Aberdeen WFM For SMB


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Whitepaper highlighting the importance of workforce management solution for the 500-1500 ee SMB market

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Aberdeen WFM For SMB

  1. 1. September 2012 Workforce Management for the SMB: Big Results for Small and Medium Businesses Sector InsightSmall and medium businesses (SMBs) are at the heart of economic growth Aberdeen’s Sector Insightsfor many communities and regions. The SMB market, defined as provide strategic perspectiveorganizations with 1,000 or fewer employees, has dynamic needs and fewer and analysis of primaryresources to meet them than large organizations. This Sector Insight looks research results by industry,at how workforce management solutions help the SMB improve market segment, or geographyproductivity and business results, while relieving some of the administrativeand tactical burden previously associated with such efforts. Based on datacollected between May and August 2012 from 174 organizations, 81 ofwhich had fewer than 1000 employees, this document offers insights andrecommendations that will help companies succeed through betterworkforce management.The Big Impact of Workforce Management Sector DefinitionIn the past, SMBs may have thought that only large companies needed orcould afford workforce management solutions. They may also have For this study, Aberdeenimplemented a Core Human Resource (HR) information system to track defines small and mediumemployee data, or an automated payroll solution, and considered it businesses (SMBs) as thoseworkforce management. However, true workforce management, for any with 1,000 or fewer full-timesize organization, involves a combination of integrated Core HR, payroll, employees.and time and labor management solutions. Many SMBs today are looking toworkforce management automation and labor data integration to drivebetter business results, as Figure 1 illustrates. DefinitionFigure 1: Challenges Driving Workforce Management Aberdeen defines workforce management as inclusive of Core HR, payroll, time and attendance, scheduling, and absence management Source: Aberdeen Group, September 2012This document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologies provide for objective fact-based research andrepresent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.
  2. 2. Workforce Management for the SMBPage 2SMB organizations face many of the same challenges as their largercounterparts, but are even more likely to feel the resource crunch when itcomes to meeting them. These organizations are 49% more likely (42% Fast Factsversus 29%) to cite time spent on manual transactions as a critical challengedriving their focus on workforce management. Given the increasingly √ SMB organizations are 49%diverse and dispersed workforce that comprises even smaller organizations more likely to cite time spent on manual transactionstoday, using solutions to automate and understand total workforce as a critical challenge drivingmanagement activity makes sense. In addition, SMBs typically have focus on workforceproportionally smaller HR and IT departments, making productivity and managementease-of-use essential when considering workforce management solutions.SMBs have complex needs, but must find solutions that make sense for theireconomics and staffing models.Data Driven Decision MakingThe SMB marketplace is adopting a broader definition of workforcemanagement that includes time, labor, and even scheduling, to offercompetitive advantage and make operations more efficient and effective. As Fast FactsFigure 2 below shows, organizations are looking to automation and analytics √ Organizations withas key strategies to drive business results and address these critical automated time andworkforce challenges, including improving workforce utilization. Aberdeens attendance solutionsJuly 2012 Workforce Management study found that organizations with achieved 12% greaterautomated time and attendance solutions achieved 12% greater workforce workforce capacitycapacity utilization than those with manual time and attendance processes. utilization than those withParticularly organizations with smaller headcount need to focus on getting manual time and attendancethe most out of every member of their workforce. processesFigure 2: Strategic Actions Source: Aberdeen Group, September 2012Analytics can seem daunting, the exclusive domain of larger organizations,but in reality analytics is nothing more than using data to improve decision-© 2012 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  3. 3. Workforce Management for the SMBPage 3making. Organizations of all sizes must use all available data to makedecisions in todays competitive marketplace. Automation of workforcemanagement systems – like tools for tracking time and attendance,absences, or managing schedules – lays the foundation for this kind ofworkforce analytics. Automated solutions make gathering more accuratedata and sharing it between systems and across the enterprise morefeasible. This allows the organization greater visibility into workforce data,which can help them make decisions about labor needs, improvingproductivity, and labor cost management.Reporting at the Right LevelWhile SMBs are ripe for the use of automation and analytics to alleviatemanual burden and drive results like the improved workforce capacityutilization mentioned above, the needs of this segment are different thanthose of larger organizations. Reporting and analytics must be at theappropriate level to be useful for the SMB. Reporting is not necessarilyabout global analytics dashboards, but more often about the ability to allowmanagers to run queries and reports as they make operational decisions ona day-to-day basis. The SMB leader needs to bring together workforce andother business data to understand the drivers of productivity andperformance. While the SMB sector is just beginning to use automatedreport functionality, this is an area of strong expected growth in the comingyear (Figure 3).Figure 3: Reporting Functionality for the SMB Source: Aberdeen Group, September 2012Visibility into data and tracking activity, as it relates to overall productivity,are key areas in which SMBs are leveraging reporting today. By providing© 2012 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  4. 4. Workforce Management for the SMBPage 4employees and managers with data, these organizations are streamliningoperations and putting information in the hands of decision makers.Technology Enabling FlexibilityGiven the economic and staffing realities of the SMB, many of theseorganizations are exploring new technology options to deliver functionalitythroughout their organizations. Workforce management is no exception.Even smaller and midsize businesses are operating globally, managing Fast Factsmultiple worker types, and combining information in ways that present new √ SMB organizations are 45%complexities when it comes to managing data and systems. As software as a more likely to indicate thatservice (SaaS) and cloud-based delivery models become more prevalent, their preferred deliveryorganizations are turning to these technologies to enable workforce model for Core HR andmanagement automation and integration. According to Aberdeens May workforce management2012 Integrated HCM report, organizations with less than 1,000 employees solutions is a SaaS or cloud-are 45% more likely than larger organizations to indicate that their based modelpreferred delivery model for Core HR and workforce managementsolutions is a (SaaS) or cloud-based model (42% versus 31%). Typically thesetechnology options do not require as much time or resource investment toimplement, and can help reduce the burden on IT to support the software,while also helping businesses remain more flexible as they grow or theirneeds change. These technology solutions also offer a foundation for othercritical functionality such as mobile access to data.More SMBs are using mobile for workforce management tools. These toolsnot only improve user adoption among managers and employees, but alsoto ensure greater accuracy in data collection, and greater engagement. TheSMB segment is leading the way in the use of mobile tools for workforceFigure 4: Features of Mobile Workforce Management Solutions Source: Aberdeen Group, September 2012© 2012 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  5. 5. Workforce Management for the SMBPage 5management: these organizations are 65% more likely to have mobilesolutions than are their larger counterparts (28% versus 17%). Self-service isa huge driver for this adoption of mobile tools, as shown in Figure 4.When managers and employees can access their time and labor and CoreHR data directly, the SMB organizations limited HR resources are freed tofocus on strategic and value added services. Mobile self-service alsoresponds to the growing trend of consumerization in business technology.Employees have become accustomed to using mobile devices for anynumber of household and personal tasks, and expect the same flexibilityfrom their employer. As such, self-service mobile tools can improve bothemployee engagement and organizational efficiency. This is particularlyimportant to the SMB sector, since self-service is a driver of operationalexcellence, and is a capability in place at 94% of Best-in-Class organizations.RecommendationsSmall and medium businesses looking to take advantage of workforcemanagement solutions to drive efficiency and effectiveness should considerthe following recommendations. • Automate and integrate all of workforce management. Automated and integrated Core HR, pay, and time and labor data is critical to efficiently and effectively manage todays small or medium business. Organizations should look to solutions that automate these aspects to gain the greatest benefit. Automation ensures consistency across the organization, reduces the tactical burden on HR, and lays the foundation for self-service, mobile self-service, and powerful analytics. • Embrace data-driven decision-making. Analytics and reporting is all about driving action. To create meaningful analysis, organizations must have a multifaceted view of their business and the individuals within it. Integrated data and systems form the foundation which allows organizations to apply meaningful analytics to their operations, and ultimately improve business outcomes. But tools and technology are not enough. Organizations must also cultivate an analytical mindset, where HR and business leaders all feel comfortable using data to drive decisions. Any technology solution should take into account the need to drive analytics and deliver data to business decision makers as a critical design and selection criteria. • Consider the technology foundation. New ways of operating your business require new ways of leveraging technology solutions. As the SMB sector seeks efficient, automated HR data and processes, they must keep in mind the financial and time investment required to implement such solutions. SaaS and cloud-based delivery models are new options that organizations should explore to help them achieve not only their unification goals, but to realize cost savings and to expedite delivery as well.© 2012 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  6. 6. Workforce Management for the SMBPage 6For more information on this or other research topics, please visitwww.aberdeen.com. Related Research Workforce Management 2012: Analytics into Action: Workforce Planning Efficiency, Effectiveness and for Talent Success; March 2012 Engagement; July 2012 Human Capital Management Trends Integrated HCM: Visibility, Readiness and 2012: Managing Talent to Lead Results; May 2012 Organizational Growth; January 2012 Author: Mollie Lombardi, Vice President and Principal Analyst, Human Capital Management (mollie.lombardi@aberdeen.com)For more than two decades, Aberdeens research has been helping corporations worldwide become Best-in-Class.Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provideorganizations with the facts that matter — the facts that enable companies to get ahead and drive results. Thats whyour research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% ofthe Technology 500.As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community oflocal, regional, national and international marketing executives. Combined, we help our customers leverage the powerof insight to deliver innovative multichannel marketing programs that drive business-changing results. For additionalinformation, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call(800) 456-9748 or go to http://www.harte-hanks.com.This document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologiesprovide for objective fact-based research and represent the best analysis available at the time of publication. Unlessotherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not bereproduced, distributed, archived, or transmitted in any form or by any means without prior written consent byAberdeen Group, Inc. (2012a)© 2012 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897