Integrating Workforce Management in Real Time
Date: Wednesday , February 09, 2011
The most valuable and expensive strategic asset to any organization are employees. Having the right people at the right place at the right time is the key. This is why proper workforce management is very important in organizations and here is where Kronos comes in. “We are the 800 pound gorilla in this space, there is nobody near us. We have around 40,000 customers which include 626 of the Fortune 1000 users. We extend what typical ERP and HR solutions offer in the administrative layer and bring it down to the last man.” says James Thomas, Country Manager, Kronos, in a candid interview to siliconindia.
Define workforce management
There are four dimensions regarding workforce that are critical for the organization. First, ‘time’, the number of hours an employee spends in the company; second, ‘absenteeism’, leaves and unauthorized absence of employees; third, ‘schedule’, having the right person in the right place at the right time to do the right work; and finally, ‘activity/task’, what an employee does during his time in the office.
Kronos automates and interconnects all from the HR system, to the time, absence, schedule, activity dimensions, integrate them real time to give a view and manage the 360 degree day in the life of an employee, and connect this to payroll to ensure that the company is paying people accurately. Investments in HR automation, is a high return, low risk game.
What are the common workforce challenges in an enterprise?
Absence, whether it is planned or unplanned, has an impact on productivity and cost. For example, if an employee takes leave for one month and the role is filled by a replacement worker during that duration, the impact on productivity and cost will still be present as the efficiency of a replacement worker is somewhere between 70 – 80 percent. Unplanned absence costs even more. Typically planned and unplanned absence contributes to 25 – 35 percent of payroll cost. This means around one third of the total payroll is paid on absence. This is a major challenge to organizations as this causes significant productivity and cost leakages.
Most companies are dealing with high rates of attrition of their workforce. Typically the reason is the mismatch between what one is getting paid for and the amount he is working. There is no magic formula to stop attrition. Performance appraisal once a year is not going to help. A more objective formula is needed to track this. Knowing people better in the operational realm helps in understanding them.
How much can Kronos help companies to save?
Most organizations in the country today follow manual scheduling, which is error-prone and a strain on both store productivity and customer service. A workforce management solution would increase sales conversion rates.
By giving an integrated view, Kronos helps a company to save 3-5 percent on its total payroll cost. This is not just a onetime return, but a regular annual return that comes every year. Our solutions take any where between 3 to 6 months to deploy and companies will start seeing returns with in a year as we make some tangible bottom-line impact.
How is the market/customer response?
We have always received a positive response from the customers. We have had customers ranging from Nursing Directors and CFOs who say they are overwhelmed by the product. Usually in a hospital, a nursing director spends 3-4 hours a day in scheduling or rostering nurses but by implementing our solutions, the same task can be completed in about five minutes. But an initial hurdle we face while customer traction is making the management see the urgency for the need of a workforce management solution.
In most cases one sees that when the company faces as financial crunch due to recession or other factors, it relieves about 5 – 10 percent of its workforce. This is because the single largest controllable cost in a company is payroll cost which varies from 70 percent for an IT/ BPO, 40 percent for a hospital to 6 percent for a manufacturer. But what we are trying to do is make the management aware that if they properly manage workforce, they wouldn’t have to do this.
How is the Indian market different and what are your plans for it?
We launched our India operations in early 2007 in a bid to support our global clients that are expanding operations in India but we have now been gaining traction amongst local customers too. As of now we have about 40 customers in India. But we are still relatively an early entrant in the Indian market as it is still 85 percent non-penetrated. The amount of non-productive time and absence is higher in India when compared to that in developed countries. This provides us with a great opportunity.
At present though we continue to concentrate on technologically mature IT and manufacturing sector, we see an immense scope in public sector as well. We also plan to double our workforce here in the next few years.