Savings from a WFM System

When you are looking into implementing a workforce management solution, solution providers are always telling you about how they can save your company money and improve your business processes.

Now hearing those words sound nice, but what does it really mean to you without some numbers to back it up?

Let’s look at specific examples and how different industries can benefit from implementing a workforce management solution.



Example 1 – Manufacturing

If you have 1 employee, who is paid $20/hour and arrives 15 minutes late, takes a long lunch, or leaves early each day. How does this affect your company?

$20 per hour = ($12/60 per minute)
= $0.33 per minute
$0.33 per minute x 15 minutes
= $4.99 per day of unproductive time
$4.99 x 5 days per week x 52 weeks in a year
= $1300 per year of unproductive paid time


Since this is a manufacturing plant, what if you have 6 workers who are dependent on that 1 worker who is unavailable for 15 minutes every day, with each employee being paid 20/hour?

7 employees x $1,300 per year
= $9,100/year of unproductive paid time

Let’s go one step further and see what happens if half of your 100 employees adopt this habit.

15 minutes = 15/60 hours
= 0.25 hours
50 employees x 0.25 hours
= 12.5 unproductive hours per day
12.5 hours x 5 days per week x 52 weeks per year
= 3,250 hours per year of unproductive work
50 employees x $9,100/year
= $65,000 per year of unproductive wages

Now if your company needs to add additional resources to compensate for the unproductive wages, that’s an extra $65,000/year in labour costs, or even worse, if you are paying overtime the costs can be even higher.

Losing 15 minutes here and there may not seem like seem like a big deal at first, but when you take the time to analyze how it can affect your company as a whole, the results can be staggering.



Example 2 – Professional Services

Say your company has 50 hourly employees paid $15/hour and 50 salaried employees, what can a workforce management system do for you?

50 employees x $15 per hour x 40 hour week
= $30,000 in labour costs every week
$30, 000 x 52 weeks per year
= $1,560,000 in labour costs every year

If you save 1.5% of wages (1.5% is a conservative estimate – most companies save between 2 and 5%) for hourly workers with improved accuracy:

$1,560,000 x 0.015
= $23,400 in savings per year in labour costs


With software to quickly generate employee schedules, a supervisor paid $25/hour can save up to 6 hours/week:

$25 per hour x 6 hours per week
= $150 per week x 52 weeks
= $7,800 per year in savings


Adding this all up, it translates to $31,200 per year in savings, not to mention the added value of abiding by compliance regulations.



Example 3 – Retail

Let’s take a look at a chain of grocery stores with 50 different locations where managers are paid $20 per hour. With a workforce management solution, scheduling and attendance administration can be done more efficiently and effectively saving managers 2 hours per week. How does this translate into numbers?

2 hours per week x 50 locations
= 100 hours per week
100 hours x $20 per hour x 52 weeks per year
= $104,000 in savings every year

Now with the workforce management solution capabilities, managers are able to generate optimized schedules, with the right people, with the right skills in the right job at the right time, for the right cost. If each manager can save 5 hours per week in overtime, at a rate of $18 per hour, how does this impact your company?

5 overtime hours per week x 50 locations
= 250 hours per week
250 hours x $18 per hour x 52 weeks per year
= $234,000 per year in savings

In general, studies show that organizations can save up to 5% of their annual payroll costs with a workforce management solution, helping companies in the following aspects:


  • Decreasing payroll errors

  • Decreasing total payroll processing time

  • Decreasing unauthorized leave time

  • Improving labor reporting

  • Decreasing payroll inflation

  • Eliminating costs associated with paper timecards

  • Eliminating the risks of employee buddy punching or time fraud


What companies do not realize is that workforce management solutions can be utilized in all types of industries and from our following examples, the savings can be substantial.

Visit our website for more information on workforce management solutions for all industries! Follow us on Twitter and join our Linkedin group for updates on WFM and time & attendance!

Some information was taken from: http://www.ceridian.ca/webcast/