Workforce Optimization Best Practices for Blue Collar Employers in Labor-Driven Industries

I’ve written SEO-optimized blog posts about workforce management issues for Ascentis for several years. Here is one of those.

The tricky thing about workforce management is remembering how much management it really involves. Getting the best out of your employees isn’t something that just happens — optimizing your workforce for maximum profitability, productivity, and operational efficiency requires an active strategy and the right technology to make it a reality.

Trying to improve workforce management processes is all the more challenging in labor-driven industries. For employers in fields like manufacturing, construction, healthcare, agriculture, and transport, effective workforce management requires awareness of a number of variables, including:

  • Higher than average rates of turnover
  • Complex schedules and nontraditional shifts
  • Complicated labor costing
  • Federal, state, and local compliance requirements

All of those factors can make workforce optimization (WFO) extra challenging for employers in skilled labor industries, but developing a consistent, comprehensive optimization strategy will almost always be worth the effort.

What is workforce optimization?

The aim of a workforce optimization strategy is to combine performance management, technology management, and operations management to create the most efficient workforce possible. Including workforce management solutions in your planning strategies is a must for any business looking to streamline operations and get the most out of their existing employees. A workforce optimization plan allows an organization to do exactly that by taking into account a variety of factors, including:

  • Workforce scheduling
  • Human resources logistics
  • Key performance indicators (KPI)
  • Operational costs
  • Client/customer experience

To borrow a cliché, workforce optimization solutions mean getting your organization to work smarter, not harder. That means developing a business strategy and acquiring the tools and technology necessary to optimize for your specific needs. Let’s take a closer look at a few key areas to consider when formulating a WFO strategy for your business.

Labor costs: Labor is the biggest overall cost for American businesses, and that’s especially true in workforce-driven industries. Before you can begin optimizing your workforce, you will need to take stock of all the costs associated with it. That includes a broad range of expenses that may vary across industries and individual employers. A few common labor costs to account for include:

  • Hourly and salaried employee wages
  • Overtime pay
  • Sick leave, vacation days, and other forms of paid time off
  • Learning management and training programs
  • Payroll tax
  • Health insurance and other employee benefits
  • Equipment, technology, and other supplies

Being aware of how much your organization is spending on all of these labor costs is an important first step toward eliminating waste, setting budgets for hiring and recruitment, identifying productivity gaps, spotlighting areas that can be improved with more investment in automation, and other vital optimization factors.

Complex scheduling: Labor forecasting and scheduling go hand in hand. Effective schedule management is especially crucial in labor-driven industries like manufacturing, healthcare, trucking and logistics. Many businesses in those industries operate around-the-clock and require scheduling systems that go beyond a standard workday. Not only do employers in these labor-driven industries need to cover multiple shifts every day, they also need to be sure that each of those shifts is staffed with fully trained and certified employees.

For example, the human resources team at a busy healthcare facility may need to account for specific patient-based procedures that can only be performed by staff with a particular certification, or who have attained a particular nursing degree. Failure to keep properly certified employees on staff can put an employer at risk of a compliance violation, or even endanger the safety of patients and staff. Analyzing employee data is essential to optimizing an organization’s scheduling practices and identifying areas that need to be improved or overhauled.

Time and attendance: Making a clear-eyed assessment of your workplace’s time and attendance data is at the core of any workforce optimization plan. Automating processes like time tracking and employee attendance records allows your organization to make real-time assessments of factors like staffing and productivity levels for each shift, gaps in necessary skills or coverage, and issues with workers clocking in too early or too late.

Analyzing the data generated by your time and attendance system also helps your human resources team gauge employee engagement. It can even be instrumental in fighting time fraud by making it easier to identify instances of common fraudulent behavior such as falsified time sheets or buddy punching. By allowing your human resources and workforce management teams to have maximum visibility into your workplace’s day-to-day time and attendance activities, your organization can easily identify opportunities for better efficiency and productivity.

Performance management: A big part of optimizing your workforce is being able to make an accurate assessment of where it stands currently. While old-school performance management methods like one-on-one feedback sessions and annual performance reviews still play an important role in many businesses, investing in an automated performance management system is often a more cost-effective approach that saves time and paints a more accurate picture of each employee’s service level.

Especially in industries like manufacturing and healthcare that frequently employ large numbers of workers and see high rates of employee turnover, being able to make real-time assessments of the strengths, weaknesses, and skills gaps in your workforce is invaluable. That data drives workforce optimization efforts, and can also play a key role in boosting employee engagement and improving employee retention.

Maintaining compliance: Employers in labor-driven industries generally have a lot of regulations to keep track of, and staying on the right side of those rules is an essential part of workforce optimization. A business that has difficulty maintaining compliance with laws governing overtime pay and minimum wage standards as laid out in the Fair Labor Standards Act (FLSA) or complying with employee leave rules set down in the Family and Medical Leave Act (FMLA) is likely to also have difficulty with employee retention and workplace morale.

Poor compliance presents a serious risk of significant fines and sanctions, and also contributes to low employee engagement and high turnover. All of those factors make it considerably more difficult to optimize a workforce. In blue collar industries that are also subject to extensive state and local regulations as well as complex union requirements, keeping a close watch on compliance and making the necessary adjustments is vital to any optimization efforts.

Workforce optimization may not always be the easiest goal to accomplish, but it is one that should be at the forefront of every organization’s workforce management plan. Taking a clear, holistic view of all the day-to-day factors that keep your business thriving — as well as those that may be holding you back — is a necessary part of understanding your workplace from the inside out. Applying that knowledge to workforce optimization can not only help your organization increase profitability, maintain compliance, and streamline essential processes. Those efforts will also carry through to your employees, creating a happier, more efficient, and more stable workplace for everyone involved.

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