Key Findings 3. The Workforce Management Technology Maturity Model 4. Present Challenges 6. Workforce Automation 8

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2 Table of Contents Introduction 3 Key Findings 3 The Workforce Management Technology Maturity Model 4 Present Challenges 6 Workforce Automation 8 Ranking the Degree of Automation 10 The Importance of Governance 11 Conclusions 13 About the Survey 13 About Kronos 14 About HR Horizons 14 2

3 Introduction In today s challenging economic environment, optimizing workforce productivity is integral to achieving profitability and sustained competitive advantage. Workforce management can play a critical role in controlling labour costs, increasing productivity, and improving workforce planning to support strategic goals and promote business growth. A broad term referring to the management of hourly and/or salaried employees, workforce management encompasses the many activities performed under the umbrella of human capital management (HCM) from accurate timekeeping and payroll processing to measuring employee performance and predicting future labour requirements. However, in order for workforce management to be effective in driving corporate goals, labour and business data must be properly integrated and made available to employees and managers in real time. Ready access to relevant information increases employee engagement, which can lead to higher productivity and a better customer experience. In addition, giving managers instant access to detailed insight and analysis enables them to proactively address critical business issues and challenges before short- and long-term business goals are compromised. Until now, information on the state of workforce management in Canada has been in short supply. To address this gap, Kronos and HR Horizons co-sponsored the Canadian Trends in Workforce Management Survey. Conducted in 2015, the survey collected quantitative data from 205 participating organizations to gain insights into: The challenges organizations face today with respect to managing time and labour The processes and tools organizations have in place today to support and manage workforce-related activities The survey results present a Workforce Management Technology Maturity Model depicting the current state of technology adoption in Canada and shed light on the role of governance in effective workforce management. (For details about the survey methodology, please refer to the section labeled About the Survey on page 13.) Overall, the study findings offer a useful benchmark for comparing an organization s progress in the area of workforce management with that of other organizations across the country. Key Findings Workforce Management Technology Maturity Model The study findings indicate that there is a definitive path along which organizations travel on their journey to workforce management technology maturity. Analysis of participant responses reveals a pattern in which organizations fall into one of the following three phases: 1. Tactical Phase: Automation of basic, tactical workforce processes, such as time and attendance management, to improve efficiencies and control costs 2. Operational Phase: Automation is extended to more complex workforce processes, such as absence costing or shift planning, to gain greater operational insight within and across teams 3. Strategic Phase: Integration of organizationwide workforce insights with other critical business data to guide informed decisions that help boost productivity and profits The survey results show that 74 percent of respondents are still in the early stages of their journey. The vast majority of organizations surveyed have automated basic time and attendance processes, but have yet to put in place automated technologies to support more advanced workforce management activities. 3

4 Major challenges A large majority of organizations surveyed are struggling to get a better handle on workforce costs and productivity. The workforce management activities most commonly cited as presenting major challenges are: 1. Having access to real-time costs and productivity data 2. Assessing labour performance across product lines/business units 3. Assessing the cost of absenteeism Major opportunities According to the survey findings, the least commonly implemented automated tools and processes, which represent areas of opportunity for cost savings and efficiency gains, include: 1. Dashboards to provide real-time insight into cost, productivity, overtime, and absences 2. Mobile (tablet, phone) timesheets 3. Labour forecasting software based on historical/seasonal sales or production demand 4. Automated call list generation to replace absent employees 5. Electronic alerts and controls for paid and unpaid leave The survey data showed a direct link between degree of automation and reported successes. This suggests that implementing automated workforce management tools and processes can deliver a clear payoff in the form of reduced costs, higher productivity, and improved efficiencies. The role of governance Governance plays a key role in the successful implementation and execution of strategies, processes, and technologies related to workforce management. In the survey responses, 60 percent of organizations stated that responsibility for workforce management resided within two or more functions. These findings show that approaches to workforce management governance vary significantly from organization to organization. However, participating organizations were more likely to be further along the technology maturity path if Operations owned or shared primary responsibility for workforce management functions. The Workforce Management Technology Maturity Model The survey looked at 21 workforce management activities ranging from the more basic automation of timekeeping to the more sophisticated assessing labour performance across product lines/business units, and asked participants to rank the level of challenge each activity presented. In addition, the survey examined 16 automated tools and processes that support workforce management activities and the extent to which organizations had implemented them. What emerged from the responses was a logical progression in how organizations evolve their workforce management practices over time. The Workforce Management Technology Maturity Model depicted in Figure 1, which is based on survey data, shows how participating organizations build upon advances made in previous phases starting in the lower left Tactical phase and moving toward the upper right Strategic phase to reach higher levels of workforce management technology maturity. 4

5 Figure 1: Workforce Management Technology Maturity Model* Workforce analytics Maturity (time) Payroll interfacing Mobile time, accounts access and requests Electronic timesheets Electronic time clocks Mobile requests Conditional workflows Electronic approvals Business rules automation Shift planning Overtime ranking Real-time production cost accounting Compliance monitoring Production/work order tracking Project costing and monitoring Absence costing Labour forecasting Labour cost analysis Workforce-related KPIs Tactical Operational Strategic The Tactical phase The survey results show that 74 percent of respondent organizations have started on their journey toward workforce management technology maturity and are currently in the Tactical phase. It is here that organizations begin by automating manual or semi-automated time and attendance processes such as timesheets, electronic approvals, and conditional workflows. These basic processes, which are relatively easy to automate, deliver a quick payback by improving data accuracy and reducing administrative effort for lower costs and higher efficiency. Improved reporting capabilities enable organizations to monitor time and attendance trends and identify opportunities for continuous improvement. The automation implemented within the Tactical phase lays the foundational building blocks for future evolution into the later phases. The Operational phase Once organizations become proficient within the Tactical phase, they begin expanding automation to additional workforce management activities such as absence costing and shift planning in the Operational phase. Frequently involving multiple stakeholders from various functions across the organization, these processes are typically more complex and difficult to manage. Building upon the foundation established in the Tactical phase, organizations integrate basic time and attendance automation with other business systems, such as ERP, financial, or production systems, in the Operational phase to provide management with deeper insights into labour performance and productivity. With this more advanced level of automation in place, organizations can monitor key performance indicators (KPIs) in real time and take proactive steps to keep results in line with expectations. Survey results indicate that 20 percent of respondents are currently in the Operational phase. * The survey gathered data on 16 areas of automation. Participants could rate their level of automation for each item as In Place, Partly in Place, Not in Place, or NA. Results were scored as 2 points for In Place, 1 point for Partly in Place, and 0 points for Not in Place or NA. Organizations scoring 24 points or above (equivalent to at least half of the automation items In Place and half Partly in Place ) were considered high maturity Organizations scoring points (equivalent to at least half of the automation items In Place or all items Partly in Place ) were considered mid-maturity Organizations scoring below 16 points were considered low maturity 5

6 The Strategic phase As organizations gain experience and realize the value in automating labour processes and leveraging integrated workforce data, they will likely start the transition from the Operational phase to the Strategic phase. Having established a strong workforce management technology foundation in the two previous phases, organizations are ready to tackle more strategic and value-added activities, such as labour forecasting or real-time cost accounting. In this phase, applying analytics to time and labour data that is integrated with scheduling, financial, production, or other business systems enables deeper and broader analysis. The addition of analytics provides the ability to identify trends and patterns across an organization s most important metrics, as well as underlying issues and opportunities to improve productivity and quality of service. With on-demand access to detailed labour information across the entire organization, managers and executives are better equipped to make data-driven decisions on key issues impacting performance and operational outcomes. According to the survey findings, only 5 percent of participating organizations are currently operating at this high maturity level. Present Challenges To evaluate the time and labour management challenges organizations face today, the survey focused on 21 related activities and processes. Respondents were asked to rank each activity by the degree of challenge it presented No Problem, Some Problem, or Major Challenges or indicate that it was not applicable. Least challenging Given the survey findings relative to the Workforce Management Technology Maturity Model, it was not surprising to see that the top three activities presenting the least challenge were: 1. Controlling number of incorrect paycheques 2. Handling fraudulent timekeeping/buddy punching 3. Managing planned absences Figure 2 shows the findings in more detail, revealing that a sizable number of companies still face some problem in these areas while relatively few face major challenges. Figure 2: The Three Least Challenging Workforce Management Activities Controlling Incorrect Paycheques 68% 27% 5% Handling Fraudulent Timekeeping/Buddy Punching 62% 31% 7% Managing Planned Absences 41% 47% 11% No Problem Some Problem Major Challenges Going back to the maturity model, we see that these three activities fit into the Tactical phase, where organizations are focusing on automating basic time and attendance functions to improve efficiencies. 6

7 Most challenging The workforce management activities with which survey participants most often reported having major challenges were: 1. Having access to real-time costs and productivity 2. Assessing labour performance across product lines/business units 3. Assessing the cost of absenteeism The breakdown of data in Figure 3 shows that more than three-quarters of organizations face Some Problem or Major Challenges in these areas. Figure 3: The Three Most Challenging Workforce Management Activities Having Access to Real-Time Costs and Productivity 19% 44% 37% Assessing Labour Performance Across Product Lines/Business Units 22% 48% 30% Assessing the Cost of Absenteeism 21% 51% 28% No Problem Some Problem Major Challenges Two of these activities Having access to real-time costs and productivity and Assessing the cost of absenteeism fall into the Operational phase, which represents the midpoint of the workforce management technology maturity journey. This indicates that as organizations move up the maturity curve, the challenges they face become more difficult. At the same time, this finding begs the question as to why more organizations did not report major challenges with strategic activities. Since only 5 percent of organizations have reached high workforce management technology maturity, it is likely that most of the Canadian organizations surveyed simply have not yet tackled the more strategic areas. Given that these three activities impact an organization s ability to optimize labour productivity and improve performance against KPIs, the findings suggest that there is an opportunity to achieve further cost and efficiency gains by meeting these challenges through effective use of automation. Ranking the major challenges To uncover the workforce management gaps within Canadian organizations today, the survey asked participants to rank the degree of challenge they face in numerous workforce-related activities. Figure 4 lists the 21 workforce management activities, the percentage of participants facing challenges in each area, and the phase within the maturity model Tactical, Operational, or Strategic into which each activity falls. 7

8 Figure 4: Ranking Workforce Management Process by Major Challenge Workforce Management Activity Major Challenges Some Problem Maturity Model Phase Having access to real-time costs and productivity 37% 44% Tactical Assessing labour performance across product lines/business units 30% 48% Operational Assessing the cost of absenteeism 28% 51% Operational Measuring the impact of labour on profitable outputs 28% 47% Strategic Reconciling productive time and cost to time paid 26% 49% Strategic Predicting labour needs 24% 52% Strategic Automation of scheduling 24% 41% Operational Managing unplanned absences 23% 52% Operational Monitoring project efforts and costs 22% 57% Operational Automation of timekeeping 22% 37% Tactical Tracking labour activities and Work In Progress (WIP) 19% 58% Operational Managing the complexity of union and nonunion rules 17% 37% Operational Treating all staff equitably with respect to schedule and time reporting policies Giving employees more access to their HR and timekeeping/ scheduling information 16% 37% Operational 16% 42% Operational Centrally storing and tracking all employee and time data 16% 41% Tactical Monitoring labour costs 14% 50% Operational Accuracy of timekeeping 13% 42% Tactical Assigning qualified employees to shifts or work centres 12% 34% Operational Managing planned absences 11% 47% Tactical Fraudulent timekeeping/buddy punching 7% 31% Tactical Incorrect paycheques 5% 27% Tactical As organizations evaluate their workforce-related processes, this ranking can provide a useful tool for comparing their current performance in specific areas with that of other organizations across the country. It can also serve as a checklist of possible areas of focus and investment as they seek to optimize workforce management for improved profitability and competitive advantage. Workforce Automation The survey also examined which automated processes and tools organizations have in place to support their workforce management activities. Respondents were asked to rank each of the 16 processes/tools as In Place, Partly in Place, or Not in Place. Not surprisingly, the vast majority of organizations have automated the more basic workforce management functions, but many have yet to implement processes and tools to address more complex and challenging activities. 8

9 Most automated Based on the survey results, the most commonly automated workforce management activities within Canadian organizations are: 1. Electronic or web-based timesheets 2. Time data collection devices (clocks, PCs, or mobile) 3. Configurable timekeeping rules to enforce time management policy While these were cited as the most commonly automated areas of workforce management, the data reinforces that many organizations are still just getting started on their workforce management technology journey. Figure 5 breaks down the results in greater detail, showing that roughly a third of organizations have yet to put these types of basic automation in place. Figure 5: The Three Most Commonly Automated Areas of Workforce Management Electronic or Web-Based Timesheets 48% 21% 31% Time Data Collection Devices 44% 20% 36% Configurable Timekeeping Rules to Enforce Time Management Policy 38% 34% 28% In Place Partly in Place Not in Place As the low-hanging fruit of workforce management automation, these processes and tools offer an effective starting point for organizations seeking immediate efficiency gains and rapid return on investment. Least automated The survey results show that the least commonly automated areas of workforce management are: 1. Dashboards to provide real-time insight into costs, productivity, overtime, and absences 2. Mobile (tablet, phone) timesheets 3. Tied for third position: Labour forecasting software based on historical/seasonal sales or production demand Automated call list generation to replace absent employees Electronic alerts and controls for paid and unpaid leave 9

10 Figure 6: The Least Automated Areas of Workforce Management Dashboards to Provide Real-Time Insight into Costs, Productivity, Overtime, and Absences 14% 23% 63% Mobile (Tablet, Phone) Timesheets 15% 12% 73% Labour Forecasting Software Based on Historical/Seasonal Sales or Production Demand 16% 15% 69% Automated Call List Generation to Replace Absent Employees 16% 16% 68% Electronic Alerts and Controls for Paid and Unpaid Leave 16% 29% 55% In Place Partly in Place Not in Place These workforce management processes represent areas of opportunity to gain actionable insights, boost responsiveness, and improve real-time decision making all of which help drive higher performance and bottom-line results. Ranking the Degree of Automation One goal of the survey was to provide insight into the state of workforce management processes and technologies within Canadian organizations. Figure 7 lists the 16 automated processes and tools evaluated in the survey, sorted from the least to the most implemented. This table provides a comprehensive checklist for identifying potential automated processes and tools for implementation within an organization. In addition, it provides a useful benchmark for assessing an organization s current degree of automation against that of other Canadian organizations. 10

11 Figure 7: Ranking of Automated Processes and Tools Automated Processes and Tools Not in Place Partly in Place Maturity Model Phase Dashboards to provide real-time insight into costs, productivity, overtime, and absences 63% 23% Strategic Mobile (tablet, phone) timesheets 73% 12% Operational Labour forecasting software based on historical/seasonal sales or production demand 69% 15% Strategic Automated call list generation to replace absent employees 68% 16% Operational Electronic alerts and controls for paid and unpaid leave 55% 29% Operational Automated schedule generation that incorporates competencies and availabilities 65% 18% Strategic Automated tracking of planned and unplanned absences 48% 34% Operational Electronic booking of time on production orders, maintenance orders, work centres 46% 26% Operational Automated absence/attendance approval workflows 45% 25% Tactical alerts (for timekeeping exceptions) 49% 20% Operational Automated banking of lieu time 42% 27% Tactical Employee self-service for submitting time-off requests 41% 21% Tactical Automated leave entitlement generation (vacation, etc.) 39% 23% Tactical Configurable timekeeping rules to enforce time management policy 28% 34% Operational Time data collection devices (clocks, PCs, mobile) 36% 20% Tactical Electronic or web-based timesheets 31% 21% Tactical The Importance of Governance Who is responsible for workforce management? The survey investigated which function(s) within the participating organizations was primarily responsible for workforce management. As shown in Figure 8, 43 percent of respondents reported that the main responsibility for workforce management resides with a single function, while the remaining 57 percent cited that responsibility is shared between two or among three, four, or even five groups. Figure 8: How Many Functions Share Responsibility for Workforce Management? Three: 15% Four: 7% Five: 1% 27% 68% One: 43% Two: 34% 11

12 HR and Operations were the functional areas most commonly cited as having responsibility for workforce management. In fact, these departments have at least shared responsibility in 62 percent and 58 percent of organizations, respectively. Figure 9: Which Function Is Responsible for Workforce Management? Has Sole Responsibility Has at Least Shared Responsibility HR 38% 62% Operations 31% 58% Finance 4% 21% Payroll 17% 38% Other* 7% 9% * The Other category includes the CEO/Owner, Corporate Shared Services, Management, and Within Each Team. In today s organizations, a major goal of governance is ensuring clarity about who is in charge of what, and where accountability ultimately resides. The issue of governance is particularly important in areas where decisions have a significant impact on multiple stakeholders. Given the range of survey responses, workforce management is clearly an area where a discussion of governance is overdue. While a single point of accountability is often desirable, it is easy to understand why HR would not want to cede control of workforce decisions to Operations and vice versa. Nonetheless, strong governance must be in place to ensure the success of workforce management initiatives as organizations move up the maturity curve. When it comes to workforce management, organizations need to sort out an approach to decision-making that draws on the expertise of all relevant functions regardless of where primary responsibility officially resides. Does governance affect the degree of automation? Does it really matter which group within an organization is responsible for workforce management? To find out, we looked at the maturity scores of those organizations citing the three most common approaches to workforce management governance just HR, just Operations, and shared responsibility between HR and Operations. As shown in Figure 10, organizations are more likely to be high on the maturity curve if Operations has sole or shared responsibility for workforce management. When you consider the day-to-day responsibilities that so closely align frontline managers to workforce management issues and requirements, it makes sense that Operations can help drive positive change to advance organizations along the maturity curve. Figure 10: Impact of Governance on Workforce Management Maturity Responsible for Workforce Management Governance % of Organizations at High or Mid-Maturity Just HR 20% Just Operations 33% Shared between Operations and HR 29% 12

13 Conclusions Organizations typically seek three primary benefits by automating workforce management activities: cost control, improved employee productivity, and better workforce planning. According to the survey, organizations across Canada still face a broad range of workforce management challenges from timekeeping and scheduling issues to difficulty accessing and monitoring labour cost and performance data in real time. While the survey revealed a wide variation in the number and types of automated processes and tools Canadian organizations have in place to support workforce management activities, the vast majority of participants are still in the Tactical phase of the Workforce Management Technology Maturity Model. This variation is to be expected as achieving improvements in costs, productivity, and planning through automation is a long, continuous journey. Organizations need to think in terms of making step-by-step improvements as they move up the maturity curve to address more complex challenges. The path up the curve should be guided by the workforce management governance structure. Organizations would be well-served by reviewing who is responsible for moving workforce management forward to optimize its impact on costs, productivity, and planning. It is striking how many different organizational functions can be responsible for workforce management and how often responsibility is shared among several departments. Shared responsibility, properly governed, can help ensure that multiple viewpoints are considered when establishing workforce management strategies and policies, and when implementing supporting tools and processes. Because workforce management cuts across organizational silos in complicated ways, issues of governance should not be left to chance. What matters most is that there are mechanisms in place for setting direction, making decisions, establishing accountability, and taking into consideration an adequate range of viewpoints from across the organization. The Canadian Trends in Workforce Management Survey provides a snapshot of workforce-related challenges and automation at a particular point in time. It is fair to assume, however, that as organizations realize the benefits of automated processes and tools at the bottom of the maturity curve, they will move on to address more impactful tactical, operational, and strategic challenges through effective use of workforce management technology. About the Survey The Canadian Trends in Workforce Management Survey was designed to gather input on strategic workforce management pain points and the state of workforce management technologies within organizations across Canada. The online survey invited managers, directors, and executives within Human Resources, Finance, and Operations functions in organizations from all industry sectors across Canada to participate. Conducted between February 4, 2015, and December 4, 2015, the survey focused on two main areas of interest: the challenges organizations face today with respect to workforce management activities, and the automated processes and tools in place today to support those activities. Data was collected from 205 participants. The input was then used to uncover workforce management gaps and identify correlation between organizations pain points and their investment in workforce management automation. Survey participants worked for organizations ranging in size from 1-2,500 employees: 1 99 employees 29% employees 32% employees 11% 1,000 2,499 employees 9% 2,500+ employees 19% 13

14 Participating organizations spanned a broad range of industries including but not limited to manufacturing, nonprofit, healthcare, retail, financial services, government, education, hospitality, energy, life sciences, media and communications, and transportation and distribution. Contributor David Creelman, CEO of David Creelman Research and Advisory Board member of the Workforce Institute, helped interpret and validate the results. About Kronos Kronos is the global leader in delivering workforce management solutions. When labour processes such as time and attendance, staff scheduling, and absence management are automated, operational insight is captured and made available in real time through analytic dashboards that help managers make better-informed decisions. As a result, Kronos customers realize reduced labour costs, improved productivity, and minimized compliance risk as union contracts and employment laws are being followed consistently across all departments. Staff satisfaction also increases when processes facilitate the fair and equitable treatment of employees. To learn more about Kronos solutions, visit About HR Horizons HR Horizons is the leading Canadian consulting firm specializing in driving operational and business performance through the optimization of HR technologies and processes. Every day, HR Horizons helps organizations by guiding them through comprehensive HR transformation projects that drive performance, streamline critical activities, and increase the efficiency of back-office HR operations. To learn more about HR Horizons, visit Kronos Canadian Systems Inc. 110 Matheson Blvd. West, Suite 320 Mississauga, Ontario L5R 4G , Kronos Incorporated. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. For a full list of Kronos trademarks, please visit the trademarks page at All other trademarks, if any, are property of their respective owners. All specifications are subject to change. All rights reserved. CV0593 CA-EN

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