Workforce Scheduling:

Transcription

1 Workforce Scheduling: Managerial Strategies for Driving Down Costs While Escalating Customer Satisfaction May 2009 Kevin Martin, Kimberly Madden

2 Page 2 Executive Summary An efficient workforce scheduling process enables a company to allocate the right people, with the right skills, in the right place, at the right time. As a result, it has direct impact on a company's ability to decrease costs, increase workforce capacity utilization and productivity, as well as escalate overall customer satisfaction. While scheduling is an integral part of Best-in-Class organizations' workforce management strategies, only 43% of the 350 executives surveyed by Aberdeen Group specific to this research indicated their organizations currently have a formalized scheduling process in place. Best-in-Class Performance Aberdeen used year-over-year performance improvement in three key performance criteria to distinguish Best-in-Class companies: 30% average improvement in workforce capacity utilization 36% average increase in staff productivity 31% average increase in customer satisfaction Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics: 88% have standardized a single scheduling process that is used across the enterprise or can be tweaked by region or business unit 77% have senior leadership buy-in pertaining to the importance of scheduling 71% have integrated their scheduling process with the organization's workforce management strategy Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: Provide employees with real-time visibility into schedules and managers with ability to forecast Enable managers and supervisors to create schedules based on skills, certifications, and / or seniority Regularly report on and update overall workforce management progress to key stakeholders (i.e. workforce productivity) Research Benchmark Aberdeen s Research Benchmarks provide an indepth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations. "Our workforce scheduling solution has increased the ability of the company to measure labor hours by 75%, thus decreasing casual absenteeism from 12% to less than 2%. In addition, we have experienced a 98% reduction in overtime hours incurred. The ability to accurately forecast and provide training based on future project needs has improved the final quality of projects by 50% and a 45% improvement of complete and accurate data being submitted for projects." ~ Richard Kunst, President & CEO, Kunst Solutions Corporation

3 Page 3 Table of Contents Executive Summary...2 Best-in-Class Performance...2 Competitive Maturity Assessment...2 Required Actions...2 Chapter One: Benchmarking the Best-in-Class...5 Aberdeen Analysis...5 The Maturity Class Framework...8 The Best-in-Class PACE Model...9 Best-in-Class Strategies...9 Chapter Two: Benchmarking Requirements for Success...12 Competitive Assessment...13 Capabilities and Enablers...14 Chapter Three: Required Actions...24 Laggard Steps to Success...24 Industry Average Steps to Success...24 Best-in-Class Steps to Success...25 Appendix A: Research Methodology...27 Appendix B: Related Aberdeen Research...29 Figures Figure 1: Top External Pressures Driving Workforce Scheduling...6 Figure 2: Top Internal Challenges Driving Workforce Scheduling...7 Figure 3: Top 5 Obstacles to Mainstream Adoption of Scheduling...7 Figure 4: Top Reasons for No Formal Scheduling Process...8 Figure 5: Top 2 Strategic Actions Pertaining to Scheduling...10 Figure 6: Organizational Standardization of Scheduling Processes...15 Figure 7: Integration with Workforce Management Strategy...16 Figure 8: Internal Collaboration to Foster Scheduling Process...17 Figure 9: Competencies to Align Labor Supply and Demand...18 Figure 10: Employees Can View / Change Schedules in Real-Time...19 Figure 11: Technology Most Used by Best-in-Class with Scheduling...21 Figure 12: Top 5 Metrics Most Critical to Workforce Scheduling...22 Tables Table 1: Top Performers Earn Best-in-Class Status...9 Table 2: The Best-in-Class PACE Framework...9 Table 3: Maturity of Workforce Scheduling Processes...11 Table 4: The Competitive Framework...13 Table 5: Year-over-Year Average Improvement...20 Table 6: Year-over-Year Performance Improvement in KPI...23

4 Page 4 Table 7: The PACE Framework Key...28 Table 8: The Competitive Framework Key...28 Table 9: Relationship Between PACE and the Competitive Framework...28

5 Page 5 Chapter One: Benchmarking the Best-in-Class Aberdeen Analysis Over the past 18 months, Aberdeen has published extensively on managing talent to recruit, retain, and develop the most effective and efficient workforce. As important as these variables are, without the proper allocation and utilization of the organization's employees, optimization of these most critical assets will not be achieved. The ability to ensure that the right people with the right skills are in the right place at the right time is of heightened importance and brings into focus the strategic nature of effective workforce scheduling. Aberdeen Group s August 2008 benchmark report, Strategies in Workforce Planning: Using Talent Acquisition and Performance Management Programs to Meet Tomorrow s Business Needs, revealed that due in part to their workforce planning efforts, Best-in-Class organizations experienced 31% average year-over-year improvement in workforce capacity utilization. To understand the utilization and impact of workforce scheduling, in April and May 2009 Aberdeen surveyed 350 executives in Human Resources, talent management, and varied other lines of business. Among those surveyed, 43% indicated their organization has a formal scheduling process in place, 16% indicated their organization has plans to put one in place within 12 months, and 33% indicated there are no plans to put one in place. Among those that currently have or plan to implement a formal scheduling process (n=209), 26% managed field workforces and 69% managed internal corporate workforce. Fast Facts All executives surveyed for this research were asked whether their survey responses represented the field or internal workforce. Aberdeen did not distinguish between either group in its determination of Best-in- Class 59% of executives surveyed indicated their organization either has or plans to have (within 12 months) a formal workforce scheduling process 55% of executives indicate the current economic downturn as a top-two macro pressure driving their scheduling efforts The Business Context An effective and well managed workforce scheduling process allows an organization to address two competing forces: 1) the need to contain operational costs via efficient planning and staffing; and 2) the need to capture and retain customers via appropriate allocation and alignment of skills with job requirements and customer needs. These forces become increasingly more pronounced during a down economy as organizations compete intensely with fewer resources and are forced to do more with less (Figure 1).

6 Page 6 Figure 1: Top External Pressures Driving Workforce Scheduling Percent of Organizations 60% 40% 20% 53% 51% Best-in-Class 47% 40% All Others 44% 54% 32% 26% 0% Changing customer requirements / demands Increased competitive landscape forcing focus on productivity Economic downturn forcing focus on containing costs Changing demographics of available workers N=212 A slight majority of all organizations indicate they are influenced to pursue scheduling to address changing customer requirements or demand. In today's ever-changing global economy, meeting customer needs requires the ability to anticipate and respond accordingly. And, the ability to allocate the appropriate employees is essential to this objective. However, Best-in-Class organizations (the top 20% of aggregate scorers in our survey sample) are 21% more likely than all other organizations (the bottom 80% of aggregate scorers) to be focused on scheduling as a means to help them get the most from their workforce (i.e. increase employee productivity). In addition, Best-in-Class organizations are 23% more likely than all other organizations to view scheduling as means to accommodate the varying needs and expectations of a diverse workforce (e.g., age, culture, lifestyle, etc.). Businesses today operate in an era with four generations of available workers and an ecosystem that is global with regards to customers, workers, partners, etc. These organizations maintain the view that the ability to accommodate various worker preferences and schedules, including a myriad of labor laws, rules, and regulations, can have a dramatic impact on variables such as satisfaction, productivity, and retention. Balancing Operational Efficiency and Customer Effectiveness The top internal challenges Best-in-Class organizations seek to address with workforce scheduling emphasize the critical balancing act that must be addressed between operational efficiency and customer effectiveness. In fact, Best-in-Class organizations are 41% more likely than all other organizations to view scheduling as a means to align labor cost with revenue (i.e. by not over- or under-scheduling). In addition, these organizations are 31% more likely than all others to perceive scheduling as a means to improve customer satisfaction with their products or services delivered via adequate allocation of staff, as well as an agile and adaptive workforce (Figure 2).

7 Page 7 Figure 2: Top Internal Challenges Driving Workforce Scheduling 50% 47% Best-in-Class All Others Percent of Organizations 40% 30% 20% 10% 0% 36% Customer Satisfaction with products or services delivered 41% 29% Labor costs as a percent of sales 32% 39% Workforce agility N=212 Don't Lose Sight of Longer-Term Objectives Effective workforce scheduling allows an organization to plan for anticipated demand and to calculate the necessary allocation of required workers (in terms of numbers as well as competencies and / or skills) in a manner that optimizes productivity and workforce capacity utilization, in addition to worker / employee and customer satisfaction (see Table 1 for details). Indeed, a formal workforce scheduling process can produce gains for the organization both in the short- and long-term. Ironically, the primary obstacle to widespread adoption of workforce scheduling among organizations with a current scheduling process in place is too much time spent on short-term needs (Figure 3). The implementation of our workforce scheduling solution allows us to make better decisions to help balance service levels and productivity. Being able to create reports that enable us to drill down the proper allocation of workforce assists in reducing overtime costs, optimizes workforce capacity utilization, overall employee satisfaction, and reduced our attrition rate by 20%. ~ Forecast Analyst, leading catalog company Figure 3: Top 5 Obstacles to Mainstream Adoption of Scheduling 40% 36% Percent of Organizations 30% 20% 10% 23% 22% 21% 21% 0% Organization Concerns about focuses too speed to much on short- deployment / term needs ROI No clear vision of where growth / change will come Lack of budget Limited / no integration of data needed N=212

8 Page 8 The pressure that the economic recession has placed on organizations to focus on short-term survival tactics (i.e. layoffs, hiring freezes, etc.) is very real. However, it can also cripple an organization's ability to execute against its longer-term strategy as well as adapt to change, both anticipated and unanticipated. Coincidently, 46% of executives surveyed for Aberdeen's December 2008 research report, The 2009 HR Executive's Agenda, (a study of 417 organizations) indicated that too much time focused on day-to-day (tactical) HR activities was the top inhibitor to HR being perceived as a strategic partner to the business. Too much short-term focus was also indicated by 17% of executives in this research study on workforce scheduling as a top-two reason their organization has no plans to adopt a formal scheduling process. The top reasons for organizations, however, to not have a formal scheduling process range from limited perceived applicability due to size or industry of the business 100% of organizations that indicated "headcount is too small" have less than 500 in total headcount to lack of perceived value or impact of scheduling (Figure 4). These responses highlight a need in the market for education on the benefits of scheduling. Figure 4: Top Reasons for No Formal Scheduling Process Headcount is too small 30% It doesn't apply to our industry / sector No understanding of scheduling's business value No buy-in / urgency among senior management 22% 22% 21% 0% 5% 10% 15% 20% 25% 30% 35% The Maturity Class Framework Percentage of Organizations N=212 To measure the efficiency of an organization's workforce scheduling process, Aberdeen used three key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations. These Key Performance Indicators (KPIs) are year-over-year improvement in workforce capacity utilization, staff productivity, and customer satisfaction as illustrated in Table 1.

9 Page 9 Table 1: Top Performers Earn Best-in-Class Status Definition of Maturity Class Best-in-Class: Top 20% of aggregate performance scorers Industry Average: Middle 50% of aggregate performance scorers Laggard: Bottom 30% of aggregate performance scorers Mean Class Performance in Weighted Averages (year-over-year) 30% average improved workforce capacity utilization 36% average increased staff productivity 31% average increased customer satisfaction 6% average improved workforce capacity utilization 8% average increased staff productivity 10% average increased customer satisfaction 12% average decreased workforce capacity utilization 7% average decreased staff productivity 1% average decreased customer satisfaction The Best-in-Class PACE Model Utilizing a formal workforce scheduling process to achieve corporate goals requires a combination of the recognition of pressures, strategic actions, organizational capabilities, and enabling technologies as illustrated in Table 2. Table 2: The Best-in-Class PACE Framework Pressures Actions Capabilities Enablers Changing customer requirements / demands Ensure that staff schedules are aligned with actual business needs Identify gaps between available workforce skills and needed capabilities Single, standardized scheduling process Support and buy-in for scheduling from organization's senior leadership, including managers and supervisors Overtime policies are clearly communicated to applicable workers Scheduling process is integrated with the organization's workforce management strategy Managers / supervisors understand the impact staff costs have on organization's profitability Workforce management progress is regularly updated and reported to key stakeholders Time and attendance software Absence management software Workforce scheduling software Employee self-service to view or review labor schedules, hours worked, and requests for time off Manager dashboard reports and analytics Forecasting software that enables managers to predict number and type of worker based on anticipated demand Performance management software Best-in-Class Strategies To adapt quickly to changing business needs and customer demands, as well as streamline operations, Best-in-Class organizations are focusing on ensuring that planning and allocation of their workforces are aligned with

10 Page 10 purposeful precision. While all organizations indicate they seek to align staff schedules with actual business needs, Best-in-Class organizations are 47% more likely than Industry Average and 127% times more likely than Laggard to focus on aligning the allocation of workers skills and / or competencies with required capabilities (Figure 5). Figure 5: Top 2 Strategic Actions Pertaining to Scheduling Best-in-Class Average Laggard Ensure that staff schedules are aligned with actual business needs 56% 59% 52% Identify gaps between available workforce skills and needed capabilities 22% 34% 50% 0% 10% 20% 30% 40% 50% 60% Percent of Organizations N=212 Knowledge of the gaps that exist between supply and demand (current or anticipated in terms of numbers of workers and skills needed) provides immense value for both short- and long-term workforce planning. In the short-term, this knowledge allows an organization to align the schedules of its existing workforce with the job roles / functions it anticipates that will meet anticipated demand surges and / or specific customer requirements. This will help to ensure that each customer enjoys the best possible experience. In the long-term, this knowledge enables the organization to plan appropriately when it comes to internal development or external recruitment activities as they relate to current workforce readiness and anticipated business changes. Aberdeen's August 2008 research report, Strategies in Workforce Planning, revealed that 65% of Best-in-Class organizations budgeted labor within their workforce planning system to assist in modeling staff scenarios in terms of full / part / contingent labor workers, compared to only 29% of Laggard organizations. By focusing on both short- and long-term workforce gaps, managers and supervisors will be able to plan for and anticipate scheduling needs with more accuracy. From HR's perspective, this dual focus will help HR provide proactive strategic guidance to business unit managers and senior corporate leaders.

11 Page 11 Aberdeen Insights Strategy (What Corporate Can Learn from the Field) At 97% of organizations, the responsibility for scheduling falls on non-hr business managers. However, if your organization seeks to apply scheduling to its internal workforce for aligning available skills with job requirements or for leveraging data from scheduling to forecast outcomes based on anticipated scenarios, Aberdeen's research suggests that HR may be able to learn a lot from those already implementing scheduling in the field (i.e. shift supervisors, production managers, or project managers). Whether respondents answered Aberdeen's scheduling survey from a field based or internally focused workforce scheduling perspective, both groups indicated that they utilize scheduling to address the same external pressures and internal challenges. However, the pressure to contain costs is more prevalent among those using it for internal workers (58% Internal versus 48% Field). In addition, the challenge to achieve greater customer satisfaction with products or services delivered is weighed more heavily on field workers as they tend to be in direct contact with end-user consumers or customers (43% Field versus 36% Internal). Despite these commonalities, stark differences exist pertaining to the maturity and application of scheduling for each audience (Table 3). Table 3: Maturity of Workforce Scheduling Processes Workforce scheduling process is "reactive, emergency-driven" Scheduling process has been in place more than five years Scheduling capability extends more than three months in the future Workforce scheduling system is manual or spreadsheet intensive Dedicated resource(s) to manage workforce management strategy Specific business pain points that scheduling can address are identified Field Perspective 15% 46% 43% 30% Internal Perspective 25% 29% 27% 43% 61% 42% 56% 39% In the next chapter, we will see what the top performers are doing to achieve the gains highlighted in Table 1of this research report.

12 Page 12 Chapter Two: Benchmarking Requirements for Success The selection of a strategic workforce scheduling solution and its integration with business intelligence and business process management systems plays a crucial role in the ability to turn these strategies into profit. Case Study PA Consulting Group PA Consulting Group, an international management and technology consulting firm operating in 35 countries with over 3,000 employees, bids for its work in a highly competitive market place. As a professional services firm in this economy, PA Consulting recognizes that a key driver of profitability is the utilization of its people. The firm s global support systems, covering sales, assignment, and people management, are highly integrated and underpinned by performance reporting over its intranet. At the highest level, PA Consulting has maintained a sharp eye on the idea of supply and demand, and sees fit to forecast labor according to those demands. Business plans for each practice, including recruitment and development, are developed and monitored in light of their sales pipeline and stock of work. Commercial arrangements and customer expectations require excellence in delivery with engagement partners having personal accountability for customer satisfaction and job profitability. Every consultant s availability is shown via a forward load system which is visible across the firm and used by resource managers to fulfill client requirements, and is updated on a weekly basis. Through the forward load system management is able to forecast what the likely labor demand is for particular projects. Periodically throughout the year management examines their workload compared to the execution of those projects. In addition, PA Consulting has a series of career paths and competency models across the firm. Each consultant has set objectives at the beginning of the year with expected levels of utilization. It is the responsibility of management to ensure that consultants are placed on projects which fit their competencies, and will fulfill their objectives within the first year. All time commitments are entered by consultants on a weekly basis and this information is used to forecast commitments (and revenue) for the forthcoming three-month period. When you factor in the pipeline, you have a greater understanding of what is likely to sell, therefore it is critical to look at the totality of all of our work, according to Tim Pare of their Business Transformation Group. continued Fast Facts 80% of Best-in-Class indicate they are satisfied with their workforce scheduling process, compared to 49% of Industry Average and 26% of Laggard

13 Page 13 Case Study PA Consulting Group Every member of staff submits a weekly electronic timesheet. Timesheets link directly to each job profile, so that only authorized hours can be booked. Utilization is a key performance measure, with every consultant setting an annual utilization target. Utilization is monitored by practice heads and resource managers. The utilization target per employee is based on the total number of hours possible that each employee may be able to work, less training, vacation time, and geographic location. Individual consultants have access to their utilization data via PA s intranet. Career paths, with associated competency profiles, are defined for all roles across the firm. PA s automated performance appraisal tool is the cornerstone of its people management process. It includes assignment reviews, mid-year and annual reviews and 360-degree reviews, centralizing all data into one location. Says Pare, The tool feeds directly into our people development processes and is the key driver of compensation and reward of employees. Competitive Assessment Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute their daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (the selection of appropriate tools and effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 4) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics. Table 4: The Competitive Framework Process Best-in-Class Average Laggards Single, standardized scheduling process that is either consistent across the organization or tweaked by region / business unit to reflect unique needs 88% 56% 59% Scheduling process is integrated with the organization's workforce management strategy 71% 56% 39%

14 Page 14 Organization Knowledge Management Technology Management Performance Best-in-Class Average Laggards Support and buy-in from organization's senior leadership regarding importance of scheduling 77% 70% 48% Managers can accurately forecast future staffing requirements 59% 37% 26% Ability to assess current workforce against competency profiles to determine skills / knowledge gaps 62% 35% 26% Employees are able to view / change schedules in real-time 53% 29% 9% Central repository of all scheduling data is maintained and updated 59% 48% 33% Scheduling data is integrated with the following workforce management elements 88% Time and Attendance 77% Payroll 62% HR administration 59% Workforce planning 47% Workforce analytics 66% Time and Attendance 57% Payroll 31% HR administration 45% Workforce planning 29% Workforce analytics 59% Time and Attendance 52% Payroll 32% HR administration 24% Workforce Planning 15% Workforce analytics Regularly review impact of scheduling on key business metrics 56% 43% 20% Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with end-users, Aberdeen s analysis of the Best-in-Class demonstrates that the implementation of a strategic scheduling process plays an integral role in the planning and effective management of an organization s workforce. In addition, these conversations have also revealed that investment for scheduling within the organization is weighed heavily as a result of the economy. This highlights the necessity for organizations to see the true business value of the integration of a workforce scheduling solution. Process Nearly nine in 10 Best-in-Class organizations have standardized their workforce scheduling process (88%). "Standardized" in the context of this

15 Page 15 research report represents a single process that is utilized across the organization, yet may be tweaked by geography or business unit to address unique rules or laws. Best-in-Class organizations are 54% more likely than all others (the combination of Industry Average and Laggard) to have standardized this process. Among Best-in-Class organizations that have standardized their scheduling process, 38% maintain a single process that is utilized across their entire organization, whereas half (50%) allow that single process to be tweaked by geographic regions or business unit. The latter is critical to accommodate varying rules, policies, and / or other nuances unique to the business requirements of each (e.g., to accommodate national holidays, employment laws, collective bargaining). In contrast, all other organizations are 2.3-times more likely than Best-in-Class organizations to describe their scheduling process is completely at the discretion of the business unit or locale, and with little consistency from site to site or business unit to business unit (Figure 6). Fast Facts Whereas Best-in-Class organizations achieved 35% average year-overyear improvement in staff productivity and 25% average year-over-year gain in employee satisfaction, Laggard organizations suffered a 7% year-overyear performance decrease across both metrics. Figure 6: Organizational Standardization of Scheduling Processes Percent of Organizations 50% 40% 30% 20% 10% 50% 38% 44% Best-in-Class Average Laggard 38% 17% 12% 12% 41% 37% 0% Standardized Process consistent across entire organization Standardized Process Localized process by tweaked by region / region / business unit business unit N=212 A standardized scheduling process helps organizations set expectations and provide consistency to their workforce in terms of the availability and updates to schedules. It also makes known to managers what and when data is expected to be inputted, so as to provide consistent measurement of scheduling effectiveness of one location as compared to another. In addition to a standardized scheduling process, 71% of Best-in-Class organizations have integrated their workforce scheduling process with their overall workforce management strategy (Figure 7). A comprehensive workforce management strategy typically accounts for elements such as payroll, time and attendance, absence management, and scheduling. Integrating a standardized scheduling process helps organizations recognize

16 Page 16 trends that exist within labor cost, attendance rates, and utilization. This information can then be used to fill schedules with the most cost-effective, yet competent, workers. Figure 7: Integration with Workforce Management Strategy 80% 70% 60% 50% 40% 30% 20% 10% 0% 71% 56% 39% 26% 22% 18% Formal process Formal process separate integrated with workforce management strategy from workforce management strategy 33% 16% 9% Reactive, emergencydriven Best-in-Class Industry Average Laggard N=212 Laggard organizations are 267% more likely than Best-in-Class organizations to describe their scheduling process as "reactive, emergency-driven. In general, Laggard organizations are unable to provide sufficient lead-time to workers regarding scheduling or schedule changes. In addition, these organizations lack ability to plan appropriately for future needs, all of which can negatively impact worker satisfaction and productivity, and leads to decreased customer satisfaction based on negative experiences. As evidence of this, Best-in-Class organizations achieved 35% average year-over-year improvement in staff productivity and 25% average year-over-year gain in employee satisfaction, whereas Laggard organizations suffered a 7% yearover-year performance decrease across both metrics. Organization Workforce scheduling processes must be adopted, enforced, and reviewed consistently to optimize value. Especially in a down economy, an organization's executive leadership must work closely with key HR and operational leaders to understand and / or communicate the important role they play in managing labor expenses, establishing and enforcing processes, and improving systems. Whereas 77% of Best-in-Class and 70% of Industry Average organizations have senior leadership buy-in pertaining to the importance of scheduling, less than half of Laggard organizations do. Managers and supervisors must also buy-in to workforce scheduling processes because they are responsible for setting schedules and assigning key resources to manage costs as well as maximize effectiveness. Seventyfour percent (74%) of Best-in-Class organizations have this level of buy-in,

17 Page 17 whereas only 44% of Laggards do. Indeed, it is important to gain manager and supervisor buy-in regarding the importance of workforce scheduling. However, with or without their buy-in, these managers / supervisors must be held accountable for following the organization's processes pertaining to scheduling. Otherwise, buy-in may represent nothing more than convenient lip service. In addition to senior management support, a commonality among Best-in- Class organizations is internal collaboration pertaining to systems and compliance. For example, 62% of Best-in-Class organizations involve IT in scheduling technology decisions to ensure the system is compatible with existing systems versus 42% of all other organizations. In addition, 65% of Best-in-Class organizations involve HR and Legal representation to ensure all compliance needs are addressed (i.e. employee labor laws) versus 59% of Industry Average and 37% of Laggard organizations (Figure 8). Figure 8: Internal Collaboration to Foster Scheduling Process Due to the nature of our business, we have certain core competencies that we map to which have become increasingly harder to find. Mapping core competencies to project needs increases the productivity of our employees. To maximize the utilization of our employees, they have to be efficient, have the right mindset, and be independent enough to thrive in our culture. ~ Len Costa, Director of Talent Acquisition, Windmill International Inc. 70% 60% 62% Best-in-Class All Others 65% Percent of Organizations 50% 40% 30% 20% 42% 51% 10% 0% Involve IT in scheduling technology decisions Knowledge Management Collaboration between HR and Legal representation N=212 To ensure that staff schedules are aligned with actual business needs requires not only an understanding of what the business needs are (both internal to the organization as well as external i.e. customer demands), but also insight into those within the workforce that are available and able to perform the job competently. Competency management is one of the most important factors to optimize workforce productivity and performance, especially in fields where specific knowledge or skills are paramount to the job at hand (see Aberdeen Insight on competency management in this chapter for more details). The use of competencies among Best-in-Class organizations to improve the allocation and effectiveness of scheduling is documented in Figure 9. Aberdeen's results indicate that 62% of Best-in-Class organizations are able to assess their Fast Facts 59% of Best-in-Class organizations indicate the ability to accurately forecast future staffing requirements compared with only 38% of Industry Average and 26% of Laggard

18 Page 18 workforce against competency profiles to determine skills and / or knowledge gaps as compared to only 35% of Industry Average and 26% of Laggard (Figure 9). Figure 9: Competencies to Align Labor Supply and Demand Best-in-Class Laggard Industry Average Assess workforce against competency profiles to determine gaps 26% 35% 62% Competency profiles for key positions are available 35% 47% 56% Knowledge of gaps between requirements and skills 33% 47% 56% Create schedules based on skills / certifications / seniority 32% 48% 56% 0% 10% 20% 30% 40% 50% 60% 70% N=212 In addition, 56% of Best-in-Class organizations provide managers and / or supervisors with knowledge of gaps between labor requirements and worker / employee skill levels. The same percentage of Best-in-Class (56%) make competency profiles needed for key positions available to managers and supervisors. All of this helps managers and / or supervisors to create schedules based on variables such as skills, certifications, or seniority. Aberdeen Insights Competency Management (Where non-hr Should Turn to HR) At 97% of organizations represented in our survey sample, the responsibility of scheduling falls in the hands of non-hr business managers, including: production managers (18%); project managers (15%); general managers (13%); and regional or business unit leaders (13%))., As these business executives advance their scheduling prowess in terms of their ability to look longer-term and plan for needed skills, they should solicit the assistance of their HR counterparts. Thirty-eight percent (38%) of the 216 executives surveyed for Aberdeen's August 2008 report, Strategies in Workforce Planning: Using Talent Acquisition and Performance Management Programs to Meet Tomorrow s Business Needs, indicated HR as the primary decision maker; continued

19 Page 19 Aberdeen Insights Competency Management (Where non-hr Should Turn to HR) and 67% of the 379 executives surveyed for Aberdeen's August 2007 research report, Competency Management: The Link Between Talent Management and Optimum Business Results, indicated HR as the primary decision maker. To place the right workers with the right skills on the right assignment at the right time, organizations must have knowledge of the skills and / or competencies required for each (anticipated) job as well as the skill / competency levels of each current worker. To this extent, 59% of Bestin-Class organizations indicate that managers can accurately forecast future competency requirements, as compared to only 34% in Industry Average and 28% of Laggard. If your organization does not yet have competency models in place for each job role, a good place to start is by surveying and / or interviewing your best performers with the intent to identify commonalities that have led to their success. Another effective starting point is the use of your organization's key core values (if defined). Also, many workforce management solution providers offer Scheduling solutions that have integrated competency models and / or assessments. Another critical Best-in-Class differentiator pertaining to workforce scheduling is providing workers visibility into their personal schedules as well as the ability to suggest schedule changes. Best-in-Class organizations are nearly twice as likely as Industry Average and nearly five-times more likely than Laggard to enable workers to view or change their schedules in real-time (Figure 10). For the past couple of years, we ve utilized a scheduling software tool that aligns customer traffic patterns by sales, by day, by hour. This allows our store managers to plan staffing against store traffic patterns based on historical data, to more accurately determine how many people they ll need and when. Customer satisfaction was the real driver to this initiative, but we have also experienced the opportunity for a reduction in payroll labor as a result. ~ Laurie LePine, SPHR Vice President of Human Resources, Crabtree & Evelyn, Ltd. Figure 10: Employees Can View / Change Schedules in Real-Time 60% 50% 53% Percent of Organizations 40% 30% 20% 10% 29% 9% 0% Best-in-Class Industry Average Laggard N=212

20 Page 20 By providing this real-time visibility to employees, Best-in-Class organizations not only empower their workers, but also help managers reduce some of the administrative burden pertaining to schedule changes. This helps to free managers to focus their efforts deemed more strategic (i.e. longer-term planning). According to Aberdeen's research, organizations that enable workers to view or change their schedules in real time experienced greater year-over-year performance in several KPI in comparison to those that do not offer this ability (Table 5). Table 5: Year-over-Year Average Improvement KPI Time spent on tactical workforce scheduling activities Employee retention Revenue per employee Employee satisfaction Can View / Change Schedules in Real- Time Can NOT View / Change Schedules in Real-Time 14% 3% 17% 13% 12% 4% 2% 2% Technology Nearly six in 10 Best-in-Class organizations maintain an updated central repository for all workforce scheduling data (59%). This central repository is especially critical to enable optimal scheduling and resource allocation decisions (i.e. allocating and utilizing the same worker across multiple projects or jobs). It also allows organizations to run consistent comparisons of scheduling effectiveness more easily across business units and project teams. A central repository also makes it easier for an organization to leverage scheduling data in other workforce management applications such as Time and Attendance, Forecasting, or Absence Management. From a technology adoption standpoint, 56% of Best-in-Class organizations indicate that their workforce scheduling system is either fully or partially automated. However, a similar percent of Industry Average and Laggard (59% respectively) indicate the same. Aberdeen's research has revealed that the composition of software solutions utilized by Best-in-Class organizations for workforce scheduling represents a cornucopia of workforce management solutions, primarily software specific to the management of labor time, attendance, absence, and scheduling (Figure 11). The most adopted technology utilized as part of their workforce scheduling efforts is Time and Attendance software (utilized by 68% of Best-in-Class and 65% of all other organizations). According to Aberdeen's February 2008 research report, Evolving Time and Attendance: Foundation for Workforce Management Improvements, "The benefits of merely getting time and attendance data more accurate should not be understated. Those benefits include more accurate payroll for contact labor, stricter compliance with workforce regulations, and verifying that billings from consultants accurately

21 Page 21 reflect their efforts. Another advantage is to ensure equitable pay to employees based on the type of work they do." Figure 11: Technology Most Used by Best-in-Class with Scheduling Time and attendance software Absence management software 50% 68% Fast Facts The top five metrics Best-in-Class organizations assign to workforce scheduling on a scale of 1 to 5 (where 1 equals least critical and 5 equals most critical): Customer satisfaction = 4.53 Workforce capacity utilization = 4.27 Scheduling software Manager self-service software 41% 35% Staff productivity = 4.21 Employee performance = 3.97 Employee satisfaction = % 25% 50% 75% Percentage of Organizations N=212 The next most utilized software among Best-in-Class for workforce scheduling is Absence Management software. This type of software is utilized by 50% of Best-in-Class and 45% of Industry Average, but only 30% of Laggard organizations. Absenteeism can attribute to a large share of payroll. In addition, this type of software can help organizations comply with rules and regulations (union, federal state, etc.). Also, it can aid with performance management as it can help organizations identify workers with attendance issues so managers are able to schedule around those individuals and look more towards either assigning them to development activities or performance plans that can help get them on the right track or move them out of the organization altogether. Forty-one percent (41%) of Best-in-Class organizations utilize dedicated scheduling software compared to 46% of all other organizations. Despite the limited adoption of this technology, Aberdeen's research has revealed that organizations that do use scheduling software are experiencing greater year-over-year performance gains in two critical areas: overtime costs and time spent by workers on tactical workforce scheduling activities (in billable hours). See the Technology Insight in this chapter for additional details. Performance Management Despite the impressive gains achieved by Best-in-Class organizations as highlighted in Table 1 of this research report, Aberdeen's data suggests that the actual impact of effective scheduling may not be completely understood or acknowledged within most organizations. While Best-in-Class

22 Page 22 organizations are 37% and 70% more likely than Industry Average and Laggard, respectively, to have identified the specific business pain points that strategic workforce scheduling can improve or rectify, only 56% of Best-in- Class indicate they have performed this due diligence. In addition, whereas Best-in-Class organizations indicate they are 30% and 180% more likely than Industry Average and Laggard, respectively, to regularly review the impact of scheduling on key business metrics, only a slight majority of Best-in-Class (56%) actually take this important step. Figure 12 (below) illustrates the metrics that Best-in-Class organizations view as most critical to workforce scheduling. Best-in-Class organizations are nearly two-times more likely than Laggard (41% versus 22%, respectively) to have clearly defined metrics against which the impact of scheduling is measured. However, the minority adoption of this important step highlights the limited ability among most organizations to truly comprehend the application or anticipated impact of effective scheduling, as well as ascertain the data to validate these assumptions. Respondents were asked to rate on a scale of 1 to 5 the top five metrics that were most critical to workforce scheduling for their organization. Figure 12: Top 5 Metrics Most Critical to Workforce Scheduling 5 Most Critical Percent of Organizations Less Critical Customer Satisfaction Workforce Capacity Utilization Staff Productivity Employee Performance Employee Satisfaction N=212 Especially in a down economy, when cost pressures and the value of every customer relationship are magnified, it is imperative that managers, executives, and employees understand what they can impact to help their organization adapt and grow. For example, managers and / or supervisors at 71% of Best-in-Class organizations understand the impact staff costs have on their organizations' profitability versus only 54% of Laggard organizations. However, whereas 47% of Best-in-Class organizations indicate an understanding exists of how specific job roles have direct impact on productivity or profit, only 22% of Laggard organizations currently have this ability. With this knowledge, for example, a manager of a large hotel / casino

23 Page 23 may be able to effect customer sales or spend at the casino by staffing a personal concierge to recommend and book hotel services that keeps the person happy and spending money at the property's restaurants and spa, versus going offsite to competitive venues. Aberdeen Insights Technology While only 41% of Best-in-Class organizations currently utilize software tools designed expressly for workforce scheduling, Aberdeen's research has revealed that, on average, organizations that utilize these tools have achieved superior year-over-year performance gains in two important key performance indicators that have direct impact on an organization's bottom line (Table 6). Table 6: Year-over-Year Performance Improvement in KPI Key Performance Workforce Scheduling Software Indicator Use Do NOT Use Time spent on tactical workforce scheduling 8% 4% activities (in billable hours) Overtime costs 16% 13% It is important to highlight the magnitude of a 1% to 3% performance improvement in the aforementioned KPI. Consider the current environment in retail. As a result of tremendous pressure to decrease operational costs, retailers are closing stores and cutting staffs. However, the consumer expectation continues to grow. With an automated scheduling function, store managers can forecast staffing requirements based on seasonal demand, new product launches, or promotions. This would enable them to marginalize issues pertaining to over- or understaffing, as well as free-up store managers from the administrative task of building schedules. In addition to allowing them to spend their time on driving sales and enhancing their customers' in-store shopping experiences.

24 Page 24 Chapter Three: Required Actions Whether a company is trying to move its performance in workforce scheduling from Laggard to Industry Average, or Industry Average to Bestin-Class, the following actions will help spur the necessary performance improvements: Laggard Steps to Success Gain support and buy-in from key stakeholders. Currently, only 48% of Laggard organizations have executive-level support for their scheduling initiatives. Senior level buy-in is critical, especially in a down economy. However, to maximize scheduling efficiencies and achieve consistency pertaining to the use and benchmarking of scheduling, it is just as important to gain buy-in from the managers and supervisors. Laggard organizations can also improve their results from effective scheduling by including IT in technology decision making, as well as the company's legal department to ensure the company is adhering to all regulations and rules as it applies to labor allocation and hours. Maintain and update scheduling data in a central repository. Disparate data sources are an impediment to HR's and a company's ability to measure, validate, and forecast the business impact of its endeavors. Only one-third of Laggard organizations maintain a central repository for scheduling data. Make sure your organization partners with a provider that provides either a suite of workforce management solutions that share a common platform or has a dedicated data repository for all scheduling activities that can then ingrate (i.e. via an API) to your other system(s) used for workforce management. Measure and report key workforce management metrics to major stakeholders on a regular basis. An effective means to gain buy-in from key stakeholders is to provide documented impact of related work. However, before you can measure, you must be able to identify what you want to measure, as well as establish benchmarks against which you will measure your subsequent efforts. Currently, only one-third of Laggard organizations have identified specific business pain points that strategic workforce scheduling can improve and a mere 22% have defined the actual metrics against which the impact of scheduling will be measured. Fast Facts 62% of Best-in-Class organizations measure workforce productivity on a regular basis as compared to 27% of Laggard 41% of Best-in-Class organizations routinely measure time spent on tactical scheduling activities versus only 19% of Laggard "As a contractor, it is necessary to keep in constant contact with out clients so that we may know exactly what our workforce needs are for client projects. This is especially important because customer satisfaction is of the utmost importance to Securitas International. Keeping constant contact with clientele enables us to accurately forecast our labor which assists in the reduction of overtime and overstaffing of labor 99.9% of the time. ~ Terry Moore, HR Specialist, Securitas Security Services USA, Inc. Industry Average Steps to Success Assess workers against competency models / profiles to understand readiness and gaps. Industry Average organizations are 77% less likely than Best-in-Class provide its managers and