A Go-To Guide for All Workforce Management Issues

Written by HR professionals, this guide answers crucial questions with which enterprises large and small struggle in the day-to-day business. From setting up shift trading rules to calculating the turnover rate to curbing absenteeism, the guide covers key workforce management topics and provides actionable steps to efficiently overcome obstacles and secure long-term success of your HCM strategy.

What You’ll Learn

Each chapter will cover a key aspect of successful workforce management and provide actionable steps on how to introduce these processes in your company.

01 Choosing the Best Workforce Management Software Solution for Your Organization

We’ll begin the journey by learning about the selection process for workforce management software solution for your company. We will discuss the specifics of SMBs and enterprises, look into the key aspects of mobile workforce management, questions for the vendor, and calculating software ROI to ensure you choose the best WFM software for your budget and unique business requirements.

What is Workforce Management?

Workforce management is an integrated set of processes used to optimize the productivity of an hourly or shift-based workforce. These processes include:

Workforce management solutions address challenges relating to forecasting labor requirements and creating and managing daily staff schedules. When expertly used, workforce management solutions provide managers with the tools to improve labor planning, increase employee efficiency, lower operational costs, and provide better customer service.

Another important term to understand is how human capital management (HCM) differs from workforce management. HCM is applied to hourly and salaried employees alike and it involves personnel administration, payroll, benefits administration, recruiting, onboarding, training, and performance management.

To make their workforce management processes more efficient, forward-thinking managers are turning to workforce management software solutions. These solutions typically have scheduling, time clock, and leave-request functions. More sophisticated solutions also include messaging, staffing forecasting, training, and reporting capabilities.

What should you be looking for in a workforce management solution? The answer depends on the size of your company and the industry in which it operates. During your search, your objective should be to assess the features of your software options based on your organization’s specific needs.

What Size is Your Organization?

Small Business

If you run a small business, you should be looking for a small business employee management system. You want a solution that will allow you to focus on growing the business while enabling you to easily manage the workforce.

For example, if you have one retail location, a key feature is having a cloud-based system with a simple scheduling tool that allows you to set shifts several months in advance. The system should also have a mobile app capable of issuing email, text message, or push notifications to the staff so that they are always up to date with the latest schedules.

Another useful feature is a mechanism for allowing staff to easily trade shifts with minimal input from management. This saves the time managers usually waste calling around to make sure shifts are covered.

Also, if you are using small business accounting software to handle finances, one of the criteria is whether the WFM system of choice integrates with that software.

Medium-Sized Business

If your business is medium-sized, you can opt for a software solution that is similar to the SMB employee management system but with greater functionality.

Perhaps you manage retail locations spread across a wide geographic area. To manage staff effectively, you need a system that allows you to schedule shifts for multiple locations. And, since you’re using more sophisticated financial software, you want to make sure that you can export payroll information for use with your payroll provider.


If you are part of a large enterprise, you should be looking for an enterprise workforce management solution. The solution must be capable of optimizing and automating the most complex and demanding staff scheduling and workforce management needs for an unlimited number of locations and departments.

The solution needs to contain a powerful time-clock feature for tracking attendance. It should include a notification system for managers in case employees arrive late or leave early, and also help eliminate buddy punching by capturing the image of the person clocking in or out. It could even use geo-fencing and GPS through a mobile app to ensure that the right people are clocking in at the correct locations. This will be discussed in more detail later in this guide.

Demand-based scheduling is another key feature to look for. Based on key performance indicators (KPIs) important to the enterprise, the scheduling administrators can build accurate schedules ensuring that the business is never under- or overstaffed.

Additionally, rule-based scheduling helps guarantee compliance with labor regulations and thus minimize costs and prevent penalty fines.

Customized reports are another must-have for large organizations and companies. These reports should be dynamic, allowing you to analyze up-to-the-minute shift details, time and attendance, budgeting, and payroll data.

Given that enterprises often rely on robust third-party HCM and payroll systems, the chosen workforce management should be offering full integration, to avoid double data entry.

Managing a Mobile Workforce

The choice of a workforce management software solution will also be dictated by the type of workforce in the organization. Many software platforms are great for companies with employees that work at specific locations; however, the same platforms can fall short when the workforce is mobile.

Managing a mobile workforce primarily requires communication. The WFM solution needs to allow contacting each staff member to keep them informed of their schedule and any changes that might take place. The solution should also have GPS capabilities so that supervisors can monitor the location of the employees throughout the day.

Important Questions to Ask a Vendor

Is it a cloud-based solution?

When the system is cloud-based, managers and staff can access the system’s features from anywhere at any time. This gives everyone maximum flexibility regarding how they interact with their schedule.

Does the solution have a mobile app?

With mobile apps, the staff’s schedule is always at their fingertips. Not only can they easily check their schedule, but the app can also notify them when the new schedule has been published and when changes have been made. This reduces the chances of accidental tardiness or absences.

Is it easy to use?

No matter how great the system is on paper, if it is difficult to use, it will be hard to engage employees. The lack of buy-in can doom your move toward a new system, even if it is better than the one you are currently using. Take advantage of the limited trial or participate in a demo to get a sense of the user interface.

Does the solution integrate with other software platforms?

To create a seamless experience for your managers and staff, be sure that the solution integrates with the payroll and HCM applications you are currently using.

What reporting features does the solution have?

You want to have access to a library of standard reports, as well as the ability to create customized reports. These reports give you the ability to instantly correlate and analyze your most vital staff management data. You’ll always have insight into employee hours and labor costs.

What’s on the product roadmap?

Don’t hesitate to discuss the plans for the future development of the product. Based on your industry and business needs, check if the platform will address coming trends like automated scheduling, machine learning, and artificial intelligence, among others.

What level of security does the solution offer?

Security of your employee’s personal data is paramount. At a minimum, the system should offer 256-bit encryption between your computers and the vendor's servers.

What level of support does the vendor provide?

Your managers and employees are going to need time to get used to the new platform, and they might have questions or run into issues. You should accept nothing less than 24/7/365 support provided by a live representative.

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Workforce Management Software ROI

Your organization might be hesitant to implement a workforce management platform because it may be a big investment. Certainly, it is an expense, and HR isn’t a revenue-generating department. However, workforce management platforms can support the bottom line by controlling costs related to labor.

On average, unexpected workplace absenteeism by hourly employees costs a business about $2,660 a year per employee.

Also, businesses with dissatisfied staff experience higher turnover rates. The price of high turnover is high—it costs an average of $3,079 to replace an entry-level hourly employee.

The ability to streamline workflows that result in accurate shift schedules, accurate paychecks and smooth communication increases employee satisfaction. For hourly employees, predictable and stable shift schedules are one of the key criteria when evaluating job satisfaction. Researchers report that employees prioritize the effectiveness of their supervisor most, followed by schedule satisfaction and scheduling flexibility when assessing their overall job quality.

So, if you are in the position of needing to justify the expense related to implementing a workforce management platform, share these ROI facts with the decision makers.

Humanity is an acclaimed, cloud-based employee scheduling software. Discover why 7,000+ businesses in 175,000 business locations are relying on Humanity to streamline the shift scheduling process.

02 Setting Up a Workforce Management System

Even the most powerful software solution is quickly abandoned if the users feel their specific needs are not being met. In Chapter 2, we’ll look into how to optimize your WFM software of choice to give the entire team palpable benefits right away. You will learn how to tailor the software capabilities for maximum software utilization, set up remote locations, customize employee profiles, choose key aspects to manage through the system, and prepare for future scalability.

Once you have decided upon the workforce management system that best suits your needs, it’s time to set it up according to your workforce plan.

So, what is workforce planning? Workforce planning is a systematic process for identifying and addressing the gaps between the workforce of today and the human capital needs of tomorrow. An effective workforce planning process enables the organization to align daily workforce requirements directly to the organization’s strategic and annual business plans.

It’s this plan that serves as the rationale behind how the employee management system is set up and the schedule that is ultimately created.

Setting Up an Employee Management System

Depending on the employee management platform you choose, setting up your system should be straightforward. It may require a significant investment of time, but the time spent will be worth it. In the end, you will have a system that is ready for you to create work schedules and that is scalable to fit your growing needs.

1. First things first: Import your staff

Most employee management systems will first require that you import or add your staff. Go to the staff section of the system and add employees either one by one or by importing a .csv or .xlsx file.

2. Set up locations and positions

The next step is assigning employees to locations and positions at those locations. At the staff section of your system you will usually have to set a primary location, but you can also add additional locations if necessary.

After you have set up your locations, you can add positions to those locations. Depending on the nature of your business, positions may be:

Now, the manager can divide staff into multiple locations based on assigned positions by the manager.

3. Set up remote sites

Remote sites are locations for shifts and events outside of your primary work locations and are assigned directly to shifts. These sites may be client locations or contract locations. You can set up a remote site in the staff section of your system because remote sites are assigned directly to individual shifts.

4. Customize employee profiles

Your employee management system allows you to personalize employee profiles. Not only can you add a photo of the employee, but you can also create custom fields. An example of a helpful custom field is “shirt size.” With that information in place, you can easily supply the staff with the adequate shirts, as a part of a uniform, for instance, without having to additionally reach out to them to get the information.

5. Choose what to manage through the system

1. Schedule management. Your system may allow you to simply “drag” a staff member onto a shift schedule and move the employees around on the schedule until you’ve got the schedule just right. Some systems enable managers to automatically generate conflict-free schedules, copy shifts, and import schedules.

2. Time and attendance management. When the system is in the cloud and can be accessed from mobile devices, the need for additional time-clock stations is eliminated. Also, by using this feature, you can easily export perfect timesheets ready for payroll.

3. Vacation and leave time management. This empowers staff to request time off through the system, giving them greater autonomy while providing you with clear, reliable staff availability insights. Using a powerful system also makes it easy for employees to always have an accurate overview of how much time off they have left in order to avoid miscommunication and frustration in the scheduling process.

4. Staff onboarding and training. You can create onboarding programs to help integrate new staff into your organization effectively and smoothly. You can also create and upload custom training courses and tests to expand and confirm employee skills and knowledge.

What you choose to manage may be dictated by which human resource management system (HRIS) you use. For instance, if you use Workday, BambooHR, or Dayforce, check to see if your employee management system integrates with those solutions. Syncing all of your employee details from your employee management system with an HRIS makes it easier and faster to create and distribute accurate work schedules to your entire staff and also manage and compile employee time and attendance data.

6. Plan for future scalability

As your organization brings on new staff or expands into new territories, you want to be able to accommodate that growth without having to switch to a different system. This is why it is so important to ask questions about scalability during your platform selection process. If it appears that the system you are considering is not easily scalable, it is recommended to look for an alternative.

Now that you have your system set up, it’s time to create a work schedule.

The Humanity team places a strong value on the client onboarding process to ensure the app is set up and customized to address their needs.

03 How to Create a Work Schedule

Smart scheduling can preempt many workforce management issues, including absenteeism, low retention, high turnover, and low productivity. Chapter 3 is a thorough exploration of scheduling which is the key aspect of any WFM strategy. Exploring various types of work schedules in-depth, Chapter 3 is the single most comprehensive take on shift trading, forecast scheduling, schedule optimization, demand-based scheduling, and automated scheduling, while providing guidance to assess your teams’ needs.

When done well, a shift-based work schedule can be a strategic asset, improving employee satisfaction and reducing absenteeism. When done poorly, schedule management can increase labor costs with overtime, promote tardiness and absenteeism, contribute to turnover, reduce productivity, and raise legal compliance issues.

In the following text, we dive deeper into how to effectively schedule employees.

To create an effective schedule, you need to:

How to Schedule Employees

The creation of your employee schedule is a critical task because it is a prerequisite for ensuring that the right employees are scheduled to work at the right time. This helps you deliver the best possible service to your customers. Here are the best practices when it comes to creating a schedule that meets the needs of the organization and the employees.

Understand Business Demands

Scheduling employees is all about matching human resources to demand. So, it’s essential that you begin the process with a clear understanding of what are the needs of your organization. You’ll need to examine the needs for each role, at each location, and for each shift duration.

For example, a restaurant might need three cooks and two dishwashers in the kitchen from 11 AM to 2 PM. Moreover, this need might represent a trend for the lunch rush hour. Being aware of this tendency makes it easier to create a schedule for each following week.

It’s also important to determine the job qualifications needed for each shift. For instance, a restaurant may have just installed new software at the hostess’ station, but only one person has been trained on the software. Clearly, only that person can work shifts at the hostess station until another employee is properly trained.

Know Your Team

Over time, you will be able to predict customer demand. What may fluctuate more frequently is the availability of human resources. Holidays, vacations, and sick leave all factor into the equation of whether you will have the staff you need for the shifts you need to schedule.

Turnover is another factor. If your organization is experiencing turnover, or you are aware of a trend—perhaps you lose two employees each month—you need to avoid a labor shortage by maintaining a regular hiring and onboarding process.

Additionally, you need to know the skills and qualifications of your team. That’s because you need to build out shifts that have the right resources in place. It doesn’t help to have a new employee working a shift that requires the knowledge and skills of a well-seasoned employee.

Assign Shifts

Once you know what your human resources needs are and what shifts are necessary, you can begin assigning shifts to employees. Your goal is to put the right people in the right time and location slots.

There are two ways to do this: from the top down or the bottom up.

Regardless of the approach you take, you must set and follow scheduling rules. These rules may relate to seniority, overtime, or employee qualifications. Following rules ensures that the schedule has been fairly created and cuts down on schedule-related complaints. Also, following rules helps control cost. If you have a rule that governs the amount of overtime allowed for a pay period, following that rule will keep you on budget.

It’s also recommended to take into consideration the preferences of your employees. For instance, if you know that a particular person prefers to work evening shifts, do your best to accommodate them. The employee will feel appreciated and the number of schedule change requests may be reduced.

Establish a Seamless Shift Trading Process

You may have built the perfect schedule from your perspective. However, one or more of your employees may prefer to work different shifts or they may not be available for some of the hours you have scheduled for them. This is why it is a good idea to make shift trading easy.

Your employees should be able to quickly find a replacement and make a shift trade without management getting involved. Even if management involvement is necessary, the process should be efficient.

Assess and Compensate

After each scheduling period is completed, it’s advised to go back and evaluate the scheduling process.


Because scheduling isn’t as simple as setting the same shifts over and over again. Needs change, employee availability changes, and even the rules may change.

Start by determining whether you accurately predicted business needs and assigned the right number of employees to meet the demand in the scheduling period. This is a particularly important question to ask during holidays or times when demand commonly peaks or drops. Assessing your accuracy will help you get closer to the optimal schedule next time.

Also, keep an eye on your resource pool. Have you lost any employees? Has anyone put in their 2-weeks notice? Who’s going on vacation or maternity leave? Answers to these questions help you plan hiring and training new staff members to keep up with demand.

Finally, ask yourself how the scheduling process went. Was it smooth or was it difficult? If it was difficult, identifying specific problems will help you avoid them during the next scheduling period.

Rotating Shift Schedule and How to Set It

“Rotating shift” is a term that covers a wide variety of work schedules. It’s characterized by shifts that rotate or change according to a set shift schedule or shift pattern. Employees take turns working on all shifts that are a part of the pattern.

There is a wide range of shift patterns that managers can use to schedule rotating shifts, such as DuPont, Panama, Pitman, or Continental. Let’s have a look at each one of them.

Dupont Shift Schedule

This scheduling pattern is a 12-hour shift schedule that uses four teams and two 12-hour shifts to provide 24/7 coverage. The DuPont shift schedule consists of a 4-week cycle where each team works in the following pattern:

By following this pattern, employees work an average of 42 hours per week.

Panama Shift Schedule

Similar to the DuPont pattern, this rotating 12-hour shift schedule pattern uses four teams and two 12-hour shifts to provide 24/7 coverage. Each team works in the following pattern:

Each team works the same shift (day or night) for 28 days, then switches over to the other shift for the next 28 days. After 56 days, the same sequence starts over.

Pitman Shift Schedule

The Pitman shift schedule also uses four teams and two 12-hour shifts to provide 24/7 coverage. It consists of a 2-week cycle with day shifts assigned to two teams and night shifts assigned to the remaining two. On any given day, one team covers the day shift, one team is on the night shift, and two teams are off duty. The pattern is as follows:

With this system, employees work an average of 42 hours per week.

Continental Rotating Shift Schedule

This pattern, also known as 2-2-3 rota, uses four teams and three 8-hour shifts to provide 24/7 coverage. On a weekly basis, each team rotates through a sequence of 2, 2, and 3 consecutive day shifts, swing shifts, night shifts, or days off.

The 8-Hour Shift Schedule

This pattern uses four teams and three 8-hour shifts to provide 24/7 coverage, but it can also be used for setting 8-hour shift schedules for five or seven days a week or 8-hour shift schedules with every other weekend off. Each team rotates through the following sequence every 28 days:

The 4-3 10-Hour Shift Schedule

This pattern uses six teams (with a minimum of six employees) with three teams on duty and three teams off duty at any given day, to provide 24/7 coverage. Once a week, employees in all six teams are scheduled to work on the same day, which can be convenient to cover high activity or in-service training.

The pattern is based on a 3-week cycle (21 days) with each team working in the following pattern:

The 6-4 6-4 6-4 Ten Hour Rotating Shift

The pattern uses five teams and three overlapping 10-hour shifts to provide 24/7 coverage. It consists of a 30-day cycle with each team following the pattern below:

The overlapping shifts provide extra manpower during high activity periods. This plan requires five teams (with a minimum of five employees), with three teams on duty and two teams off duty at any given day.

The 5-3 5-4 5-3 Ten Hour Rotating Shift

This pattern uses five teams and three overlapping 10-hour shifts to provide 24/7 coverage. It consists of a 25-day cycle where each team follows the pattern below:

The overlapping shifts provide extra manpower during high activity periods. This plan requires five teams (with a minimum of five employees) with three teams on duty and two teams off duty at any given day.

The 4-2 4-3 4-3 Ten Hour Rotating Shift

This pattern uses five teams and three overlapping ten-hour shifts to provide 24/7 coverage. It consists of a 20-day cycle where each team works in the following pattern:

The overlapping shifts provide extra manpower during high activity periods. This plan requires five teams (with a minimum of five employees) with three teams on duty and two teams off duty at any given day.

How to Set Up Open Shifts

Open shifts are work shifts that have not been filled or assigned to an employee. Since they are “up for grabs,” they are an excellent way to engage your workforce and give them flexibility based on their schedule availability.

Open shifts allow you to set the number of employees needed to work during a particular shift. Once an open shift is created, your workforce management software will send a notification to all employees that the open shift is available. Your employees can then view the open shift and offer to work that shift. Once you approve, the shift is officially scheduled and your employee has a work schedule that is better aligned with their personal schedule.

Shift Trading or Shift Swap

Most scheduling managers spend too much time juggling employee shift changes. They’ll set a schedule only to find out that one or more employees can’t work during one or more assigned shifts. This can be a headache for schedulers who rely on old-fashioned methods of scheduling because they have to reach out and contact other employees to find a replacement.

What you need is a trade management feature built into your workforce management software. This will pass the responsibility for shift trading to the employee. When they realize they can’t work an assigned shift, it’s up to them to find a replacement and arrange the shift trade electronically. They can simply provide a request and reasoning for the shift trade and indicate which of their coworkers may be able to cover the shift. A notification is sent to the employee selected to potentially cover the shift, allowing that employee to either accept or reject the request—all without manager involvement.

Work Schedule Optimization

Work schedule optimization is the process of ensuring that the number of employees assigned to a shift syncs with the business demand.

For example, if experience shows that there is a significant lunch and dinner rush, optimizing the daily shift schedule simply means assigning enough employees to work during the rush hours, with fewer employees working the non-rush hours. Here is where some powerful workforce management platforms shine. They can take your forecast and automatically build out an optimized work schedule.

Forecast Schedule with Demand-Based Scheduling

Demand-based scheduling combines the power of big data with modern employee scheduling solutions to offer enterprises with complex staffing needs the ability to reference other important business metrics and KPIs that can help them make the right decisions when creating their staff schedules.

Instead of making educated guesses based solely on your knowledge and experience, the software introduces sophisticated data analytics to the scheduling process, making it easier to make informed, data-driven staffing decisions.

The data the software relies upon include customer behavior such as foot traffic and sales, staff availability, staff characteristics—such as which employees have certain skills or experience— seasonal and historical trends, as well as rules such as those that spot conflicts or limit overtime. If you take full advantage of the sophisticated employee scheduling algorithms, demand-based scheduling can have a huge impact on your business, with a substantial return on investment.

Automate Employee Scheduling

Writing out a schedule each week is ordinarily a tedious and time-consuming chore. Even if you are using a scheduling software, you might be tempted to assign shifts from scratch for each payroll cycle. This isn’t necessary if your software can automate employee scheduling.

Automating employee scheduling saves time, especially with more complex shift schedules. This feature automatically detects empty shifts and prompts you for action, giving you the option to fill the shifts with the auto-scheduler. Once you make a decision, the software takes you to the next empty shift until all shifts have been filled. Alternatively, you can direct the software to fill all open shifts automatically.

Humanity makes building daily and weekly schedules easy. With schedule templates, clear view of employee availability and skills, and powerful automation, managers can create and distribute schedules in a few clicks.

04 Efficiently Tracking Employee Time and Attendance

In Chapter 4, we will discuss how to choose a time clock software that helps monitor your talent across locations and departments. You will learn how to stay payroll compliant, while navigating through various aspects of payroll, including health care, taxes, and employee classification. Examining the costs of buddy punching, you will learn effective strategies to eliminate it from your organization, as well as the benefits of GPS tracking, geofencing, and biometrics time and attendance.

This resource will focus on:

Time and attendance is a phrase used to describe the process of tracking hours worked. Employers track time and attendance so that they have accurate records to support the correct payment of wages and salaries, as well as the calculation of benefits such as paid time off (PTO).

How to Choose Employee Time Clock Software

To accurately and efficiently track employee time and attendance, organizations require a time and attendance software that fit their unique needs and policies.

It can be difficult to determine which of the many time clock solutions available on the market is right for your organization. When considering different time clock tools, here is what to look for:

Flexible time tracking options

The best solution will allow employees to record their hours through a time clock, a computer, or an app on a smartphone or tablet.

Tracks all applicable time

Choose a solution that takes care of all your time-tracking needs. This typically goes beyond clocking in and out, and also includes keeping track of PTO.

Ease of use

You want your team to get used to the chosen solution as quickly as possible. It should have a clean user interface and allow for employee self-service.

Integration options

Choosing a solution that seamlessly integrates with HR and payroll software that your organization already uses will save you a lot of time in the long run, especially with data import.

Communication features

It’s helpful to have a solution that sends out notifications when employees forget to clock in or out, or are nearing overtime. These proactive notifications help you monitor expenses.

Audit trail features

The ability to view original timesheet data along with any changes made by a manager or supervisor can be important in case of an audit.

Payroll Compliance Checklist

Regardless of how you choose to keep track of time and attendance, it’s important to get the payroll process right. This goes beyond accurately paying employees for the time they’ve worked. It cannot be emphasized enough how critical it is for HR professionals to stay abreast of federal, state, and local laws and regulations. Failing to follow a law, missing a deadline, or other misconduct can have severe administrative and financial consequences.

Proper Classification of Workers

It’s important that each worker is properly classified as an employee or as a contractor. If a worker is an employee, your organization is responsible for paying their payroll taxes and benefits. If the worker is a contractor, the organization pays them the amount due for their work and they are responsible for their own taxes.

Broadly speaking, if the worker is using your tools, your systems, and following your rules, then they are an employee. If the worker is bringing a specialized skill set, using their own tools, and setting their own work rules, they are a contractor. Getting the classification wrong can result in penalties and fines.

Minimum Wage and Overtime Management

The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 and overtime at time-and-a-half after 40 hours in a work week. Many US states and cities have set a higher minimum wage.

In states and cities that have set their own minimum wage, the wage to be paid is whichever wage is the highest. It is the employer’s responsibility to be aware of and comply with these standards.

Correct Categorization of Payroll Items

For the payroll to be accurate and compliant, employers must correctly categorize payroll items as additions or deductions.

Additions are amounts earned beyond regular wages such as overtime, bonuses, expense reimbursements, commissions, and PTO. Deductions are expenses such as income taxes, garnishments, insurance premiums, and savings plans.

Once properly categorized, employers must identify which additions or deductions are taxable or exempt from tax.

Accurate Calculation of Income Tax and Withholding Tax

Income tax is withheld by the employer during every pay cycle. Employers are then responsible for submitting federal, state, and local income tax on a timely basis.

Proper Administration of Payroll Taxes

Employers must properly administer payroll taxes by using the correct rates and reporting employee and employer contributions to federal, state, and local agencies. Federal payroll taxes include Federal Insurance Contribution Act (FICA) taxes which are Social Security, Medicare, and Federal Unemployment Tax (FUTA). States also require unemployment tax (SUTA).

Correct Handle of Health Care

Every employer must be aware of their responsibilities under the Affordable Care Act (ACA). Under the ACA, employers with an average of 50 or more full-time employees must provide minimum essential coverage or make an employer shared responsibility payment to the IRS. Employers with fewer than 50 employees can participate in the Small Business Health Options Program (SHOP).

Employers with less than 25 full-time employees with wages under $50,000 may qualify for a health care tax credit if they cover at least half of their employees’ health insurance premiums.

All employers must keep accurate records of the number of employees and rates of pay in order to determine which portions of the ACA applies to them.

Providing Timely Year-End Documentation

Each year, organizations must place W-2s for employees and 1099s for contractors in the mail by January 31. Missing this deadline will upset employees who are waiting on that form to file their taxes. You will also be subject to IRS fines.

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What is Buddy Punching and How to Prevent It

Buddy punching is when one employee clocks in for another employee. For instance, employee #1 is running late for his shift and sends a text to employee #2 to clock in for him. Being “buddies,” employee #2 clocks in for employee #1.

In a survey of 1,000 employees, 16% admitted to clocking in for a coworker.

This translates into buddy punching costing U.S. employers more than $373 million each year in time theft.

If an organization is using an old-school punch time card, buddy punching is easy. Even with certain technology and time clock procedures in place, buddy punching can be accomplished by sharing usernames and passwords.

Any employer concerned about buddy punching should consider GPS tracking, geofencing, and biometrics. These features ensure that the person clocking in is who they say they are and that they are where they are supposed to be.

GPS Tracking

There are many modern time and attendance software options that feature a GPS time clock. In this case, the employee has an app on their phone which is capable of tracking the location of the employee through the GPS technology built into the phone. When the employee clocks in, the software stamps the employee’s location on their timesheet. Time clock apps with GPS eliminate the need to install a time clock machine on your premises.


Geofencing relies on GPS, WiFi, and cellular data to create a “geofence” around your facility. You decide how close the employee has to be to clock in. It may be the parking lot, or it may be the front door. Once you have defined the boundaries of the geofencing time clock, an employee can only clock in after their phone recognizes that it is inside the perimeter. As with GPS tracking, geofencing eliminates the need for installing a clock-in machine on the premises.

Biometrics Time and Attendance

Practically speaking, GPS tracking and geofencing can be overridden if the employee clocking in physically has the phone of the employee for whom they are buddy punching. To eliminate virtually all avenues for this malpractice, you can deploy a biometrics system. Biometric time keeping ends buddy punching by using the employee’s unique fingerprint, handprint, or retina scan to identify them when they clock in and out.

Humanity enables accurate monitoring of employee attendance, even for mobile and remote teams. Moreover, managers can easily export timesheets for administrative purposes. See how it works.

05 How To Track Employee Vacation Time

Paid time off (PTO) can be a great morale booster and a way to show your employees that you appreciate them. In Chapter 5, we will discuss various PTO types, methods of tracking and compensating PTO, requirements to consider when choosing a PTO tracking software, as well as creating a sustainable employee vacation policy.

Paid time off (PTO) is an excellent way to show your team that you appreciate their efforts and hard work. It can be a great morale booster and make your organization an attractive employer. However, if your organization offers PTO, it’s important to have a clear vacation policy in place.

While there is no requirement to offer PTO for vacations and similar requests, it’s important to note that if the organization has more than 50 full-time employees, it is subject to federal and state regulations around unpaid time off for medical purposes. The company must then follow the guidelines of the Family Medical Leave Act (FMLA) at the federal level and appropriate state laws at the state level.

What PTO Types Exist

There are at least six types of PTO that companies offer:

Methods of Tracking Employee PTO

There are two ways of earning employee PTO: accrual and flat rate.

Under the accrual method, the amount of PTO employees have increases the more hours worked. For example, the rate may be 8-12 hours of PTO earned for every 120 hours worked. Under the flat rate method, employees are given a set amount of PTO per year. For example, the PTO offered might be a flat 10 days. If someone starts mid-year, the amount of PTO is prorated accordingly.

Once you’ve decided on the PTO earning method, you must decide on how to calculate vacation pay. Your choices include a spreadsheet, your payroll and employee management system, or standalone time-off tracking software.

Vacation tracking in Excel or similar spreadsheet software is very common. Unfortunately, it can be time-consuming and prone to errors because it relies on manual data entry. However, if the number of employees is low, a spreadsheet could be a reliable tracking method. The spreadsheet is made simple with just four columns: Employee, Starting Balance, Used, and Ending Balance.

The difficult part of tracking PTO is entering the appropriate formula into the spreadsheet to keep track of the changing balances. This works great for tracking flat-rate PTO. It’s quite a bit more complex to keep track of PTO under the accrual method.

Most employee management systems have PTO tracking capabilities. Be sure to select one that has time and attendance along with a payroll function. After processing payroll for each pay period, the software will update each employee’s PTO running balance.

You can also choose to use PTO-tracking software or a vacation tracking app. This standalone software allows you to monitor PTO and generate custom reports. Once you’ve set up the way the system will be tracking PTO, accrual or flat rate, it will handle the complex calculations for you.

Tracking PTO improperly can lead to employees incurring negative balances and being paid for time off that they do not actually have. Improper tracking can also cause managers to improperly schedule time off, which can disrupt operations in their department. Additionally, depending on state law or company policy, you might need to pay out unused vacation time when an employee terminates. To ensure a correct payout, you need a reliable tracking system.

How to Choose Vacation Tracking Software

The primary thing to consider during your selection process is whether the vacation tracking software is customizable to your organization’s PTO policy. This is true whether you are using a large employee management platform or a standalone vacation tracking software.

There are plenty of employee management platforms and standalone vacation tracking software options. Take your time to explore customer reviews on trustworthy platforms and take advantage of trial period if they are offered. If you participate in a trial, run some mock employees through the system to make sure the system fits your policy and that it is calculating PTO as you expected.

How to Create an Employee Vacation Policy

Once you’ve decided to offer vacation to your staff, you have to draft a policy. You can start by deciding how many days of paid sick leave and paid vacation leave you will offer. Also, determine national holidays for which you will provide PTO. If you will be providing personal holidays, decide how many. Lastly, make a decision whether you will be providing PTO for bereavement, the length of the leave, and what relations qualify.

Next, you must make a decision as to how your employees will acquire their PTO, through accrual or by a flat rate. If it is to be through accrual, be sure to explain the accrual formula in the vacation policy since it may be confusing to employees.

Once you’ve settled on accrual or flat rate, you must consider the time period of your PTO policy. You can have a rollover policy that allows a certain amount of PTO to roll over to the next year. Or, you can have a “use it or lose it” policy in which employees have to use all their PTO time by a certain date or forfeit it.

Next, decide on how long the employee has to wait until they are eligible for PTO. Many employers require a probationary period of 30, 60, or 90 days before an employee can take advantage of PTO. Although there are some state and city laws that require sick leave to be available at a certain time or accrued in a specific manner, there are no time requirements for vacation time. Be sure to check your local laws so that your policy will be compliant.

Also, determine whether you will offer jury leave, paternity, and maternity leave. While jury leave will have a tiny effect on your organization, paternity and maternity leave will likely have a much larger impact for the productivity of the team, but also your reputation as an employer.

Lastly, you must outline the process through which PTO requests are submitted, approved or rejected. This decision is crucial because the underlying process is the foundation of the administration of your PTO policy.

With all of these decisions made, you are ready to draft your employee vacation policy. Be sure to explain each point in your policy clearly and with specificity. It’s a good idea to have your organization’s attorney review the policy before you distribute it to employees to make sure it is compliant with federal, state, and local laws.

With Humanity's Leave module, supervisors can easily manage vacation, sick leave, and other time off requests and always get a clear view of employee availability.

06 Effective Ways to Onboard Employees

Enterprises cannot afford to be lenient when it comes to onboarding. Not only does onboarding affect employees’ abilities to deliver in the new role, it also impacts the success of employee integrating into the organization. In Chapter 6, we will discuss four levels that employers can use to help new employees maximize onboarding success (self-efficacy, role clarity, social integration, and knowledge of the culture). You will also learn how to create an effective employee onboarding strategy, how to choose the right software to help you on the way, and how to create meaningful employee training.

Employee onboarding is the process of integrating a new employee with the company. The process also provides the new hire with the information and tools they need to become a productive member of the team.

Think of onboarding as a type of organizational socialization. During this time, employers have a responsibility to help new hires adjust to the social and performance aspects of their new job.

The value of strategic onboarding can’t be overstated. HR experts say that the first few days and months of a new employee’s experience are foundational because an optimal experience ensures a higher rate of retention.

The reality is that 31 percent of new hires quit within the first six months. Looking only at hourly employees, that number jumps to 50 percent.

Since it can cost between 30 percent of a non-skilled hourly employee’s annual salary and 100 percent of a skilled hourly employee’s annual salary to replace them, it is of paramount importance to have a comprehensive employee onboarding process that is welcoming and makes the new hire feel as comfortable and empowered as possible.

In addition to inoculating the organization against turnover, a formal employee onboarding process increases job satisfaction by jump-starting relationships. The formal process also serves to increase job performance by clearly communicating the organization’s objectives and the role that employee plays in the effort to achieve those objectives.

Researchers have identified four major levers that organizations can use to help new employees maximize their onboarding success. They are self-efficacy, role clarity, social integration, and knowledge of the culture.

Creating a Comprehensive Employee Onboarding Process

Onboarding is sometimes confused with employee orientation. This is unfortunate because onboarding is so much more than completing paperwork and learning where the breakroom is. A comprehensive employee onboarding process begins before the employee arrives and can last for up to 12 months.

Some companies set up online onboarding portals for new hires, so that as soon as they accept the job, they have access to welcome messages, information about where to go and what to expect, details on the dress code, a copy of the employee handbook, as well as details about job responsibilities. Depending on the portal, new hires might have the ability to fill out paperwork such as a W-4 or I-9 online. This type of employee self-service onboarding process is becoming very popular.

On the first day, you should be setting expectations and introducing objectives for the latest member of the team. New employees need to have a clear understanding of what their job duties and responsibilities are. Additionally, a part of this process involves the early stages of acclimating them to the corporate culture.

The first week is extremely important, so make sure any necessary training takes place as soon as possible. You don’t want to overwhelm the new employee. Make the training manageable. You might want to consider assigning a mentor or encouraging them to pick a mentor that will help them settle into their new role.

After about 30 days, check in with the new employee to make sure that they are comfortable, satisfied, and engaged. It’s also helpful to review their progress and give them feedback on their early contributions. Add another check-in at three months and six months. This shows that you really care about their needs and career path.

At the end of the first year is when traditional onboarding transitions into retention and employee satisfaction. If you’ve stayed in contact with the employee, and they are a good fit, they will have a successful future in your organization.

How to Choose Employee Onboarding Software

Understanding how vital the onboarding process is, you can see how equally important it is to choose the right employee onboarding software for your organization. Because it is the centerpiece of your onboarding efforts, the software must be able to support each element of your onboarding plan.

First, clarify your requirements. Instead of focusing on all of the features the software offers, independently decide what features you need, then look for them. For instance, if training programs are important to you, then select a solution that does training well.

Next, set a budget. It’s easier to settle upon a solution when you know how much you are willing to spend. The problem is that it is difficult to compare costs since pricing models differ from provider to provider. Some may charge a monthly or annual subscription, while others charge per user. It’s up to you to do a cost-benefit analysis and figure out which package fits your budget the best.

Also, find out what support is offered. Getting familiar with a new system takes time and effort from the entire hiring team. You may not need 24/7 phone support; however, it’s good to know what support features are in place and what you can expect when you need to contact the vendor.

Finally, take advantage of the trial period or demo if one is offered. It’s important to see the solution in action before investing into it. Trials and demos give you a chance to determine whether the solution fits your needs and matches your expectations.

Creating Employee Training

Effective onboarding often involves training. When done well, training can increase productivity while decreasing costs due to waste and inefficiencies. Training can also help the organization stay in compliance with applicable laws and regulations. And, training can help the new employee settle into their role and increase their job satisfaction, leading to lower turnover.

Here are the guidelines for creating effective training for new hires.

Establish goals

The starting point for this step is a needs assessment. Deciding on training goals will help determine required coursework. Goals might include teaching specific tasks or skills, or help the employee understand specific job requirements that might relate to productivity or safety.

Start by looking into the employee’s job description for direction. Next, define the outcome. Know exactly what you want the employee to be able to do. This will help in the evaluation stage. Next, set a level of achievement. What score does the employee need on an assessment to be considered to have passed the test? Finally, set a timeline. Each goal should include a timeline for when you want the training completed.

Appoint a trainer

A trainer is needed to monitor the progress of each employee and to make sure the training moves forward as planned. The trainer should also maintain records of the training and hold employees accountable for sticking to the training schedule.

Decide on the required courses

As mentioned, the required courses should be based on goals. Here are a few possible directions:

Determine the format of training

Training may be online, classroom, or one-on-one depending on the subject matter and how it is best presented. Try to mix up the format to engage the employee.

Schedule time for training

Plan when, where, and for how long you expect employees to undergo training. Then, provide a place for training and protect that time from interruptions. Employees are likely to retain more during shorter periods of learning, so don’t make the training time too long. Take lots of breaks.

Evaluate the training

When employees finish a course, review your plan to see if it has been effective. Passing scores are not good enough evaluation of the course. Discuss the coursework with the employee to check whether they think the knowledge they gained will help them to do their job. Observe the employee to see whether they are using the knowledge they’ve learned. Based on your findings, tweak the course to perfect it.

Recognize achievement

Many employers decide to offer an incentive for completing a course of training. Having some type of reward, tangible or intangible, provides an incentive for taking the course and shows employees you support their desire to learn, even if it is a mandatory part of their jobs.

Humanity helps hiring managers upgrade the onboarding process and promote knowledge sharing with a dedicated, built-in Training module.

07 Combating Employee Absenteeism in the Workplace

Looking into the causes and consequences of employee absenteeism, Chapter 7 will show you how to efficiently eliminate absenteeism from your organization. You will learn how to identify and measure absenteeism in your organization, benchmark it against other industries, what measures to implement to discourage employees from being absent, and how to draw up an employee absenteeism policy for your organizational culture.

While it is expected employees to miss a certain number of work days each year, excessive absences can result in decreased productivity and can have a major effect on company morale and finances. This makes absenteeism a strategic problem across the globe. Consequently, absenteeism is one of the most studied constructs in organizational behavior and human resources.

Employee Absenteeism Definition

The definition of absenteeism ranges from a causal absence from work to a habitual absence from work for one or more days, usually justified by a doctor, but actually due to personal interests or a poor sense of duty.

In a broad sense, employee absenteeism falls into two categories: planned absenteeism and unplanned absenteeism.

Planned absenteeism includes long-term absences, annual leave and other time paid off, vacation leave, staff/workforce development leave, government service leave, routine and other planned medical treatment.

Unplanned absenteeism includes unplanned/emergency absence and short-term absences (not otherwise planned or announced).

Researchers have identified the five main causes of employee absenteeism. The first cause is related to the individual characteristics of the employee, such as gender, age, and personal wealth.

Second, one’s cultural sense of responsibility plays a role in the propensity for absence. The culture of the organization also has an impact in terms of motivating employees to come to work instead of being absent.

Third, contractual agreements and organizational flexibility are key factors. If being absent tends to break a contract, absences are fewer. Likewise, the less flexible an organization is around the issue of absences, the fewer absences take place.

Fourth, who pays for the absence matters. If the employee is financially responsible for being absent, they will take fewer days off because they won’t get paid for them.

Fifth, market conditions play an underlying role. When the demand for labor is high, absences tend to be higher because employees have other employment options.

As you can see, absenteeism is a complex phenomenon directly connected to the individual and the organization’s behavior. There is not simply one type of absenteeism or one cause of absenteeism. The issue must be understood and dealt holistically.

How to Measure Employee Absenteeism

To gain an understanding of employee absenteeism, you must first calculate the absenteeism rate in your organization. Here is the formula:

Absenteeism Rate = (Average Number of Employees X Missed Workdays) / (Average Number of Employees X Total Workdays) X 100

  1. If you hired or terminated employees during the period you want to measure, you need to find your average number of employees. You can find the average by adding the number of employees you had at the beginning and the end of the period and divide the sum by two.
  2. Next, you must calculate the number of total workdays during the period.
  3. Now, determine the number of workdays employees missed due to absenteeism. Although it’s easiest to calculate missed workdays by using full shifts, you can also calculate partially missed days by dividing the number of hours missed by total workday hours.
  4. Now that you know how to calculate each part of the equation, plug your numbers into the formula.

Employee Absenteeism Statistics

The United States Department of Labor, Bureau of Labor Statistics (BLS) keeps track of absenteeism by industry. According to the BLS, the absence rate for all full-time wage and salary workers is 2.8 percent. This means, on average, 2.8 percent of the workforce is absent from work on regular work days.

Here are the average absentee rates by industry as reported for 2017.


How to Reduce Employee Absenteeism

If employee absenteeism is a problem in your organization, managers should take action right away. It’s a good starting point to evaluate the severity of the problem. Use internal benchmarks to see how your absenteeism rate is trending. Then, use external benchmarks from the BLS to find out where your organization stands relative to other organizations in your industry. Benchmarking like this will give you a foundation for setting your goal and formulating a plan to reduce absenteeism in your organization.

Once you have an understanding of your absenteeism problem, you can take steps to manage it. There are many things you can do. Here are just a few tips:

Set clear attendance expectation. Creating a clear attendance policy can go a long way towards reducing absenteeism. Setting expectations also requires clear communication about the policy and the repercussions of absences.

Track attendance. It’s important to decide on the level of tracking you need—for example, whether every absence and the reason should be noted or if tardiness will be counted against the employee’s allowed absences.

Enforce the attendance policy consistently. It can be tempting to allow more absences than the attendance policy allows when you know that an employee is facing a difficult situation. While you have to decide how strict you want to be, it’s best to enforce the policy consistently to avoid claims of favoritism or discrimination. This can be challenging to handle when dealing with different departments or divisions because one manager may be more lenient and another manager may go “by the book” when handling absences. Because the inconsistent application of the rules can lead to resentment and worse, all managers should be trained on how to implement the attendance policy consistently.

Be generous with shift changes. Whenever possible, try to accommodate your employees’ need to trade shifts with co-workers. Sometimes a simple schedule change is enough to avoid the employee missing work or being late.

Keep employees motivated and engaged. Happy employees are less likely to abuse an absence policy.

Reward good attendance. Consider implementing a program that rewards good attendance. Positive feedback and a token award or a gift can go a long way towards encouraging employees to follow the schedule and only miss work when it is absolutely unavoidable.

What to Include in Your Employee Absenteeism Policy

Every organization should have an employee attendance and absenteeism policy. It is a document that sets the organization’s expectations regarding attendance, as well as the employees’ rights and obligations. Here are some of the provisions that every policy should have:

Define employee work hours.

Employees should be informed about what hours they are expected to work. For organizations with various shifts, the policy should outline the start and stop time of each individual shift.

Define tardiness and absence.

It’s important to clearly define when someone is late and when someone is absent. Some tardiness may be allowed. If there is a buffer that employees have before they are considered tardy, it should be defined. Also, when is an employee considered to be absent and not simply late should be defined as well.

Outline clear disciplinary action.

There must be a consequence for being tardy or not showing up to work at all. Those consequences need to be detailed in the policy so that each employee is aware of them. For example, one unexcused missed shift may be allowed along with a verbal warning. However, after the second missed shift, the employee may get a written warning. The third missed shift may result in a disciplinary meeting that may end in termination.

Set employee leave rules.

Your policy should also have provisions regarding time off. How far in advance must your employees request time off? How many days off are they entitled to per year? The policy should answer these questions.

Set shift trade rules.

If you allow your employees to trade shifts, the rules of the trading process must be clearly outlined. It’s often the case that it is up to the employee to find a replacement if they plan on missing a shift. Be sure to detail the process and indicate whether supervisor approval is required.

Federal, state, and local laws.

Your organization may be subject to a federal, state, or local law protecting your workers. So, it is important to be aware of those laws and stay in compliance. One important area of compliance is the Family and Medical Leave Act. It requires covered employers to provide employees with job-protected and unpaid leave for qualified medical and family reasons. These reasons include pregnancy, adoption, foster care placement of a child, personal or family illness, or family military leave.

Employee absenteeism results in roughly $3,600 per year for each hourly worker.

Given the consequences that organizations could face resulting from high levels of work absences, leaders should develop strategies to manage absenteeism to support organizational growth and stability.

In addition to developing and enforcing an employee attendance policy that fits your organization’s culture, consider investing in an automated cloud-based time tracking solution. Because worked hours flow directly into payroll, keeping track of hours is much more efficient. Using a solution that also allows for easy shift trades is just one more way you can engage your employees and empower them to manage their own attendance.

Curb employee absenteeism with Humanity—allow your staff members to set their availability and autonomously arrange shift trades.

08 Reducing Employee Turnover

Nearly 30% of newly employed salaried workers quit within their first six months with the company. With hourly workers, this figure jumps to 50%. To help you retain top performers in your organization, Chapter 8 clarifies common misunderstandings on employee turnover, explains the different types of turnover, the implications and costs, and provides a comprehensive, step-by-step action plan to reduce turnover in your organization.

One of the most critical issues facing organizations today is how to retain the employees they want to keep. Reducing employee turnover is a complex skill that requires an understanding of why employees leave and why they stay. Armed with this knowledge, you can then develop an effective retention management plan.

What is Employee Turnover?

Employees leave organizations for different reasons. Some find a better job, some go back to school, and some follow a spouse who has been transferred out of town. Others retire, get angry about something and quit on impulse, or never intended to keep working after earning a certain amount of money. All these reasons are examples of turnover, and they all have different organizational implications.

Voluntary turnover is initiated by the employee—it’s when they decide to leave the organization. Involuntary turnover is initiated by the organization, when the employee gets dismissed.

If the turnover is voluntary, it may be functional or dysfunctional. Dysfunctional turnover is harmful to the organization and can take numerous forms, including the exit of high performers and employees with hard-to-replace skills, departures of women or minority group members that erode the diversity of your company’s workforce, and turnover rates that lead to high replacement costs. By contrast, functional turnover does not hurt an organization. Examples of this type of turnover include the exit of poor performers or employees whose talents are easy to replace.

Finally, some voluntary turnover is avoidable, and some is unavoidable. Avoidable turnover stems from causes that the organization may be able to influence. For example, if employees are leaving because of low job satisfaction, the company could improve the situation by redesigning jobs to offer more challenges or more opportunities for people to develop their skills. Unavoidable turnover is caused by circumstances over which the organization has little or no control. For instance, if employees leave because of health problems or a desire to return to school, there may be little the organization can do to keep them.

The distinction between avoidable and unavoidable turnover is important because it makes little sense for an organization to invest heavily in reducing turnover that arises from largely unavoidable reasons.

How to Calculate Employee Turnover

Calculating employee turnover rate is straightforward. First, determine the average number of employees during a defined period, by dividing the sum of employees at the beginning and the end of the period by two. To find the employee turnover rate, divide the number of employees separated during the period by the average number of employees.

Stated as a formula, the calculation is:

Turnover Rate = 100 x (Separated Employees/((Beginning Size of Workforce + Ending Size of Workforce)/2)).

For example, if you have 75 employees at the start of the period and 85 at the end, your average number of employees is 80. If 16 employees left the company, that’s 16/80, or 20 percent.

Employee Turnover Statistics

The government routinely distributes employee turnover statistics. Here is the employee turnover rate by industry as of January 2019 according to the U.S. Department of Labor, Bureau of Labor Statistics:


Why Employee Turnover Matters

Even when the job market is tight and people are strongly motivated to stay with their current employer, it would be shortsighted to ignore retention management. That’s because even high unemployment rates have little impact on the turnover of top-performing employees or those with in-demand skills.

Moreover, businesses in all industries are facing impending shortages of overall talent, as well as a dearth of employees with specialized competencies that contribute to the companies’ competitive advantage. Organizations that systematically approach retention—in good times and bad—will stand a greater chance of weathering such shortages.

Turnover matters for three key reasons:

  1. it is costly;
  2. it affects a business’s performance;
  3. it may become increasingly difficult to manage

The Cost of Employee Turnover

Employee departures cost a company time, money, and other resources.

Research suggests that direct replacement costs can reach as high as 50%-60% of an employee’s annual salary, with total costs associated with turnover ranging from 90% to 200% of annual salary.

If these estimates strike you as high, keep in mind that in addition to the obvious direct costs associated with turnover (such as accrued paid time off and replacement expenses), there are numerous other costs. Those costs include:

Financial Costs:

Replacement Costs:

Training Costs:

Other Costs:

Clearly, turnover costs can have an alarming impact. One study estimated that turnover-related costs represent more than 12% of pre-tax income for the average company and nearly 40% for companies at the 75th percentile for turnover rate.

However, remember that not all turnover is harmful for an organization. As noted earlier, some turnover may generate important benefits. For example, the new hire may turn out to be more productive or skilled than the previous employees.

To develop an effective retention plan, you need to consider both the costs and benefits associated with turnover in your organization.

Turnover Affects Organizational Performance

A growing body of research links high turnover rates to shortfalls in organizational performance. For example, one nationwide study of nurses at 407 hospitals showed that turnover among registered nurses is positively and linearly associated with both operating and personnel costs per adjusted admission.

Likewise, reducing turnover rates has been shown to improve sales growth and workforce morale. In addition, high-performance HR practices (including reduction of dysfunctional turnover rates) increase firm profitability and market value.

These relationships become even more pronounced when you consider who is leaving. For instance, research shows that high turnover among employees with extensive social capital can dramatically erode organizational performance. Thus, a savvy HR manager can make a clear business case for tailoring turnover management strategies to the types of employees departing the organization.

Retention May Become More Challenging

Are you ready for a talent crunch? Opinions abound regarding whether demographic and labor market trends signal an impending shortage of overall labor supply.

For example, according to Manpower, Inc., “Demographic shifts (aging populations, declining birth rates, economic migration), social evolution, inadequate educational programs, globalization, and entrepreneurial practices (outsourcing, offshoring, on-demand employment) are . . . causing [labor] shortages, not only in the overall availability of talent but also—and more significantly—in the specific skills and competencies required.

Why Employees Leave

Much research on talent retention has centered on understanding the varied reasons behind employees’ decisions to leave organizations, as well as the processes by which people make such choices. By understanding why people leave, organizations can also gain a better idea of why people stay and can learn how to influence these decisions.

The theory of organizational equilibrium can shed valuable light on these matters. According to this theory, an individual will stay with an organization as long as the inducements it offers (such as satisfactory pay, good working conditions, and developmental opportunities) are equal to or greater than the contributions (time, effort) required of the person by the organization.

Moreover, these judgments are affected by both the individual’s desire to leave the organization and the ease with which they could depart. Clearly, turnover is a complex process. That is, although some individuals may quit a job on impulse, most people who leave spend time initially evaluating their current job against possible alternatives, developing intentions about what to do, and engaging in various types of job search behavior.

Specific turnover drivers affect key job attitudes such as satisfaction with one’s role and commitment to the organization. Low satisfaction and commitment can initiate the withdrawal process, which includes thoughts of quitting, job searching, comparison of alternative opportunities, and the intention to leave. This process may lead to turnover if the organization fails to manage it effectively.

Turnover drivers may also produce other work behaviors that suggest withdrawal, such as absenteeism, lateness, and poor performance, any of which may end in a departure without the person going through a job search, evaluation of alternatives, or extended consideration of quitting.

The lesson? To proactively manage retention, organizations must monitor and adjust key aspects of the work environment that influence employees’ desire to stay or leave.

When someone has numerous alternatives that are more attractive than their current role, the decision to leave grows that much easier. Retention-savvy managers should thus keep tabs on alternate opportunities, so they can ensure that positions remain competitive.

Why Employees Stay

Of course, it is also valuable to understand why employees stay.

Some recent studies have examined the ways in which employees become embedded in their jobs and their communities. As employees participate in their professional and community life, they develop a web of connections and relationships on and off the job. Leaving a job would require severing or rearranging these connections. Employees who have many connections are more embedded, and thus have numerous reasons to stay in an organization.

According to researchers, there are three types of connections that foster embeddedness:

  1. “links,”
  2. “fit,” and
  3. “sacrifice.”

Each of these types may be related to the organization or the surrounding community.

Links are connections with other people, groups, or organizations. Examples include relationships with co-workers, work groups, mentors, friends, relatives, church groups, and so forth. Employees with numerous links to others in their organization and community are more embedded and would find it more difficult to leave.

Fit represents the extent to which employees see themselves as compatible with their job, organization, and community. For example, an employee who relishes outdoor activities and lives in a community that offers excellent outdoor opportunities would find it more difficult to leave their job if doing so required moving to another community that did not provide such opportunities.

Sacrifice represents forms of value a person would have to give up if they left a job. Sacrifices include financial rewards based on tenure, a positive work environment, promotional opportunities, status, in the community, and so forth. Employees who would have to sacrifice more are more embedded and therefore more likely to stay.

Developing and Implementing a Retention Management Plan

Simple one-shot retention efforts (for example, a single employee attitude survey, a one-time bonus, or a once-offered management training program) are unlikely to exert much impact over the long run.

To manage retention most effectively, you need to engage in an ongoing diagnosis of the nature and causes of turnover, as well as develop (and constantly hone) the right mix of retention initiatives.

That calls for thinking about retention before employees are hired, while they’re working at your company, and after they leave. As an HR professional, you have a critical role to play in this process. Indeed, many organizations are integrating their retention efforts into a broader talent management strategy.

Talent management comprises workforce planning, hiring, development, and retention to ensure that the organization has access to the quality and quantity of talent it needs to compete now and in the future. A recent study concluded that 53% of organizations have a talent management initiative in place, and 76% of these enterprises identify talent management as a top organizational priority.

But keep in mind that each organization is unique, operates in its own idiosyncratic environment, and has its own human capital strategies and challenges. Even within a single organization, retention goals and challenges may differ across departments, divisions, job types, geographic locations, and even individuals. Thus, one-size-fits-all retention initiatives may backfire.

How, then, should you approach the task of developing the right retention management plan for your organization?

Step 1: Turnover Analysis

Not all voluntary turnover is harmful to an organization. Turnover among underperformers, turnover that enables your company to tap fresh perspectives and skill sets or lowers labor costs are all examples of functional turnover. Moreover, in most cases, it’s impossible to prevent every employee from leaving a company.

However, turnover becomes dysfunctional when the wrong people are leaving, or when the turnover rate becomes so high that the accompanying costs and instability outweigh the benefits.

To determine whether turnover is problematic in your enterprise, you need to conduct a turnover analysis. An effective turnover analysis examines three questions:

  1. How many people are leaving (turnover rate)?
  2. Who is leaving?
  3. What are the relative costs and benefits of your current turnover?

Use the turnover equation to calculate your turnover rate for a certain period of time.
Also, track types of turnover (such as voluntary vs. involuntary and avoidable vs. unavoidable), type of employee (part-time or full-time), job category, job level, geographic location, and other categorizations that may be important in your organization (for instance, the performance level of departing workers). These breakout data help you identify “turnover hotspots” to focus on.

Next, benchmark your turnover rate.
Through internal benchmarking, you track your organization’s turnover rates over time. If the rate is increasing, overall or among particular groups or locations, that could be a red flag.

Through external benchmarking, you compare your organization’s turnover rates against industry and competitor rates. If your rates are significantly higher than those of rival companies, your firm may be at a competitive disadvantage.

Alternatively, relatively low rates in your company could provide an edge over rivals. The best source for benchmarking data is the Department of Labor’s Job Openings and Labor Turnover Survey.

Next, ask the question “who is leaving?”
The question of who is leaving is crucial for assessing the extent to which turnover is functional or dysfunctional, because not every employee is of equal value to your organization.

Furthermore, some employees may leave for different reasons than others. Owing to these and other differences, you should track breakout data on the performance levels, skills (especially high-demand or hard-to-replace skills), tenure, and membership in underrepresented groups (e.g., minorities, females) of individuals who leave. This information will give you a more complete picture of the extent to which turnover is a problem in your organization.

Step 2: Planning

Taken together, turnover analysis, benchmarking, and needs assessment enable you to determine the extent to which turnover is problematic in your organization. These data will help you develop appropriate responses and set your retention goals. If you’ve decided that turnover is not a problem, you may want to simply maintain the status quo while still monitoring turnover in your organization.

If you’ve determined that turnover does present a problem, you might want to consider broad-based or targeted retention strategies (or a combination of both), depending on your company’s unique situation.

Broad-based strategies are based on general principles of retention management and are intended to help reduce turnover rates across the board. For example, “Decrease annual turnover in our company by 7%.”

Targeted strategies are designed for organization-specific turnover drivers and are intended to address organization-specific issues. Often, these strategies are also used to influence turnover among certain employee populations. For instance, “Increase the retention rate of female engineers by 10%.”

When turnover costs are tolerable, turnover rates acceptable, and turnover is considered functional, then turnover is not a significant current issue. Thus, your organization can focus on monitoring the situation and maintaining the status quo.

If costs are tolerable, but employee departures are considered dysfunctional, consider low-investment strategies targeted at people who leave, for example creating more flexible work arrangements.

When costs are tolerable, but the turnover rate is problematic, you may want to try low-investment but broad-based strategies.

When both the turnover rate and who is leaving are problematic, you’ll need both targeted and broad-based strategies.

When turnover costs are deemed intolerably high, look for strategies that provide a positive cost-benefit ratio, even if they require extensive resources.

Finally, when neither the rate nor who is leaving is an issue, but turnover costs are high, companies should seek to streamline and reduce the costs associated with each person who quits.

Step 3: Implementation

The actions you take to implement your plan will depend on the strategies you are pursuing and the unique circumstances of your organization. With any organizational change, you’ll want to get top management support and buy-in for your strategy.

It will also be important to develop a communications plan to ensure that managers understand the changes and are prepared to implement new policies and procedures. Try to anticipate any possible objections to your new strategy and be prepared to address those concerns.

Step 4: Evaluation

Evaluating the results is as important as planning and implementation.

Retention efforts may require substantial investments, so you’ll want to assess their impact relative to the cost. For example, consider how many employees are leaving, which employees are leaving, and what return your company is getting on its investment in the strategies.

Consider whether these results support your company’s retention goals and, in case they don’t, if some of those goals are unrealistic and need to be modified. Also, evaluate whether unsatisfactory results suggest the need to gather new kinds of data or to develop a more effective implementation approach.

Exploring these questions can help you tease out the causes behind less-than-ideal outcomes. This allows you to objectively assess your retention strategies and make the changes needed to improve the results.

Effective Retention Practice: Employee Engagement

Strengthening employee engagement in your organization can help you retain talent. Engaged employees are satisfied with their jobs, enjoy their work and the organization, believe that their job is important, take pride in the company, and believe that their employer values their contributions.

Because of this, it’s not surprising that organizations of all sizes and types invest heavily in policies and practices that foster engagement in their workforces.

Here are a few effective ways to increase employee engagement:

Job Design — Increase meaningfulness, autonomy, variety, and co-worker support in jobs.

Recruitment and selection — Use clear communication to achieve person-job and person-organization fit. Hire internally where strategically and practically feasible.

Training and development — Provide orientation that communicates how jobs contribute to the organization’s mission and that helps new hires establish relationships with colleagues. Offer ongoing skills development.

Compensation and performance management — Consider competency-based and pay-for-performance systems. Define challenging goals. Provide positive feedback and recognition of all types of contributions.

Effectively managing employee turnover in your organization can be a challenge. You need to have a comprehensive understanding of the many strategies at your disposal. You also need the ability to put a solid retention plan into action and learn from its outcomes. However, given the high cost of turnover and the impact employee turnover has on your organization, your efforts will be well worth it.

Learn how Humanity can help you engage and retain top performers with flexible schedules and easy-to-use mobile app.

09 Improving the Scheduling Capabilities of Your Current HCM Solution

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HCM (Human Capital Management) solutions are becoming more powerful. These software suites offer a comprehensive set of modules that streamline recruiting, managing, developing, and optimizing the human resources of an organization.

HCM suite modules can include:

Even though the top HCM platforms may seem to cover all tasks in their domain, their solutions are not always robust enough for the needs of the enterprise. For instance, employee scheduling is one of the functions that can be accomplished more effectively and efficiently by a separate software platform.

If your organization is already using one of the HCM platforms that are leaders in the market, you can improve their scheduling capabilities by integrating them with a platform that specializes in scheduling.

If your organization is already using one of the HCM platforms that are leaders in the market, you can improve their scheduling capabilities by integrating them with a platform that specializes in scheduling and thus leverage the best features from both software packages. Look back to Chapter 3 for an overview of the functionalities that you can add to your current HCM solution.

Now, let’s examine scheduling integration with three of the top HCM solutions.

Workday®️ Integration

WorkDay is a powerful and sprawling platform that offers modules designed to tackle business planning, financial planning, and human capital management needs of the enterprise. Its modules empower HR and Operations managers to build workforce plans that align with business goals, while giving the Finance department instant visibility into expense and revenue impact. In addition to general financial planning, users can model employee transfers, planned hires, and attrition to get an accurate picture of your workforce.

Aside from the business and financial features of Workday, the platform has an HCM module that promises to provide managers with complete visibility into their workforce along with a better user experience to keep employees engaged. With it, managers can easily plan, recruit, and develop talent using just one system.

Moreover, managers can gain actionable insights such as a view into how workforce and organizational performance are affecting the business, where recruiting can make a difference, and an analysis of financial and workforce trends to predict what’s coming.

However, even with all of these powerful features, Workday only offers basic shift scheduling functionality. Fortunately, Workday has worked with software partners to build an ecosystem of extensions around itself to enhance its capabilities. This enables managers to integrate scheduling and time tracking solutions with Workday.

The integration automatically syncs employee details, as well as time off and leave of absence data from Workday into the integrated scheduling platform allowing managers to easily create accurate work schedules for the entire staff. And, since the sync is bidirectional, every work schedule created is automatically synced to Workday. This eliminates the need for double data entry.

Depending on the scheduling platform you select, its scheduling, time tracking, and employee engagement features will complement Workday’s suite of HCM solutions.

BambooHR®️ Integration

Targeting small and medium-sized organizations, BambooHR is an HCM that centralizes employee information in one location and makes it easy for HR professionals to access and process that information.

If desired, an organization can get one-on-one help from BambooHR regarding transferring employee data into the platform. The platform also has powerful reporting functionalities, giving managers access to pre-built reports, as well as the power to create custom reports for sharing.

Features include applicant tracking designed to make it simple for hiring managers to reach more qualified candidates and track, share, and evaluate their applicant information.

The time tracking feature does away with paper punch cards, handwritten timesheets, and complex time clock software by enabling employees to clock in and clock out using the BambooHR platform.

The employee self-onboarding feature does just that. It automates onboarding by allowing new employees to complete paperwork and get introduced to the right people before their start date.

The performance management feature helps cut to the heart of effective performance management by having web-based employee evaluations that encourage action and limit subjectivity. Moreover, BambooHR has added employee satisfaction surveys to help managers find out whether employees would recommend their organization as a good place to work, and why—or why not.

What BambooHR doesn’t have is a scheduling feature. Fortunately, it offers its software partners access to its powerful and flexible APIs so that BambooHR users can have access to scheduling and advanced time tracking features. The platform works seamlessly with apps created specifically to integrate with the platform.

Ceridian’s Dayforce®️ Integration

Ceridian’s Dayforce is an enterprise-level HCM platform that is designed to transform the employee and manager experience. By combining HR, payroll, benefits, workforce management, and talent management in a single platform, Dayforce unifies data from across the entire employee lifecycle to enable better decision-making at every level.

Through Dayforce’s HR module, managers can get a complete picture of any employee because a single employee record across the Dayforce platform puts all details about employees in one place, from compensation to benefits and performance.

The payroll module removes the pressure and burden of the traditional payroll process by enabling administrators to access data throughout the pay period, giving them more time for reviews and audits.

Dayforce’s benefits module eases the manager’s workload by empowering employees to enroll and manage their benefits. The talent management module helps managers find top talent and provides for a more seamless transition from candidate to employee. It also helps managers support employee development with continuous learning to keep the organization competitive.

Finally, the workforce management module offers time and attendance tracking, labor planning, absence management, task management, and employee scheduling. However, to offer more robust scheduling features, Dayforce integrates with third-party scheduling software.

Like with Workday, the integration automatically syncs employee details, as well as time off and leave of absence data from Dayforce into the integrated scheduling platform allowing managers to easily create accurate work schedules for the entire staff. And, since the sync is bidirectional, every work schedule created is automatically synced to Dayforce.

Humanity is integrated with top-of-the-line HCM platforms, so all key employee data are synced and double data entry is virtually eliminated.

Next Steps to Better Workforce Management

As you’ve learned, efficient workforce management can have a tremendous impact on the bottom line. Applying the advice from this book will give your business the edge over competitors in attracting and retaining top talent, no matter the industry or company size. Regardless of your title, as an HR professional or someone whose responsibilities touch HR functions, you can use this knowledge to make a decisive impact on the improvement of the workforce management process in your company.

As each company has unique requirements, it’s important to have the tools in place to support continual improvement toward the implementation of your organization’s human capital management strategy. Choosing the right employee management software and optimizing your workforce management practices will decide the long-term success of your organization. Be sure to choose a software that can be tailored to your company’s needs and that allows you to leverage its scheduling, time and attendance capabilities and integration features to get the most out of your investment in time and money. When done right, you’ll have a more satisfied team, less tardiness and absenteeism, and higher retention.

Upgrade your scheduling efforts now. Book a free demo for a quick chat with our Humanity specialist on how our cloud-based, mobile-first platform can help you succeed in streamlining workforce management processes in your organization.

Humanity is a robust, cloud-based staff scheduling platform that helps your organization alleviate all challenges discussed in this Guide. See it in action.

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