A fall 2005 report from investment firm Sanford C. Bernstein & Co. made the case that workforce management tools can "achieve the elusive and seemingly contradictory goal of lower labor costs combined with higher levels of customer service" for retailers.
AMR Research recently said the fastest-growing segment in HR software is "workforce scheduling and optimization," a grouping that includes time-and-attendance tools, scheduling software and applications for deploying employees most effectively. Sales of these applications will grow an average of 16 percent per year through 2010, AMR predicts, rising to $437 million.
The interest in workforce management tools is accelerating partly because companies see employees as the last frontier in their quest to wring out costs, says Christa Degnan Manning, research director at AMR Research. They’ve already done what they can do with their supply chains and manufacturing operations.
The applications also promise to boost company performance through smarter schedules, she says. "Workforce scheduling is hot because it’s not only saying, ‘Who are my good people?’ but ‘How do I get them at the right place at the right time?’ "
The field of workforce management technology has come a long way. Years ago, applications focused on the administrative task of tracking workers’ hours to prevent underpayment or overpayment. The products now include sophisticated planning and scheduling tools. The idea is to create optimal master schedules that match the peaks and valleys of staffing needs, taking into account employee performance, employee preferences and labor rules, such as limits to minors’ working hours.
A key to the progress in workforce management software is recent computing advances, according to the Bernstein report. "As a result, it is possible to generate optimal schedules using both constraints and preferences in an efficient time frame," the report says. "For example, a 10-employee schedule might be generated in 1 to 3 seconds, a 20-employee schedule in 1 to 5 minutes and a 500-employee schedule in 15 to 60 minutes."
According to Bernstein, a retailer with $4 billion in sales, 30,000 employees and 350 stores could save $6.7 million to $16.8 million annually through workforce management tools.
Kronos is the clear market-share leader in workforce management applications. It commanded a 33 percent share of the market in 2004, with no other vendor reaching beyond 5 percent, according to a November report by research firm IDC.
Even so, it faces competition from smaller vendors, including Witness Systems, which focuses largely on call centers, and Workbrain, whose customers include retailers Best Buy and Target as well as British Airways. Toronto-based Workbrain says it saw revenue jump 56 percent last year and expects growth of 15 percent to 22 percent this year.
Workforce management also attracted the interest of HR tech giants Oracle and SAP. Last year, Oracle said it acquired a workforce management application focused on retailers, indicating it would extend the product’s capabilities to other industries.
SAP has scheduling products for the retail and professional services industries. And there may be more to come. One area of focus for SAP is the government sector, including federal and state agencies, says David Ludlow, SAP’s vice president of product management for human capital management. "They’re dealing with shrinking budgets and the need to be more efficient."
Workforce Management, October 9, 2006, p. 36 -- Subscribe Now!