In the “old days,” workforce management primarily meant tracking employee time and attendance. In fact, time and attendance systems were among the first to be adopted by businesses. However, as workforces became more complex and technology evolved, workforce management expanded to include absence and leave management, scheduling and budgeting, and advanced reporting.
Today’s businesses have widely adopted technologies supporting these functions. Our 2023-2024 HR Systems Survey found that 85% of companies had some kind of time and attendance system in place; 73% had automated absence management; 66% had automated leave management; and 41% had some kind of scheduling system.
Interestingly, we found this category to be one of the most volatile in terms of replacement plans. Our survey found that 31% of companies planned to replace one or more of their systems in this category within the next 12 to 24 months, and another 28% had active RFPs in progress.
In this month’s column, I’ll discuss what’s driving replacement plans and some of the innovations solution providers are bringing to the market.
In the workforce management tech category, there are no one-size-fits-all solutions. For instance, scheduling for retail is very different from what’s needed for healthcare, where shift differentials, employee credentials, union compliance and other factors must be considered. Workforces now comprise full-time, part-time, remote, hybrid and contingent employees. Compliance laws and living costs vary widely around the world. Therefore, solutions must either be tailored to the needs of specific industry niches or highly customizable.
We found that only 21% of survey respondents thought their systems always met business needs and impacted HR outcomes. The biggest shortfalls were the inability to customize (highlighted by 37% of respondents), an overall lack of functionality (34%) and inadequate reporting (32%).
We also hear customers complain about poor employee and manager experiences, a lack of scheduling flexibility (a big deal for many employees), problematic integrations with other key systems such as payroll and HRMSs, synching issues and inadequate support.
Additionally, many of the systems currently in place are on-premise solutions implemented years ago. Major market players such as UKG and ADP are actively encouraging their customers to move to newer cloud-based solutions and plan to sunset their legacy systems.
Exciting innovations are here—and more are coming
But by no means has workforce management tech reached its peak. Innovation is everywhere, particularly in the use of AI. In fact, we believe this category could be where AI brings the biggest, fastest impact on work and HR processes.
For instance, most scheduling solutions currently in use are based on limited historical data and rule sets. AI will make these solutions even smarter by enabling shift swapping; fast-tracked approvals; scheduling based on factors such as compliance requirements, overtime rules and skills; employee preferences; and even proactive replacement suggestions for last-minute openings. Natural language chatbots, tailored specifically to different employee/management audiences, and consumer-grade mobile experiences will boost adoption and streamline time-consuming work.
As one example, Workday is incorporating many of these capabilities into its unified workforce management solution. For instance, the solution’s demand forecasting capabilities would allow retailers to predict labor needs down to 15-minute increments using data from prior sales, register information and foot traffic patterns.
Another big area of opportunity is skills management. AI-enabled solutions can provide real-time data on how and where skills are being used and a better understanding of how they actually impact work.
However, despite all the hype and conversation around AI, last year’s survey uncovered some interesting trends related to actual use. Thirty-four percent of survey respondents said their companies didn’t have an AI strategy, and 30% didn’t know if they had one. Forty-one percent said that lack of knowledge was preventing them from taking advantage of AI, 31% cited privacy concerns and 30% said cost was a prohibiting factor.
These numbers make it clear that more understanding and guidance about AI are needed in order for companies to maximize investment value. And while HR professionals need to be looking for ways to educate themselves, vendors also need to step up and provide more information. The sophisticated solutions currently under development will require much more assistance and support in setup and ongoing use than what vendors have become accustomed to providing.
What to look for in a new (or current) system
In addition to the usual advice we give when talking about RFPs, below are some specific tips to help guide decisions about replacements and new investments. Since the workforce management tech category is especially well-suited for innovation, be sure to get a very detailed product roadmap from any vendor you’re considering.
An important note: Even if you’re not planning to replace any of your systems in this category, we urge you to take a second look at the functionality of your current solutions. We often find that customers don’t take advantage of all available features. Talk to your solution provider to make sure you’re not missing anything.
- It is critically important to assess a system’s integration and real-time synching with payroll, leave, absence and benefit solutions. Integration issues are one of the top reasons for customer dissatisfaction.
- Include multiple use cases for employee, supervisor and administrative workflows. Be sure use cases cover all employee types, work locations and business units. Don’t forget to include the use of mobile devices.
- Look for AI-enabled schedule creation that is highly customizable and allows for adjustments to logic.
- Carefully evaluate all user experiences. These applications should be as easy to use as airline booking or online shopping sites.
- Be sure to walk through the setup and configuration processes for each category of user and understand the available support. Ongoing support and guidance are critically important at this stage to ensure the system is set up correctly and tailored to the exact needs of your business and workforce. You also want to take full advantage of all available features.
- Know how all levels of help requests are handled by the vendor. Also, evaluate available help-related tools that that provide detailed walk-throughs, data entry instructions and general system knowledge.
- Evaluate the available analytics tied to time and attendance, schedule changes, and leaves and absences to ensure you’ll be getting a full picture of workforce activity.
- Activity and project tracking aligned with schedules and skills is highly useful. Even if this functionality isn’t on your immediate wish list, it is functionality that you may want to adopt in the future.
- The same thing goes for scheduling and assignments based on skills and/or certifications. While only a few solutions currently do this, it would be wise to know if your vendor has this functionality in its product roadmap. Note: In order to work, integration with a strong skills management solution would be required for this function, if and when available.
Wrapping it up
I’ve been involved in HR technology for more than 20 years—as a buyer, consultant and analyst. I now have a ringside seat to watch a mature application category massively renew itself by leveraging AI and other innovations to positively change the traditional workforce, time-tracking and scheduling functions.
We will be following this category, which includes five application types—time and attendance, absence management, leave management, scheduling and labor budgeting—in our 2024-2025 HR Systems Survey, which is currently active. We’ll use the data collected to identify (by company size) adoption levels, usage trends, purchasing approaches, replacement plans and much more. We also will take deep dives into user experience and vendor satisfaction for all vendors meeting our analysis criteria. (The 2023-2024 report covered 25 vendors in this category.)
I’ll discuss the survey results alongside the information I’m gathering from various vendor briefings at the upcoming 2024 HR Tech Conference in October. I’m confident I’ll have exciting information to share.
Special note: Please take the 2024-2025 survey and contribute your perspective! All participants will receive a copy of the final report, which encompasses eight different HR tech categories. For those currently involved in a replacement decision or considering a change, check out last year’s top vendors for user experience and vendor satisfaction for small, mid-sized and large companies.
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