Running a small to mid-sized business is hard work, and you won't catch any breaks just because you only have two hands and 24 hours in a day. Fortunately, there is a slew of software available now to help small business owners get everything done—and stay in compliance with applicable laws while doing it. Chief on that list, and one category you may not have considered, is workforce management software.
Why Should SMBs Use Workforce Management Software?
Here's the basic reason you'll want to consider using workforce management software: operational efficiency. "The common reasons why SMBs fail are out-of-control growth, poor accounting and operational inefficiencies," says Mike Salem, the co-founder and CEO of Vorex, a provider of cloud-based, professional services automation (PSA) software for small businesses. One of your biggest reasons for using this type of software is to ensure you're business operates at peak efficiency, and that you get the most out of your staff's efforts.
And here's the number one reason you'll likely feel you have to use workforce management software: The Affordable Care Act, a.k.a. Obamacare. Small business analyst Laurie McCabe explains that driver very well in her blog post:
"Many [SMBs] have put workforce management solutions on the back-burner. They think of that as a cost area so they often limp along with a bunch of disconnected things and manual tracking to take care of things like payroll and time and attendance, scheduling and benefits.
…the Affordable Care Act has made everybody kind of sit up and pay attention. We've gotten a little bit of a reprise [sic] because they've delayed the mandate for the companies with more than 50 full-time employees until next January to provide health insurance. It was supposed to kick in this January.
But, now everybody is realizing because a lot of, unfortunately, very negative publicity and all these issues that this is very complicated and it's a situation that's in flux.
SMBs are worried, and rightly so, about uncertainty, costs and regulatory risks. They are starting to realize that need to be able to more easily do things like calculating employee eligibility for benefits, choosing the right plans, managing compliance and keeping costs under control.
So, for purely practical reasons, SMBs that haven't paid much attention to automating in the workforce management are going to start to do so to gear up for 2015."
If those sobering words aren't enough to settle the issue for you outright, then take a look at these five reasons for using the software.
5 Ways Workforce Management Software Helps SMBs
1. Saves time—for you or your HR person
How much time do you, or your HR manager, waste each week—or even everyday—trying to make a work schedule? "Managers can use workforce management software to organize their employees and to streamline HR tasks, and ensure they're not spending their limited time on administrative busywork," says Jennifer Aubin, president and co-founder of OrganizeYourPeople, an HR management software provider. "It can save your designated HR person hours per week so that he or she can focus on the human aspect within your corporate environment."
Plus, you know those times when employees suddenly call-out sick, or you get slammed with orders and you need to add staff in a hurry? Workforce management software—especially if it's cloud-based—makes those situations much easier to address. You can use it wherever you are instead of racing back to the office to call people in.
However, not all workforce management software is created equal. Be sure to give several titles a trial spin to see which one meets your needs and does indeed save you time.
"My number one tip when choosing workforce management software: before making any purchases, make sure that you or your employees would definitely use the software in the daily workflow, and make sure that time it takes for maintenance and for learning the software is minimal," says Berrin Sun of Ragic, a data management provider. "They should definitely focus on their own business needs, and not waste time and resources to fit their business into a software non-solution," she said.
2. Increases staff productivity
Like most business technology tools, workforce management software is designed to improve productivity. However, how you wield it has as much to do with productivity as the software does.
"From my experience, you can use workforce management software to restrict employees into doing their jobs, or you can use it to help employees excel in their jobs by adding an element of accountability," says Robbie Sherrard, a Web developer and founder of Checklist, an app for real estate brokers and agents.
"My advice is to be sure your employees or agents understand the value the software brings to them, and reward them for using it effectively."
In other words, if all you're using the software for is to crack the whip, the software may backfire on you. Employees will likely try to game the system to avoid punishment. Sure, you can—and should—dismiss workers who don't produce at the expected level. Just be careful not to use this software to drive good employees to produce beyond human capabilities. If you do, your best workers may permanently leave your employ.
3. Controls logistics and day-to-day staffing needs
This software lets you see who is working where and how well the work is progressing. With workforce management software, when you see one project is bogging down or needs extra hands for some reason, you can easily review other projects and determine which workers you can reassign to get the lagging project back on course without jeopardizing other projects. You can use it to address many logistics issues to keep your operation running smoothly and profitably.
"The financial and time gains are exponential," says David Bitton, CEO of PayPanther, a provider of project, customer relationship, time, and invoicing management software. "Most SMBs realize a drastic increase in overall efficiency and performance by quickly seeing what activities eat up most of their time and by optimizing their workforce for maximum productivity."
4. Increases staff communications and morale
Did you not get the message that five employees will be out today, because the person who took the messages forgot to tell you—or left you a sticky note you didn't see? Well, you can kiss that problem goodbye.
"These programs offer a way for employees and managers to communicate with each other in real-time, which can take a lot of stress and uncertainty out of something as complex as scheduling 50 or more employees in a given week or month," says Chad Halvorson, CEO of ThisClicks, makers of When I Work, a mobile employee scheduling and communication platform. "When you empower employees to directly assist managers in the creation and management of a team work schedule, it can drastically affect the attitude and reliability of an entire organization for the better. Not to mention, it's a whole lot cleaner and easier than having to thumb through 100 sticky notes on your computer."
5. Improves legal compliance and avoid thousands of dollars in penalties
The new Affordable Care Act regulations aren't the only thing you need worry about in terms of hiring and staffing issues. Local and state laws vary and often change. Add those to federal regulations, and you'll have plenty of opportunity to find your business on the wrong side of the law.
Workforce management software can track hiring and scheduling activities and alert you to any that may put you at risk. Is Sam over the number of hours he's allowed to drive the truck on a long haul? The system will warn you before that can happen. Do the minimum age requirements for certain machine operators vary state to state? The software system will tell you which workers meet that requirement in your operation's stores, work shops and offices.
"Many, if not most, small employers are way out of compliance when it comes to tracking hiring information, disciplinary procedures, etc.," says Jeff Russell, founder of GeniusHR workforce management software. "By accurately managing timekeeping and employee leave, companies can often recoup the entire cost of the software because just a 1 percent savings can add up to thousands of dollars per year."
That's the scoop on workforce management software and why you need it. Now start researching the product to find the one that's best for your needs.
Pam Baker has written for numerous leading publications including, Institutional Investor magazine, CIO.com, NetworkWorld, ComputerWorld, IT World, Linux World, Internet News, E-Commerce Times, LinuxInsider, CIO Today Magazine, NPTech News (nonprofits), MedTech Journal, I Six Sigma magazine, Computer Sweden, the NY Times, and Knight-Ridder/McClatchy newspapers.
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