue is putting them in danger. Those operating heavy machinery at a plant, driving around on the highway, or operating rail cars for the public should not be putting in a risky amount of hours—but they are.
Considering overtime is time and a half of an employee’s pay, you could very well be hemorrhaging your bottom line and not even realize it.
With automation, your weekly schedules will always sync up with production demand. This allows you to then input company restrictions based on your specific needs to prevent unnecessary overtime, with each employee getting assessed by these rules as the schedule generates automatically. Proper forecasting and real-time alerts on OT trends make it easy to have your management team enforce such rules. Overtime for each employee is automatically logged, so management has a centralized system of record to either settle employee grievances or make sure someone doesn’t go over a safe number of hours.
3. Cut Paper-Related Costs
Organizations that still rely on paper processes consider roughly 27% of their overtime costs to be unbudgeted.
Meanwhile, a paperless office saves about $80 per employee each year in associated paper costs – that’s roughly $8,000 dollars saved for every 100 employees. Eliminating paper doesn’t just cut costs; it improves productivity. A typical employee spends 30-40% of their time looking for written-down information. What a waste of time!
With an easily deployable cloud-based WFM solution, you can more quickly access labor information (demand, schedules, employee information, etc.) from anywhere. Forecasting labor requirements, creating and managing employee schedules to meet those needs, and adjusting for unexpected changes in labor and demand should not be done on paper. You could lose important information by accidentally throwing it in the trash or not keeping the most up-to-date schedule on file; if you’re still using physical timesheets, you are negatively affecting payroll.
By automating this paper process, the real-time shift schedules can be integrated directly with your payroll systems to make sure everyone gets paid properly.
4. Reduce Compliance Risk
It can cost organizations as much as $100,000 each time a federal, state, or even local labor law is created or changed. And that’s nothing compared to non-compliance, which costs businesses $14 million on average.
You can prevent fines through automated scheduling. Manage and mitigate complex concerns around fatigue regulations, industry standard best practices, federal and state work laws, and union rules. Automated processes greatly reduce human error in scheduling, such as too many overtime hours, and ensures schedule fairness. Not only will you mitigate risk and avoid fees, but you’ll also keep your employees happy with the ease of use.
What’s better is that you will have a centralized system of record to audit every keystroke when necessary. Does someone have a scheduling grievance because they claim to never be called in for overtime, despite a certain number of OT hours outlined in their union contract? You can check if they were ever indeed called. Need to make sure that everyone who is scheduled to work a particular job has up-to-date certifications and none are expired? You can check for that. Want to make sure a job swap actually occurred? Yes, you can check that, too.
5. Streamline Processes
We’ve seen that mistakes account for about 1-3% of overall payroll costs. In fact, according to a study done by the American Payroll Association, human error in time card preparation is between 1% and 8%. Meaning that a $500,000 annual payroll means that even a 2% error rate is $10,000 lost in erroneous wages.
So, maybe it’s time to eliminate the need for a manual upload of payroll.
With automation, accurate scheduling data gets sent directly to payroll, reducing manual payroll entry… and a need for a T&A system in general. You can learn more about the trials and tribulations of relying on just a time and attendance system here.
Reduce Costs With Indeavor
Indeavor is our workforce management SaaS solution which offers clients an end-to-end, cloud-based employee scheduling, time & attendance, and absence management system. Workloud integrates with your human capital management and enterprise resource planning systems to create a robust platform that provides you with real-time employee data.
Learn more or request a demo here.
