According to the Bureau of Labor Statistics, inflation rates currently sit at 8.5% and rising. This makes it the highest interest rates have been since the 1980s. As this continues to be a serious problem for both consumers and manufacturers, manufacturers need to make their operations more efficient so they can realize higher ROI in these uncertain times. But, how?
Industry leader PwC states that addressing labor availability and costs is one way to do so. And, an automated workforce optimization tool with built-in labor analytics is one of the most effective ways to do so. But, what is workforce optimization? It’s the practice of right-size staffing and enhancing worker productivity levels. Why should you care about productivity levels? Increased productivity is directly correlated to better profits. We’ll get into those benefits in just a second. First, it’s important to understand what is important when it comes to thinking about workforce optimization.
Staffing the Right Number of Employees
The most difficult but most important aspect to nail when it comes to workforce optimization is right-size staffing. Right-size staffing means having the exact number of employees a company needs to meet demands of what to produce, not more nor less. There are two reasons right-size staffing is key component to achieving workforce optimization.
First, it’s simple math. A large number of employees equates to a lot of money hanging over an organization. More employees mean more salaries, more benefits, and more worker’s comp claims to be responsible for. And, with labor being a controllable cost – this is especially important to get right. Too many employees sitting around with not enough to do negatively impacts bottom lines.
Second, having too few employees can be just as detrimental as having too many. You’ll never be able to reach peak levels of productivity if you have too few employees. And, you may end up overworking the employees you do have to the point where they quit or their productivity suffers greatly.
If your company has a correctly sized workforce, it will increase your operational efficiency. And is now interconnected with Indeavor’s workforce planning tool with the release of the new Labor Demand Planning feature within Indeavor Operate.
What Are Labor Analytics?
Labor analytics encompass the systematic collection, analysis, and interpretation of workforce-related data. This includes metrics on employee performance, attendance, productivity, and engagement. By leveraging sophisticated algorithms and data visualization tools, organizations can gain insights into their labor force’s behavior and trends. These insights enable better decision-making around staffing, scheduling, and resource allocation, ultimately leading to more efficient and effective operations.
The importance of labor analytics in workforce organization and optimization cannot be overstated. In an era marked by economic uncertainty and rising operational costs, as evidenced by the current high inflation rates, organizations need to optimize every aspect of their operations to maintain profitability. Labor analytics help companies identify patterns and inefficiencies that may otherwise go unnoticed. For instance, understanding peak productivity times and aligning work schedules accordingly can maximize output without overburdening employees.
The Benefits of Workforce Optimization
There are numerous benefits that organizations can realize when they optimize their workforce. These include the reduction of excessive overtime costs, avoidance of union violation fees, enhancement of worker safety, and even the ability to attract and retain the right employees. Or to put it simply, a much more positive ROI. Let’s dig a little deeper into the benefits.
Eliminating Excessive Overtime Costs
One of the most important benefits that comes from workforce optimization is being able to eliminate excessive overtime costs. State agencies in New York saw their overtime costs rise by 47.2% in 2022, accounting for $1.36 billion and setting a new record. We know sometimes, you’re going to have to ask an employee to work a shift that’s in excess of their scheduled time. But, $1.36 Billion in excess? Doubtful. An efficient workforce optimization process can help save your company money on labor costs.
Avoiding Union Violation Fees from Inaccurate Shift Scheduling
One in 10 workers in the U.S. is a member of a union. The number of unionized workers grew by approximately 200,000 in 2022, and union election petitions increased by 53 percent from the fall of 2021 compared to a year later, according to data from the Bureau of Labor Statistics. If your employees are unionized, then you’re no doubt familiar with the union restrictions on shift scheduling. The violation fees that your company may have to pay for inaccurate shift scheduling can add up quickly. With Indeavor’s automation capabilities, these violation fees are a thing of the past.
Attracting & Retaining Talent with Advanced People Analytics
Attracting and retaining talent is an important aspect of workforce optimization. In an old-fashioned work environment, it can be difficult to analyze the productivity of each employee and determine which of them is performing well. An advanced people analytics program makes this process easy by providing valuable insights into employee behavior, preferences, and engagement levels.
Indeavor Can Help You Optimize Your Workforce
If you’re looking to optimize your workforce, look no further than Indeavor. Indeavor’s software enables efficient scheduling of your workforce based on demand, availability, and skill sets. It helps you create optimized schedules that match the right employees to the right tasks, reducing overstaffing, overtime costs, and operational inefficiencies. Give us a call today to learn more!
