Workforce Management explained
New to Workforce Management (WFM)? Or just curious to learn more about what it takes to get it right? Then you should definitely read on. Get to know every step in the WFM process. Receive helpful tips, best practices and resources to master your WFM journey successfully.
What is Workforce Management?
WFM can be complex, but the idea behind it is rather simple: In essence, it’s less about people management and more about people empowerment. An organization’s employees are its most valuable assets and they should be treated accordingly. WFM puts people in the driver’s seat. It empowers you to standardize processes across departments, align teams and enable the company to head in the right direction without creating silos.
So, what does this mean, actually? Workforce management entails a set of processes that a business undertakes to optimize the schedule efficiency of its workforce. It’s also referred to as an institutional endeavor that helps companies maximize performance and competency across various fields. For instance, WFM inherits and consolidates elements of human resource management, performance management as well as demand planning and -analytics.
The History of WFM
Initially, the focus and popularity of WFM as an organizational discipline was kick-started in the early 1980s. It was primarily focused on streamlining internal processes as well as supply chain management. Since then it has come a long way and found increasing traction in various industries from retail to banking and insurance sectors as well as customer services.
Today, workforce management has evolved into a highly integrated, demand-oriented and analytical approach for small to large-sized businesses that seek to:
- Optimize staff planning
- Increase productivity
- Reduce labor costs
- And improve customer service.
The benefits of successful Workforce Management
Getting workforce management right depends on a business’s ability to streamline internal processes to maximize employee productivity. The latter eventually leads to increased organizational performance.
A successful approach to WFM provides various benefits:
- It empowers your business in effective resource planning
- It can help you with compliance
- It can reduce risk in decision making
- It can lower labor costs;
- It will assist you in increasing workforce mobility
- It gives employees a say in the planning process and reduces burnout, therefore it helps to improve employee retention rates
- And ultimately, it supports you in becoming a more efficient planning team.
In a nutshell, workforce management can pay into three high-level business advantages:
- Consistently high standard of customer service
- Improved employee engagement and reduced turnover
- Maximized schedule efficiency and consequently lower labor costs
… all of which have a positive effect on the business bottom-line.
WFM is a hot topic these days since it can have a crucial impact on business operations and overall performance. Companies who get it right see tremendous cost savings, productivity gains and improvements in both employee and customer satisfaction. Companies who don’t embrace it often see a negative impact on many areas (e.g. resource planning, operational efficiency, employee productivity and overall performance). Some companies will struggle to survive in today’s competitive and fast-paced marketplace.
WFM for Contact Centers
When we speak of workforce management, we always refer to the challenging mission faced by nearly every contact center: Having the right people, with the right skills at the right time and place to deliver the best possible service.
We can break this down into the following elements as part of a holistic and integrated process:
- Forecasting: Forecasting of workload based on historical data
- Scheduling: Creating schedules based on the forecast demand
- Intraday Management: On-the-day-management of plan vs. actual
- Employee Engagement: Involvement of employees into the scheduling process
- Reporting: Analysis and monitoring of the entire process
In the following sections, we’ll introduce and explain to you each of the steps that together make a successful WFM process. You can expect to:
- Get a full overview of what workforce management is all about
- Understand the different steps in the WFM process as mentioned above
- Get helpful and practical examples
- Dive deeper into different tactics and best practices
- Pick up the helpful content and expert advice that we’ve gathered for you
In case you have any questions, also feel free to ask our WFM experts!
Let’s get started.
What is Forecasting?
Forecasting is the foundation stone of workforce management. If you get the forecast wrong, the whole WFM process is unstable. Essentially, forecasting involves mathematical calculations of future workload based on past performance. In a contact center context, it comes down to the projection of contact volumes for a predefined time frame and across different channels (e.g. calls, chat, email and social media).
As a highly analytical discipline, forecasting helps contact centers determine the right number of people to handle the incoming workload and contact volume in the future. It is indispensable in workforce planning to avoid under- or overstaffing by balancing staffing needs against contact volume expectations.
What to consider when creating a forecast
Getting the forecast right, namely increasing the accuracy of projections, is one of the biggest challenges that contact centers face in workforce management today. Therefore it is important to understand what it takes to create accurate forecasts for your business. To help you get an overview, let us walk you through the forecasting process from start to finish:
1. Collecting and analyzing historical data
The first step in creating a forecast is to gather historical data. Specifically, you want to look at call volume or the number of calls offered as well as handle time per interval (e.g. every 15 or 30 minutes) for a certain period. We would recommend considering two years’ worth of historical data to get an accurate picture of the past. This will also allow you to spot trends and monthly/seasonal patterns in the data. The most obvious source for this information is your Automatic Call Distributor (ACD), a telephony software system that helps you route and answer incoming calls. When analyzing the data, you also want to pay attention to data aberrations and anomalies. It is important to determine the reason for such peaks in your data to prepare for manual adjustments.
2. Predicting future workload
With your historical data at hand, you are now ready to generate forecasts by making use of different mathematical methods. Common forecasting techniques involve time-series analyses, averaging methods, intraday projections as well as point-estimate calculations based on variables such as:
- Contact history data (e.g. call volume, number of incoming chats/emails/tickets)
- Contact patterns (average handle time, duration, etc.)
- Holidays, campaigns and other events that impact contact volume
The recommended approach for forecasting used by the majority of contact centers is based on time series analysis. This method takes into account historical information while allowing for the isolation of the effects of trends such as the rate of change as well as fluctuations in the data.
The point estimate approach is the simplest and most basic technique often used by call centers that work with spreadsheets. It has several shortcomings, especially since it does not recognize trends in contact patterns and relies heavily on data normality.
Last but not least, weighted averaging comes close to an actual forecast since it allows you to assign more weight or significance to recent events. Yet, this approach neglects upward trends in your data.
You can apply your preferred technique (or multiple methods combined) to your historical data and past trends to develop a monthly, daily and even half-hourly forecast of your workload. The forecast must include both call volume and handle time predictions. To convert future workload estimates into your staffing requirements such as FTEs (full-time equivalents), you have to multiply the number of calls offered by your average handle time. The latter has to properly reflect the time of year, day of the week as well as the time of the day since call duration can vary. Once you have your monthly forecast in place, you can break it down to get a daily and interval-based prediction. Just ensure to pay attention to weekly and daily distribution patterns since your traffic can spread differently across weeks and days depending on your business.
3. Factoring in business intelligence
In the final step of your forecasting process you want to take a closer look at several factors that can have an impact on workload in your contact center such as:
- Marketing campaigns and promotions
- Operational changes (e.g. billing, logistics, sales)
- Organizational crises (e.g. bad PR, competitive pressure, environmental forces)
- Corporate strategy and tactics (e.g. market development and expansion, new product launches, changes in customer base)
It is important to be aware of both internal and external factors that can affect contact volume and respectively demand that you will have to coordinate and account for in your forecast. Thereby, a good communication process and transparency within your company across departments and business layers are key. Make sure to fuel your forecast assumptions with intelligence about these influencing factors by working closely with other departments such as operations, IT, Marketing etc. This way, you’ll be well prepared to create highly accurate future predictions.
Get your forecast right! In our must-have guide on accurate forecasting, you can benefit from many best practices, tips & tricks.
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What is scheduling?
While forecasting is the first step in the WFM process, scheduling is the centerpiece of every WFM strategy. You’ll want to convert your forecasted staffing requirements into daily, weekly and even monthly shift schedules for your employees. However, staff planning can be a tedious task. Not only do you need to consider business requirements such as cost and availability of staff but also pay attention to performance goals, your employees’ needs and legal aspects.
Factors to consider in scheduling
But first things first: Generally, an ideal schedule should match the number of available staff (FTE) to the forecasted workload. You aim to minimize both overstaffing and understaffing and ensure you’re scheduling the right number of agents with the right skills at the right time. Let’s take a look at some important factors to consider:
Service level (SL)
If you are aiming to e.g. have 80% of incoming calls answered within 20 seconds (80/20), you will want to schedule more agents to handle the workload (as compared to lower SL targets such as 50/20).
As not all agents can handle all tasks in the same manner, you’ll want to consider individual skills (e.g. chat, e-mail, inbound …) to schedule them where they are most valuable.
Be aware of legal restrictions (e.g. labour law, data privacy regulations, etc.) and contractual limitations (e.g. employee contracts, contractual agreements with other companies/clients) which can limit your scheduling possibilities. For example, part time workers, alternating break times and home office agents often require more flexible shifts.
Not even the best agent is productive 100% of the time - calculate with a “buffer” (a so-called “shrinkage”) to factor in unplanned absences such as sick days, meetings, lateness and more.
The complexity of getting the schedule right
Now, each one of these critical scheduling factors is a science in its own. As a first step, the common Erlang calculations (i.e. Erlang C and Erlang B) enable you to pinpoint staffing needs. To achieve ideal results you’ll want to factor in all the criteria mentioned above. It also matters, if your contact center uses only synchronous channels (such as telephone) or also asynchronous channels (such as e-mail). Depending on that and the scheduling tool you are using, you might need to do the scheduling process twice to ensure schedule efficiency. You’ll want to look at different kinds of scheduling techniques and shift patterns (e.g. full-time, part-time, set shifts and rotating patterns) to incorporate more flexibility in your schedules.
While scheduling is a complex task, it has a great influence on both contact center performance and agent satisfaction. With your ideal schedule, you will reduce costs, achieve service levels more consistently and minimize effort to manually adjust your schedules during the day. Getting it right can be challenging, so try to keep an open eye on optimization methods that are new to you and evaluate your scheduling process regularly.
4. Intraday Management
What is Intraday Management?
After the schedule is complete, the next step in workforce management involves monitoring the schedule adherence and contact center performance throughout the day. Intraday management allows you to see changes between plan and actual in real-time and react to deviations from the forecast.
The main goal of intraday management is to ensure you’re achieving and maintaining service level despite any unexpected changes that occur throughout the day. You will probably face deviations between plan and actual every day. Unplanned call spikes or sudden high sickness levels are a common scenario in WFM. You can’t prevent these incidents, but by reacting smart and quickly you can limit the effect that they have on your planning. With an appropriate reaction strategy, you’ll be best prepared to maintain adequate staffing levels without sacrificing on performance.
How to increase operational efficiency
Intraday management is all about ensuring operational efficiency, even under difficult and unexpected situations. There are different intraday tactics you can apply to increase your operational efficiency. First, you’ll want to monitor and evaluate whether agents are adhering to the schedule you created. Second, you’ll want to keep your performance goal in mind and regularly check the actual KPIs of your contact center against them. Metrics you can observe include:
- Actual number of calls (vs. forecasted call volume)
- Actual average handle time (vs. planned average handle time)
- Actual average speed of answer (vs. planned average speed of answer)
- Actual number of agents (vs. planned agent numbers)and many more.
If you detect any deviations, it’s helpful to directly analyze its cause and try to understand the possible consequence (overstaffing or understaffing). Once you identify the cause and consequence, you can decide on countermeasures to manage the problem in the best possible way.
5. Employee engagement
What is Employee Engagement
Employee Engagement plays an essential role in Workforce Management. It includes all elements focused on creating an environment where your staff feel empowered and encouraged to give their best every day. Developing an engaged contact center workforce can have significant positive effects on service quality. More engaged employees are more productive, produce better quality work and have higher sales numbers than disengaged employees.
Why employee engagement is getting more important
The topic of employee engagement is widely discussed among contact centers worldwide these days. The main reasons, amongst others, are often referred to be “job hopping” and the shift in power between employee and employer. Many businesses report that it is increasingly difficult to find highly-skilled employees as the expectations of the younger workforce (“Millennials”) on their employer are higher. Now more than ever, contact centers must keep the needs of their workforce in mind to ensure they are not only attracting but retaining their talent sustainably. If nothing else, this is also key to a financially sound business, as costs for recruiting, onboarding and training of new agents can be enormous.
How to increase employee engagement
There are various strategies to enhance employee engagement. As a WFM professional, you are having a great influence on customer engagement, too: The way you schedule your employees and plan their shifts can make a big difference. Build time for breaks, holidays, training, resilience recovery (after especially traumatic calls if needed) and manage punctuality, use of wrap time and absenteeism fairly but firmly. There are also many flexible scheduling strategies that help to create a productive and engaging work atmosphere. An easy lever is to grant employees the possibilities to bid on shifts or to swap them between each other. Employees are grateful to be involved in the planning process and to have a say which shifts they’d like to take on, and it’s easy to implement. Agents also tend to be happier if they are granted a certain level of convenience in their work. This includes possibilities to e.g. simply access their shift plan via their mobile phone, or to work from home when needed.
If you keep employee satisfaction and engagement in mind, you’ll be on the right path to create a win-win situation all around. After all, happier employees create happy customers!
In the complete guide on how to boost contact center employee engagement, you can find best practices and tips to incorporate in your planning.
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Reporting as part of the WFM process
So, until now you’ve learned about every step of the WFM process to get your workforce planning just right. As other stakeholders are also interested in the performance you achieve, let’s take a closer look on the reporting side of WFM.
A successful and target-oriented approach to workforce management heavily depends on your ability to continuously control and optimize the entire process from start to finish. This is where reporting comes into play. The statement ‘you cannot manage what you can’t measure’ by Robert S. Kaplan perfectly applies to WFM.
Reporting and KPI management is a key aspect of your workforce management operations. Reports help you visualize and measure your success against your plan. They also help you to supply all stakeholders with relevant information and metrics to make well-informed decisions for the business.
Key metrics in WFM reporting
One of the most crucial KPIs to tell you how your WFM process is performing is “service level”. It is is both a goal (i.e. Service level target/objective) and performance measure. It determines the accessibility of your business to your customers. It also gives insight into your ability to manage your workforce and execute an effective staffing strategy to balance “demand” with “supply”.
SL (Service Level) = The % of callers who are answered within a set threshold. E.g. a service level of 80/20 means 80% of all calls are answered in 20 seconds. Note: The SL can either be based on the handled calls only or on all offered calls.
Besides SL, you also want to measure and report on other metrics to ensure you’re meeting business goals efficiently. This can involve checking whether your planning assumptions are valid, your forecast is accurate and your schedules are efficient.
The main challenges of reporting
Workforce management is an integral part that ensures efficient running of operations. As it takes place between various objectives and interests, it can be quite challenging to juggle different information needs of stakeholders involved. Front-line staff, middle management, C-suite but also potential external contractors want to take a look at the performance metrics that are most valuable to them. Therefore, reporting must be tailored to various contexts which naturally determines the KPIs and metrics you’ll want to look at.
Keeping these influences in mind is almost as important as having the right data to analyse. You might have come across the expression “Garbage in, Garbage out”. In fact, having access to the right data and getting the data right are major concerns when you seek to create meaningful, intelligent and actionable reports. In the end, these reports will help you understand the current situation and take measures to close efficiency gaps and maximize future performance of your WFM process.
Data matters. Dive deeper into WFM performance metrics and download the full ebook on “How to become a WFM Superstar”!
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