What is workforce management? Definition and best practices

Robert Bruce

BLUEPRINT

Published 7:38 a.m. UTC Dec. 14, 2023

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© Doug Engle/Ocala Star-Banner / USA TODAY NETWORK, Imagn Images

Workforce management (WFM) is the process by which a company makes all of the complex factors of running a successful business come together to maximize an organization’s productivity and competency.

The concept of workforce management began in the 1980s in call centers to improve customer service and call center performance. Many other industries have since adopted workforce management to improve their own processes.

It’s an intentional process that starts with top-level leadership defining strategic goals, so every employee knows their role and has clear direction on expectations. The idea is to have every employee positioned to succeed and in the right place at the right time.

Featured payroll software offers

OnPay

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Via OnPay’s website

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$40 per month plus $6 per employee

Direct deposit

Yes

Rippling

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Via Rippling’s website

Monthly fee

$35 per month + $8 per user

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Yes

Gusto

Learn More

Via Gusto’s website

Monthly fee

Starting at $40 plus $6 per month per employee

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Yes

SurePayroll

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Via SurePayroll’s website

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$29.99 per month plus $5 per employee

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Yes

What are the benefits of workforce management?

Workforce management software offers a wide range of benefits, including:

Streamline payroll: Human error is eliminated through a centralized hub with automated processes that analyze data and identify patterns to make payroll more reliable.
Maximize productivity: Employee attendance and time data is tracked to allow employers to improve time management productivity if needed and even implement a scheduling system.
Manage compliance and risk: Tracking tools allow companies to save time while making sure they are following up-to-date compliance measures and reducing risk. Accompanying recordkeeping information will help in case of an audit.
Manage costs: With real-time information on hand, managers can forecast future expenses and staffing needs and adjust budgets if needed.
Applicant tracking: Workforce management tools give HR leaders the information they need to spot organizational needs and hire the right people for those positions. These tools also help with talent recruitment and retention.

What does workforce management include?

A solid workforce management solution will provide a variety of functions to help employers. When shopping around for workforce management software, keep some of the following key functions in mind.

Scheduling

Workforce management software allows managers to filter through different criteria — such as experience, preferences and availability — to create optimized and balanced schedules that place employees in the right spots on the right days.

Good software will also allow managers to look at past data to get a feel for likely labor needs as they schedule in the future.

Absence and overtime management

A good workforce solution can track accumulated employee absences and even trigger alerts when an employee is approaching overtime accumulation levels. A feature like this also allows managers to regulate overtime hours to avoid unexpected payroll costs.

Learn how to calculate overtime with our guide.

Labor forecasting

Life happens — for both you as a company and your employees. You may go through a season where turnover is light and a season where turnover is high, and even when workers are more absent than usual.

A workforce management tool allows you to see that info in real time so you can stay within labor budgets. And it’s not just turnover — good workforce tools allow you to know when your workers may be more or less available so you can model future staffing issues and resolve them before they pose a risk to your operations.

Analytics

Customizable dashboards allow employers to run historical reports to see trends in many filtered categories and make adjustments if needed. These tools also provide insights into improving employee productivity and capacity.

Compliance

Keeping up with changing state and federal labor laws can be challenging. A workforce solution provides the real-time and historical data you need to stay in line with wage and hour laws and employer policies. They can also help with valuable reporting information in the case of an audit.

Featured payroll software offers

OnPay

Learn More

Via OnPay’s website

Monthly fee

$40 per month plus $6 per employee

Direct deposit

Yes

Rippling

Learn More

Via Rippling’s website

Monthly fee

$35 per month + $8 per user

Direct deposit

Yes

Gusto

Learn More

Via Gusto’s website

Monthly fee

Starting at $40 plus $6 per month per employee

Direct deposit

Yes

SurePayroll

Learn More

Via SurePayroll’s website

Monthly fee

$29.99 per month plus $5 per employee

Direct deposit

Yes

Frequently asked questions (FAQs)

Workforce management software allows employers to streamline payroll; manage labor, productivity, compliance, risk and costs and access applicant tracking. It can be used by individuals, small teams, mid-sized businesses and large multi-dimensional or global enterprises.

Common challenges include scheduling, managing overtime and absences, labor forecasting, managing compliance, streamlining payroll and tracking applicants through the recruitment, hiring and onboarding process. A workforce management solution helps employers counter all of these challenges through analysis, automation and collaboration.

Workforce management software companies typically offer a wide variety of pricing plans. For example, many include free plans for individuals to get started and see if a workforce management software is right for them, as well as plans for small teams to large enterprises that can range from $7 to $20 per user per month when paying annually.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Robert Bruce

BLUEPRINT

Robert Bruce has been a full-time writer for nearly 20 years. His work has been featured in US News & World Report, Yahoo Finance, The Penny Hoarder, The Money Manual, WGN Chicago, Nashville Lifestyles Magazine, among others.

Alana Rudder

BLUEPRINT

Alana is the deputy editor for USA Today Blueprint's small business team. She has served as a technology and marketing SME for countless businesses, from startups to leading tech firms — including Adobe and Workfusion. She has zealously shared her expertise with small businesses — including via Forbes Advisor and Fit Small Business — to help them compete for market share. She covers technologies pertaining to payroll and payment processing, online security, customer relationship management, accounting, human resources, marketing, project management, resource planning, customer data management and how small businesses can use process automation, AI and ML to more easily meet their goals. Alana has an MBA from Excelsior University.