WORKFORCE MANAGEMENTAND PRODUCTIVITYTHREE HABITS OF HIGHLY PRODUCTIVEORGANIZATIONS

Kevin Prouty, Sr VP, Research and Operations, Aberdeen GroupData courtesy of Ms. Michael M. Moon, Research Director,

Human Capital Management, Aberdeen Group

Ken Madley, Productivity Consultant, Kronos Incorporated

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PACE: How we collect our research

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PRESSURES ACTIONS CAPABILITIES ENABLERS

External and internalforces that impact anorganization’s market

position,competitiveness, orbusiness operations.

The strategicapproaches that an

organization takes inresponse to industry

pressures.

The businesscompetencies(organization,

process, etc…)required to executecorporate strategy.

The key technologysolutions required to

support theorganization’s

business practices.

What are Best-in-ClassCompanies doing

differently?

What pitfalls are theyavoiding?

Why are they achievinggreater success?

What technologies andservices are enabling

them to succeed?

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ABERDEEN MATURITY CLASS FRAMEWORKDEFINING THE BEST-IN-CLASS

Selected PerformanceCriteria (KPI)

Organizational Goals

Employee Performance

Bench Strength

TotalRespondents

- Top 20%

- Middle 50%

- Bottom 30%Respondents are scoredindividually across KPI

Best-in-Class

IndustryAverage

Laggard

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DEMOGRAPHICS - GLOBAL

• Role – 32% HR, 37% Ops, 21% Fin other

• Level – 10% Exec, 72% Manager/Dir, 8% Staff/Other

• Size (employees) - 31% <100, 32% 100-1000, 23% 1000-10,000, 14% >10,000

• Vertical – 34% Service (Software, Consulting, Facilities,AEC firms, etc.), 29% Manuf, 14% Retail, 8% Public,13% Other (real Estate, Utilities, Insurance, etc.)

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FINDINGS…THREE HABITSLeaders tend to balance the metrics they use tomanage productivity

WFM business process automation is what tendsto separate Leaders from Followers

Leaders look at technology as a multiplier toautomating their processes

Bonus - Leaders tend to use scheduling, absencemanagement and forecasting to overcomechallenges, especially ACA

THE ENVIRONMENT

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WHAT DRIVES ORGANIZATIONS WHENMANAGING THEIR WORKFORCE

•Top Driver – Operational Efficiency

•Second Driver – Workforce Flexibility

•Third Driver – Access to labor data

•Fourth Driver – An oldie, but a goodie…labor costs

“We struggle with managing labor costs becauseour systems and processes are not flexible or agileenough to cope with our daily business changes…”~ Store Operations Manager - $1B Wholesaler/Retailer in US

PRODUCTIVITY ANALYSIS

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Metrics Summary Leaders Followers

Workforce Capacity Utilization 97% 89%

Unplanned Overtime as % of all

overtime 5% 8%

Customer Satisfaction 97% 91%

Change in Revenue/FTE over last

year 18% 9%

Change in Profit/FTE over last year 17% 4%

Percent that made Sales Quota in

last year 91% 91%

ProductivityLeaders Lead and Haters Hate

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PRODUCTIVITY PERFORMANCE

• Leaders Lead in almost every category

• Small differences in workforce utilization lead tobig differences in organizational performance.

• Workforce utilization linked to unplannedovertime

• Revenue and profits track well with leaders, butprofits lag revenue in Followers

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MEASURING PRODUCTIVITYLeaders tend towards a balanced approach

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MEASURING PRODUCTIVITY

• Top metric used – Revenue/FTE

• Leaders – Profit and Revenue almost equal

• A service economy – Service level is also key

• Sales Quota usage depends on type oforganization

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MEASURING PRODUCTIVITY…ADEEPER LOOK

• Manufacturing and Utilities– Revenue/FTE,Profit/FTE

• Retail and Distribution– Profit/FTE, Service Level

• Government – Service Level, Mean-time toResolution

• Service – Profit/FTE, Service Level

Operational companies tend to use Revenue/FTEand service companies use profit

ENABLERS AND AUTOMATION

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AUTOMATED LABOR MANAGEMENTPROCESSES

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AUTOMATION OF WFM PROCESSES

• Time and Attendance is almost universal

• Big performance differentiator is scheduling andabsence management

• Analytics and forecasting are a coupleprocesses where Leaders think a little moreout-of-the-box.

• ACA challenges most impacted by automatingthe scheduling processes and forecasting

17© KRONOS INCORPORATED

ACA and Productivity

Pay or Play

Current FT/PTStaff with

Production Mix?

Measure andMonitor

Don’t Wait

Plan and EngageManagement

Reinforce GoodScheduling Habits

Timekeeping

Payroll

HR

Reporting

Current Strategy Act Now Integrated Data

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When it comes to ACA administration, spreadsheets, home-grownreports, and manual calculations will do little to simplify a highlycomplex process with potentially significant financial consequences

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AUTOMATION – IMPACT ON PRODUCTIVITY% = DIFFERENCE IN PERFORMANCE BETWEEN ORGANIZATIONS THAT AUTOMATED A

PROCESS AND THOSE THAT DIDN’T

* - Very little measureable difference or too few responses

** - Time & Attendance is almost universal in usage so no way to accurately measure impact

Productivity MeasuresSchedule

ManagementTime &

AttendanceAbsence/Leave

Management

What is the approximate current level of workforce capacityutilization within your company or organization?

3.0% N/A** 2.0%

What percent of your organization's annual overtime costs areunplanned / unbudgeted?

N/A* N/A** -33%

How has your organization's revenue per full-time equivalent (FTE*)CHANGED in the last 12 months?

15% N/A** 7.0%

How has your organization's profit per full-time equivalent (FTE*)CHANGED in the last 12 months?

N/A* N/A** 29%

What percent of your organization’s total sales quota for the last 12months was achieved?

1.5% N/A** 2.4%

What percent of your customer or constituent's concerns or issuesare resolved after their first inquiry?

N/A* N/A** 7.2%

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AUTOMATION IMPACT

•Automation of all three critical businessprocesses has significant impact on revenue orprofit per FTE

•Automation of Schedule Management and Time& Attendance have a large impact on ACAchallenges

•Automation of Absence Management has avery positive impact on unscheduled overtimeand service levels.

TECHNOLOGY STRATEGIES

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TECHNOLOGY AND WFM

Leaders lead in using technology to extendautomation

Leaders Followers

Integration between WFM

solutions70% 57%

Using or Plan on Using

Cloud59% 42%

Mobility in WFM 92% 69%

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LEADING WITH TECHNOLOGY

•Leaders tend to realize that having siloed WFMsystems is not a good thing…big impact onanalytics and forecasting

•Leaders are also more likely to be lookingbeyond the usual data center approach totechnology and automation…cloud

•Mobility is almost universal amongst Leaders

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WHAT TO DO ABOUT IT…

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FINDINGS…THREE HABITSLeaders tend to balance the metrics they use tomanage productivity

WFM business process automation is what tendsto separate Leaders from Followers

Leaders look at technology as a multiplier toautomating their processes

Bonus - Leaders tend to use scheduling, absencemanagement and forecasting to overcomechallenges, especially ACA

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WHAT YOU SHOULD DO… 3 STEPS TO TAKE

Automate as much of your WFM processes asyou can

Use a balanced scorecard approach likeLeaders…don’t focus on individual productivitymetrics

Use scheduling and absence management toaddress the challenges of ACA

Integrate your WFM systems and get at all thedata in those systems for decision-making

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BONUSTIP:

ADDITIONAL RESOURCES

For more information on this or other researchtopics, please visit www.aberdeen.com

Kevin.Prouty@aberdeen.com /kenneth.madley@kronos.com

www.twitter.com/HCMEssentialsABG

www.linkedin.com/in/KevinProuty