As technology advances, workforce management software becomes an increasingly more important tool for business processes. Data analytics now play a bigger role in determining future business plans than they have in the past, and web-based software solutions make it easier for businesses of any size to obtain these insights. Software solutions are growing in popularity as an addition to HR departments in various industries — and, not surprisingly, the workforce management software market is expected to see significant growth over the next few years.
With the growing popularity of workforce management solutions, it’s no surprise that the market is growing. However, understanding the growing market is not a simple task. There are multiple factors to consider when assessing this growing market. One of the basic aspects to evaluate is workforce management software itself and what it’s specific features and functionalities are. There are also a number of factors external to software affecting the market, such as the growing number of millennials in the workforce. We’ll discuss all of these considerations in detail to help you understand just what you can expect to see in the future of the WFM software market.
- Workforce management products are a popular tool to help streamline and optimize basic business functions.
- The core functions of workforce management software are assisting with scheduling processes, time and attendance tracking, managing time off requests, task management and collecting data.
- The workforce management software market is predicted to see growth of more than 11% in the next five years as software solutions become more common within businesses worldwide.
- The rise in demand for business analytics and the projected 3% increase in IT spending are major contributing factors to the growing market.
What This Article Covers
- What Is Workforce Management Software?
- Workforce Management Trends
- Workforce Management Software Market
- Factors Affecting the Market
- Considerations for Software Buyers
What Is Workforce Management Software?
Before we discuss the trends affecting the workforce management market, let’s take an in-depth look at what the tool really does.
A good workforce management solution is a bit like having a personal trainer for your business. While you could easily watch an old Tae Bo tape to get ready for swimsuit season, it likely won’t be as effective as having a trainer who knows what fitness plan is best for you. Much like a trainer helps you build a customized fitness plan, workforce management products help guide your unique business plan. Workforce management software will help you to assess your current business position, determine what the best strategy is to maximize your workforce’s efficiency and influence regular goal setting practices.
The ultimate goal of workforce management is to maximize the results of your basic business functions. Workforce management software is able to assist with this by automating a variety of administrative tasks. With the widespread availability of advanced technology, businesses now have a variety of options available when it comes to implementing software solutions to enhance their HR processes. Some managers prefer more specialized products that automate specific tasks, choosing to utilize individual systems for each process. However, as integration and data analytics become more important, many organizations are choosing one system that can assist with a variety of tasks.
This need for multi-purpose solutions is the reason that so many organizations are turning to workforce management software. After looking through all of the software options within the market, many business professionals find that workforce management solutions are able to automate and streamline many of the time-consuming tasks that HR managers would rather not focus on. So, how do HR professionals determine if this solution is the best one for their business?
When determining whether or not to implement workforce management software its important to recognize what your business specific needs are and develop a list of software requirements. If your organization simply requires a bit of assistance with building schedules, then you might not need to look any further than employee scheduling software. However, for many businesses, this is not the case. Many organizations have more complex needs. This is why workforce management products are a popular choice. This is also why the workforce management software market is predicted to see growth — but we’ll discuss those details in depth later on.
What Can Workforce Management Software Do?
The road to the perfect beach body is long and arduous, but it will all be worth it when the time comes to take photos of your beach vacation for Instagram. That’s why selecting the right trainer is important, and selecting the proper workforce management solution is no different. Just like your trainer will have a variety of tools to help you get fit, a workforce management product will have a range of tools that can help your business achieve its full potential.
Workforce management software can assist with a variety of core HR tasks, which can be broken into five core functions. These functions help with some of the most basic HR tasks. While these tasks are essential to business operations, they can easily be forgotten about. Those five core functions are:
- Scheduling: Workforce management software can help by automating the scheduling process as well as by managing employee skills and ensuring compliance with various regulatory standards.
- Data Collection: These systems are able to collect data about your labor processes and generate detailed reports.
- Leave Management: Processing time-off requests is a far more efficient process with a solution that can track and automate approving these types of requests.
- Task Management: This functionality provides insight into your employee skills base as well as detailed information to guide your decision making when it comes to assigning specific tasks.
- Time and Attendance: This capability allows you to track data from other modules and assess it based on organizational policies specific to time and attendance.
While there are five core functions of workforce management, one stands out above the rest: scheduling. The ability to streamline and automate scheduling processes is the most commonly discussed benefit of workforce management software. Unfortunately, unpredictable scheduling is commonplace in many industries — in fact, less than 40% of retail workers report having regular schedules. Implementing a solution that can assist with scheduling will help you to provide more consistency within your scheduling process, which can only help to boost the happiness of your employees.
Workforce Management Trends
A high-quality workforce directly contributes to increased efficiency and productivity. In order to maintain a strong workforce, businesses will need to find new ways to improve their existing practices. As a result, more companies are turning to workforce management software.
However, it is vital to understand the current workforce management trends before making any decisions to change how you use your existing system or implement a new one. So what are the current trends within the realm of workforce management? We asked University of Michigan business professor Dave Ulrich exactly that. According to Ulrich, there are six noteworthy trends that HR managers should pay attention to in 2019:
- Delivering value to those outside the firm as well as those inside. This will require HR managers to assess what value they can deliver to internal parties as well as customers, investors and communities.
- Focusing HR on talent and organization. HR managers should be aware of what skills employees possess, the competency of the workforce as well as the work culture.
- Creating organization capabilities that align with customer and investor desires and bundling HR practices into those capabilities.
- Relying on data analytics to inform organizational decisions.
- Continually investing in learning opportunities.
- Developing skills that allow HR managers to navigate personal skill sets to help them coach leaders.
Workforce Management Software Market
Workforce management solutions are now imperative for businesses of every size, within a multitude of industries. Considering the product’s vital position within business practices, the size of the market itself should come as no surprise. So, what exactly is the current size and condition of the workforce management market?
The most recent estimates value the global workforce management software market at $4.25 billion — and the market is expected to see significant growth in the next five years. The current forecast for the market assesses the expansion of the market during an eight-year period, from 2018 to 2026. The market is predicted to see a compound annual growth rate of 11.4% during the forecast period. Based on these figures, the market will reach $9 billion by the year 2025.
That’s a lot of future growth, but what’s causing it? There are a number of factors that affect the growth of the market. Some of the specific factors contributing to the growing market are as simple as the rise in demand for advanced technology solutions. However, some are more complex, such as the shifting nature of the workforce. Understanding these factors will help to provide insight into the changes happening within the market and will also help you determine which factors may affect your future business goals.
Factors Affecting the Market
There are a variety of factors that will contribute to the predicted growth of the market. Many of these factors are a result of an ever-changing workplace and possess a direct relationship with workforce management solutions. The different features that vendors offer, the increasing need for data analytics and various workforce management trends will all affect the growth of the market.
The Internet of Things
One factor which will contribute to the growth of the market is the internet of things (IoT). The IoT refers to the internet connectivity of a variety of computing devices. Put simply, IoT refers to devices that are able to talk to each other through the internet. For example, if your smartphone can connect to your home security and allow you to monitor what’s happening while you’re away on vacation, then your phone is actively demonstrating the capabilities of IoT technology.
Perhaps the biggest benefit of this connectivity is the data analytics it provides. This benefit, among others, is a major contributor to the rise in demand for workforce management software and other IoT connected products. In fact, according to Statista, there will be more than 75 billion IoT connected devices by 2025. The benefits of the advanced analytics supplied by the IoT provides businesses with a competitive edge. So is it any surprise that so many businesses are following this trend and implementing new ways of connecting their devices?
The IoT boosts efficiency within businesses by delivering in-depth data analytics. However, this is not the only benefit of the IoT that is driving growth in the workforce management market. Some of the other benefits include:
- Providing a clear picture of when, where and how employees work. The connection between devices is especially beneficial to organizations that operate out of a variety of locations. This capability will provide you with detailed analytics to give you insights into how different people use various spaces for work.
- Empowering employees. Workforce management solutions provide employees with access to a variety of features, such as their job information and time-off requests. The interconnectivity provided by the IoT allows employees to access these useful features from various devices, which helps boost employee satisfaction and makes it easier for your organization to retain great employees.
- Measuring productivity within the workplace. The IoT provides a wealth of data on your business operations, which makes it easier for you to optimize your workplace practices.
We also spoke to JD Conway, Head of Talent Acquisition at BambooHR, for his thoughts on the market. “In the near future, I see features that take away from the transactional aspects of HR or TA functions. Not only that, but those that add greater value to those functions. There are more and more sourcing software tools that are coming into the market daily. Each has its own niche. The ones that will succeed are those that can consolidate features and functionality into one umbrella.”
The expansion of the market brings with it the addition of new features. As vendors add new features to their products, the market will become increasingly more competitive. Some of these features may be able to assist with more than just the basic workforce management functions, making those solutions a more attractive addition to any HR department.
“I’d also say that more and more executives are seeing the value of retaining and attracting great employees,” said Conway. “They are paying more attention to the needs of HR professionals as a result. New tools that will solve particular problems that manpower alone can’t solve will be the winners. These kinds of tools will also free up HR leadership’s time to develop new programs instead of only keeping track of the transactional.”
Another trend that’s affecting the workforce management software market is a trend that affects all software markets. The rise in demand for insights provided by data analytics is leading many businesses to implement solutions that can automatically track and analyze data — and workforce management is no exception.
Platforms that utilize AI can help automate a variety of tasks as well as track and analyze relevant data. This capability is beneficial to businesses of every size as it helps boost efficiency and productivity.
“Most of the work is focused today on efficiency and innovation,” said Ulrich. “More work could be done on information sharing and connection building. I believe that the connection, or experience, dimension of technology and digital will likely have the greatest impact on employee wellbeing and organization results.”
According to Gartner, global IT spending will see an increase of more than 3% in the next year. This includes spending on things such as IT services, communication services and various IT devices. However, the most notable increase in spending over the next year will be seen in enterprise software. According to Gartner, spending on enterprise software will total $466 billion by 2020.
This spending increase is largely the result of the rising popularity of cloud-based solutions, which allows devices to connect through the internet of things. This shift towards cloud-based software affects all markets, not just the workforce management market. The convenience of cloud-based solutions benefits many businesses that use HR software, and as such, causes users to adopt new products with integrative solutions.
More millennials and members of Gen Z are entering the workforce and at the same time, plenty of baby boomers are choosing to postpone retirement. In fact, there are now four distinct generations present within the workforce, according to Pew Research. This makes the current workforce more than 60% more diverse than it was in 1994.
A diverse workforce offers many benefits. The diversity among individual team members will result in different perspectives that will be able to approach and solve problems in new and innovative ways. Diversity can also increase productivity and boost your company’s reputation.
However, with more diversity and inclusivity in the workplace, there are new challenges that HR managers will need to resolve. This will include recognizing the variances in what employees want and reconciling them with what your business can offer. As the workplace becomes more diverse, these needs and desires will also become increasingly more varied.
As a result of the rise of increasingly more diverse needs from employees, HR managers are turning to software solutions that can help them deliver strategic solutions that benefit both the business and the employees. Workforce management solutions are a popular choice because they allow HR managers to address the many different facets of employee’s day-to-day work conveniently in one platform. For example, workforce management software can assist with matching employees with the job that is the best fit for them. Properly assigning employees to the right job will ensure that you are using the diverse skills of your workforce to their fullest potential.
Considerations for Software Buyers
Clearly, there is a lot of movement within the workforce management software market. With so many factors influencing the growth of the market, it’s likely that buyers will be presented with a variety of workforce management solutions to choose from. Many vendors may decide to add on new features to keep up with the rise in demand for more advanced solutions. It will be very important for those looking to implement a new workforce management product to be aware of what their specific business needs are. This will require buyers to develop a list of requirements to help guide their search.
With new tools being introduced into the market almost daily, it will be more challenging than ever for prospective buyers to select software for their business. Buyers will need to be aware of which features will add the most value to their company. While there will be solutions that are attractive, it will be important for buyers to ensure that the product they choose to implement is more than just a pretty package. It will be important to make sure that the solution actually works to accomplish what it is being implemented to do. The best solutions will ultimately add greater value to basic HR and talent acquisition functions.
“There are so many tools on the market,” said Conway. “HR professionals will need to find out which tools measure impact long-term. As they’re building out programs and strategies for the next one, two, three years, they’ll need to choose software that will have an effect on those long-term strategies. They’ll want to check scalability, growth, engagement and how they will measure the impact of the tools on those spaces.”
The Wrap Up
Workforce management software provides businesses plenty of benefits, so it’s no surprise that so many HR managers are looking to software solutions to optimize their business functions. With so many factors affecting the overall growth of the market, it will be important to thoroughly research all of the software options available to determine which product is the best fit for your business. Fortunately, there are plenty of vendors offering innovative solutions, making it easy to find a product that fits your needs.
What factors do you think will have the largest impact on the workforce management software market in the next five years? Let us know in the comments!
Contributing Thought Leaders
Dave Ulrich is the Rensis Likert Professor of Business at the Ross School, University of Michigan and a partner at the RBL Group, a consulting firm focused on helping organizations and leaders deliver value. He has published over 200 articles and book chapters and over 30 books. He edited Human Resource Management 1990-1999, served on editorial board of 4 Journals, on the Board of Directors for Herman Miller (16 years) and Board of Trustees at Southern Virginia University, has spoken to large audiences in 90 countries; performed workshops for over half of the Fortune 200; coached successful business leaders, and is a Fellow in the National Academy of Human Resources. He is known for continually learning, turning complex ideas into simple solutions, and creating real value to those he works within three fields.
JD Conway is the Head of Talent Acquisition at BambooHR. JD has over a decade of experience in talent acquisition acting as both a third-party recruiter for boutique technical recruiting firms and as an in-house technical recruiter. His work includes managing talent acquisition teams in high-growth SaaS companies and servicing Fortune 500 clients for the world’s largest recruiting corporation. From organizational health and development to recruitment marketing and employer branding, JD has used his expertise to change the very way companies structure and view the functions of talent acquisition. JD believes in empowering executives and HR leaders to focus on the human nature of human capital and in teaching through experience how a people-first approach can dramatically impact their bottom line.