Across a host of people-intensive industries, such as retail, banking, transportation, government, healthcare and customer service, organisations are looking toward improved workforce management tools and techniques to lower labor costs, increase the efficiency and productivity of their existing labor assets, and deliver improved customer service. Moreover, the growing complexity of coordinating work activities on a global scale, coupled with the need to adjust for changing workforce demographics, has created a greater focus on how organisations allocate their internal resources. At the same time, changes in information technology and more sophisticated process designs have enabled organisations to more effectively forecast and schedule their labor force. These new technologies and approaches are helping firms transform what was once considered an art form into a more scientific discipline.
Given both the complexity of this topic and the potential benefits that organisations can achieve, the IBM Institute for Business Value set out to better understand how companies are realising value from their investments in labor-scheduling processes and technology. This research involved discussions with 11 companies across a variety of industries that are in the process of, or have recently completed, upgrading their labor-scheduling capabilities. In addition, we conducted a review of the recent literature on this subject and obtained insights from several industry analysts and academics who have been closely tracking developments in this area. Numerous companies that we researched highlighted tangible benefits from upgrading their workforce management capabilities (see sidebar).
When asked about the benefits they were expecting from improvements in labor-scheduling activities, interviewees indicated that they were looking for improvement in four areas: cost reduction, revenue enhancement, customer satisfaction and employee satisfaction. But most organisations that we spoke with also recognise that technology investments alone cannot deliver these expected benefits. To harness the potential of their labor-scheduling investments, companies need to focus on issues associated with data quality, organisational alignment and change management.
- Improve data quality - One common message from our discussions was the importance of understanding both labor supply and demand activities at a granular level, to help ensure that the data used was accurate and reflective of actual business conditions. Accurate data regarding the past history of labor-scheduling activities can be used to improve medium- and long-term workforce planning decisions, such as determining the overall workforce size and composition, the cost-effectiveness of hiring from different labor sources, the optimal level of customer service, and the long-term costs of union agreements and company policies.
- Align the organisation - Many of the companies recognised that simply implementing a labor-scheduling system without addressing a range of organisational challenges can put technological investments at significant risk. These challenges must be addressed not only by the organisation's operations group, which is often responsible for the labor-scheduling process, but from many other groups, such as human resources, legal, information technology and finance. Failure to address integration issues can cause other human resource related problems that can decrease retention rates, increase costs and decrease customer satisfaction.
- Manage the change - Labor scheduling represents a window of opportunity for many organisations, yet the effort can be fraught with difficulty, given the amount of change that is required at multiple levels. Employee involvement, stakeholder management, communication and education are all critical components to incorporate labor-scheduling systems into everyday business operations. Managing potential employee resistance was cited as a critical issue by virtually all of the organisations we interviewed. Three groups in particular were cited as stakeholders that required special attention when dealing with labor-scheduling changes: front-line employees, unions and work councils, and managers.
For many companies, investments in upgrading their labor-scheduling practices and technologies have returned significant benefits, in terms of increased productivity and enhanced customer experience. And the lessons learned from these organisations are important for others seeking the same benefits.
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