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Work-force management technology enables modeling to predict effectiveness

by Stephen Hawley Martin
for Virginia Business
December 7, 2006

A good incentive plan can have a big impact on a company's bottom line, and the right Workforce Management Technology (WMT) system, can be helpful in developing a plan because modeling can be used to determine what the impact might be. Suppose someone comes up with an incentive plan to get people to work weekends. Before instituting it, management would be wise to see how much it's going to cost.

This won't be difficult with such a system. Take last year's weekend time and attendance data, for example, overlay the new incentive program, and presto, the cost of the new incentive program can be determined. Assuming the plan produces the hoped-for behavior modification, the question then can be asked, "Will the additional expense be worth it?"

The converse can also be determined. Say there is already a weekend differential. By taking this out, or reducing it, and running the numbers, it's possible to see what the potential savings would be.

As pointed out in the new Oaklea Press release on WMT, "Working the Clock," that's due out in January, it's not even necessary to use historical data. These systems are designed to help management determine how they should staff in real-time or in the future.

For example, a certain number of each category of health care worker - CNA, LPN, RN and so forth - must to be present during a hospital shift, based on the number of patients on a particular floor, or in a unit, and the patients' acuity level, i.e., how sick the patients are and how much care they require. Set ratios can be programmed into the software so that "what if" scenarios can be run. If the cost of the incentive program seems too high, the conditions can be tweaked. Instead of a 24 hour minimum before the incentive is earned, bump it up to 30 hours and see what happens. How many employees would meet the minimum and be eligible for the bonus? How much would be saved? This ability to tweak and adjust is one of the things that make this feature so useful.

There are other ways this can be helpful. In a nursing home, for example, Medicare and Medicaid have standards that tell what's acceptable in terms of billing - according to the level of care deemed needed. If 10 residents are on a hall, Medicare and Medicaid will reimburse a certain number of providers in each category, depending on the level of acuity. The amount of care these patients are to receive has been predetermined by that agency. To staff at a lower level would be to underdeliver - to provide less care than required - thereby exposing the provider to noncompliance and quality issues. To overstaff the hall is to overdeliver and incur nonreimbursable labor expenses.

All that's needed to schedule properly is to enter the staffing requirements into the system's modeling software. Based on a projected census, the system will show the slots that need to be filled.

The same modeling system can be used in a factory. Once the number and types of widgets to be turned out by each production cell during a shift are entered, the system will calculate how many of each product configuration need to be produced during a given period of time, which is called the "takt" rate, as well as the skills and number of workers needed to accomplish this. In other words, it will project the types and the number of positions to be filled so that each work station will be manned properly. The same system can also work in retail, using a projection of what customer traffic is likely to be.

The key is to deploy the system to managers and make using the tool one of their job responsibilities. The onus should be on them to demonstrate they are using the system to manage staffing and control costs and revenue so it needs to be one element that will be covered in performance reviews.

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Stephen Hawley Martin is a former principal of The Martin Agency in Richmond and the author of more than half a dozen books including his newest, Lean Enterprise Leader: How to Get Things Done Without Doing It All Yourself. He is editor and publisher of The Oaklea Press, a book publishing business dedicated primarily to helping business executives increase productivity.