What are the most common workforce management metrics?

 Metrics for managing your staff have become increasingly important in recent years. Costs may be reduced, and outcomes like employee satisfaction and sales productivity can be guaranteed by keeping an eye on key workforce management performance indicators.

Workforce management measures are essential for companies to maintain productivity in the face of worldwide lockdowns, asynchronous work, and hybrid schedules.

There is a wide variety of measurement techniques available, but which ones really matter? In this piece, we'll discuss the key performance indicators and metrics that matter most when it comes to managing your company's staff.

List of most common workforce management metrics

Adherence to schedule

​Adherence is a metric in human resource management that quantifies the frequency and duration that workers stick to their schedules. 

Two examples are employee punctuality and participation in planned events, including meetings, training, and coaching. Managers can see where there are problems with employees keeping to their schedules and take action to fix them with the help of tracking employees' adherence.

Tracking employee adherence is essential for effective workforce management. Managers can resolve concerns with employees keeping to their timetables by measuring their adherence to those schedules. 

Managers must ensure workers adhere to their schedules as precisely as possible to avoid wasted time and output. Monitoring employees' adherence to policies also enables the discovery of trends that can inform strategic workforce planning and forecasting.

Keeping track of labor costs

Costs associated with paying workers, such as salaries and benefits, are quantified here. Workforce management software determines labor expenses by tracking individual employee costs or by calculating total labor costs by the total number of hours worked.

Salary and benefit costs are included directly in the labor cost. Management of the labor force can determine if the business is paying too much or too little on its workforce by keeping tabs on relevant labor cost variables. Furthermore, key performance indicators for labor costs allow businesses to evaluate their effectiveness.

For instance, when labor costs are excessive, that could mean the business needs to rethink its methods to be more productive. On the other hand, if the cost of labor is cheap, the corporation might be able to boost pay and benefits for workers. 

Rate of employee absents

This metric focuses on the percentage of workers absent within a specified time period. Workforce management can measure absenteeism by tallying up the number of days an employee misses work or determining the absenteeism rate for a given division or function.

Absenteeism is an important indicator of employee dissatisfaction, overwork, and problems with management, making it a vital metric for effective workforce management. The organization should look into the causes of frequent absenteeism and make adjustments to make working conditions more pleasant if the rate of absences is high.

Service level, occupancy, and shrinkage are major workforce management key performance indicators that suffer when employees are absent. 

Turnover rate over the years

 Employee turnover rate is the proportion of workers who have left the organization during a specified time frame. The number of employees that leave within a given period of time (say, six months) can be used as a proxy for turnover, which can be quantified by workforce management software by computing the turnover rate for a given division or position.

The rate of employee departure is an important indicator of how content workers are with their current positions and the organization, making attrition a key metric for workforce management. Second, organizations may incur extra expenses as a result of high rates of staff turnover.

Keeping tabs on staff turnover rates can allow you to pinpoint the root causes of employee turnover. Third, if you're already short-staffed, you should look for recruitment indications based on attrition rates. Finally, keeping tabs on turnover can help you fine-tune your workforce management strategies and maintain morale.

Analyzing employee productivity

Workforce management can use this metric to gauge how much work a person can complete in a given time frame. 

How many items are manufactured in an hour, how many sales are made for each worker, or how many phone calls are answered in an hour are good indicators of productivity.

Keeping tabs on employee output is a must for any human resource manager. Monitoring worker output allows managers to see where workers may suffer and provide assistance. You can also identify the most productive workers who should be singled out for special praise. 

Finally, WFM can adapt to a shifting workforce by maintaining employee productivity. 

Rate of abandonment

The percentage of calls that are abandoned before being answered by a representative. It's an important indicator of whether or not your workforce management plan needs tweaking, making it a crucial statistic.

A high abandonment rate, for instance, could indicate that you don't have enough workers to meet your customers' needs. Conversely, if your AHT (average handling time) is increasing, callers are waiting longer on hold before being connected to a representative. 

Monitoring your abandonment rate will help you find and fix these and other problems in your workforce management. 

Data regarding average handle time (AHT) 

This indicator is monitored by workforce management to ensure that all client interactions are dealt with promptly. Customers' satisfaction may take a hit if your average handling time increases because agents are tackling issues they need to be trained to handle. On the other hand, if AHT is too short, the quality of service may suffer.

Furthermore, the higher the AHT, the lower the number of client encounters per employee, necessitating higher staffing levels. 

Because of this, AHT tracking is an integral part of workforce management because it allows for verification that agents are effectively managing client interactions.

Quality of service

Workforce management tools can be evaluated by their ability to keep customers satisfied, and one such tool is the service level. Among the many approaches to measuring service quality, one common metric is the proportion of inquiries that receive a reply within the promised time range.

As a performance indicator, it helps pinpoint problem areas in how the organization manages its employees.

Monitoring shrinkage 

Shrinkage is a measure used in workforce management to account for any time employees spend on something other than their primary duty. 

Time lost due to scheduled activities, including lunch, coffee breaks, training, coaching, meetings, projects, administrative duties, holidays, vacations, and paid time off (PTO), is planned shrinkage. 

In contrast, factors that contribute to irregular staffing reductions include last-minute cancellations, tardiness, "goof-off" periods, technical difficulties, emergency drills, and other disruptions. 

Regarding a company's bottom line, both types of shrinking can be devastating.

Forecasting employee's needs

Accuracy in forecasting is a vital performance indicator in human resource management. Managers can avoid staffing shortages and other problems by anticipating the demands of the business and allocating resources accordingly. Different metrics, such as the percentage of inaccuracy from actual results, the number of wrong predictions, and the average error, can be calculated using WFM to assess the reliability of forecasts.

There are many reasons why measuring the accuracy of forecasts is crucial for human resource management. To start, both the company and its employees can lose out if staffing levels are underestimated or overestimated. 

Furthermore, incorrect predictions might cause wasteful spending and missed opportunities.

Customer satisfaction

It's also helpful to compile information and comments from customers and future customers on the service your staff provided. Compile information after finishing a conversation by phone, chat, or email.

You can only make an accurate assessment of your staff if the measurements and key performance indicators you use to evaluate them are concrete and measurable. 

In most cases, a standardized series of questions with a score rating from 1 to 10 is the most effective method. It's also helpful to ask the employee questions rather than focusing on the company or the issue.

Level of employee satisfaction

Businesses should include workers' opinions in workforce management measures. Compensation, leadership evaluation, stress and mental health, teamwork, business culture, and work-life balance are all common components of employee happiness.

In today's competitive market, it's more important than ever for businesses to care about their employees' health and happiness. In addition to being the moral thing to do, investing in your employees' happiness has boosted productivity, employee retention, and bottom-line results.

Most common workforce productivity metrics

There are several common metrics that organizations use to measure workforce productivity. Some of the most common ones include:

1. Output per employee: This is a measure of the total output or production of an organization divided by the number of employees. It can be expressed in terms of units produced, revenue generated, or any other metric that reflects the output of the organization.
2. Utilization rate: This is a measure of the amount of time an employee spends working on productive tasks, as a percentage of their total working time. It can be used to identify areas where employees may be underutilized or overworked.
3. Time to complete a task: This is a measure of the amount of time it takes for an employee to complete a specific task or project. It can be used to identify bottlenecks or inefficiencies in the work process.
4. Quality of work: This is a measure of the level of quality or accuracy of the work produced by an employee or team. It can be expressed as a percentage of errors or defects in the work, or as a measure of customer satisfaction.
5. Employee satisfaction: This is a measure of how satisfied employees are with their work and their overall experience as an employee of the organization. High levels of employee satisfaction are generally associated with increased productivity and retention.

Most common workforce productivity metrics

There are a wide range of statistics that can be used to analyze workforce productivity. Some examples include:

1. Average output per employee: This is the average amount of output produced by each employee over a given period of time. It can be expressed in terms of units produced, revenue generated, or any other metric that reflects the output of the organization.
2. Median output per employee: This is the middle value of the output produced by each employee, when all of the employees are ranked in order of their output. It can be used to identify outliers or extremes in the data, and to get a more accurate picture of the overall productivity of the workforce.
3. Standard deviation of output per employee: This is a measure of the spread or dispersion of the output produced by each employee. A high standard deviation indicates that there is a large range of output among the employees, while a low standard deviation indicates that the output is more consistent.
4. Percentile ranks: These are used to compare the output of individual employees to the rest of the workforce. For example, if an employee's output is in the 90th percentile, it means that they are producing more than 90% of the other employees.
5. Correlation coefficients: These are used to measure the strength and direction of the relationship between two variables. For example, a positive correlation between output and employee satisfaction might indicate that employees who are more satisfied with their work tend to be more productive.

Why is it important to measure workforce performance?

HR technology can enhance workforce management, leading to lower expenses over the long run due to increased employee engagement and reduced turnover.

Call centers have long recognized the benefits of workforce management software for tracking, scheduling, and planning employee hours and availability. Healthcare, retail, and even manufacturing, all of which rely heavily on schedules, are also starting to experience the benefits.

Its original purpose was to automate and guarantee service-level agreement-compliant scheduling, but its application has since expanded. Now, it is possible to examine forecasting patterns, optimize staffing needs, and ensure legal compliance with labor standards, all while keeping track of temporary workers.

With the correct workforce management software, employees are more likely to stay invested in their jobs since they have more control over their schedules and can more easily request time off and keep track of their accruals.

While workforce expenditures account for more than half of most companies' operational expenses, Oracle reports that many CEOs spend only 10% of their time or less on improving workforce management. It is crucial to select the key performance indicators that will help your firm track workforce management among the many available.

Other important metrics related to workforce management

Compliance risk metrics

Metrics for compliance allow you to monitor the effectiveness of your compliance programs and keep tabs on risks and controls according to the norms of your particular business sector. By focusing on areas of weakness, you may better allocate resources and reduce risks associated with noncompliance.

From a human resources perspective, it's useful since it facilitates early discussion about compliance during the onboarding process. Avoiding problems like excessive overtime for an individual or failing to meet certified payroll standards can be facilitated by providing adequate training and having a thorough awareness of an employee's hours worked.

You not only make payroll less of a headache, but you also reduce risk. Achieving this goal, however, will involve abandoning the use of manual procedures or incompatible computer programs. Instead, you must modernize your timekeeping and payroll systems to comply with laws and regulations. 

This is true for every HR-related activity, as it increases the likelihood of mistakes and wasteful practices on the part of the team.

Business values metrics

By using business value measures, you may assess your firm's value to its customers, partners, and other important groups. You can prove that your items or services will bring in sustainable income and increase your investors' return on investment.

You may illustrate your company's worth by showcasing your overall success in reducing labor costs. On the other hand, you can see where your company can save money on human resources or increase output in some other way.

Because of these metrics, your business can keep tabs on the overall effect on profits and keep improving upon what has already been shown to work.

What are the challenges companies face while tracking workforce management?

Absenteeism, over- or under-staffing, improper time tracking (for both hours worked and paid time off), and assuring compliance with labor standards are just some of the problems that arise when businesses lack easy access to information on their employees.

For instance, many companies use Excel to handle schedules, but this doesn't account for employees' requests for time off or their restrictions on when they can work. Because of this, workers must arrange shift swaps "off the books" via phone or text message. It's not uncommon for shifts to go unfilled. It can be difficult to ensure that the correct wage is paid to the individual working if they do. Changing someone's shift without the manager's knowledge could result in unearned overtime pay.

And if the company is utilizing software to keep tabs on such things, it isn't always compatible with other systems, so employees may need to contact HR to see the data. These problems might make it difficult for managers to identify and address inefficiencies in how their companies handle their workforces.

How can you improve workforce management?

Workforce management features are commonly included in enterprise resource planning (ERP) software suites. Time and attendance information, as well as statistics pertaining to labor management and budgeting, employee absences, task management, project management, scheduling, and forecasting, are all included.

The workforce records and payroll are only two examples of how this technology's data feeds into the heart of human resources management.

Data on workforce members' availability, skills, and eligibility is integrated with budgeting, planning, analytics, collaboration, and rules-based scheduling systems to create effective workforce management software.

Contact tracing is simplified with workforce management software, and schedules may be better tailored to account for capacity constraints and staff safety.

Making investments in workforce management systems can help firms become more resilient. The company can use advanced analytics and forecasting tools to foresee and prepare for its future staffing needs based on past data. But there is also a need to model many possible possibilities, anticipate risk, and make changes to decrease it through scenario planning.

The role of workforce management software

Workforce management software incorporating all HR operations is the ideal approach to keeping track of these key performance indicators and improving HR performance and efficiency. Expanding your business is not at odds with your efforts to remain in accordance with labor laws. Access to up-to-the-minute workforce data will help you avoid the potential consequences of inaccurately tracking labor expenditures while keeping managers informed in real-time.

Since then, they've been able to make educated choices that boost output. Software for managing employees can assist in alleviating some of the difficulties associated with human resources and management by cutting down on the mistakes made by non-integrated approaches. You'll be able to use key performance indicators better to track and analyze data, increasing your ability to increase output, efficiency, and profitability.

Here is what workforce management software can do:

• Labor needs forecasting
• Smart scheduling
• Time tracking
• Attendance and absence management
• Data analytics and reporting
• Mobile workforce management
• Employee self-service 

Wrapping up 

Strategic workforce planning metrics go beyond what is presented here. 

Opportunities for gathering and evaluating the data needed to transform your business into a data-driven one are virtually limitless. Furthermore, you shouldn't let vanity stats fool you. 

Be careful to keep tabs on key performance indicators that can actually be used to move the needle and bring the company closer to its objectives. Finally, workforce management software can aid in keeping track of the aforementioned indicators and may suggest corrective actions.