Guide

The real costs of yesterday’s Workforce Management 3 key challenges of disjointed practices.

The real costs of yesterday’s Workforce Management | 2

Businesses that employ hourly and frontline workers continue to experience change at a dizzying pace. An accelerating labor crunch, evolving worker expectations, skyrocketing labor costs, and outdated workforce management (WFM) systems have put many organizations—from retail to manufacturing, hospitality, and beyond—in a bind with no clear way out.

In this pressure-filled environment, company leadership must pivot to modern systems

and strategies. Regardless of industry, their priorities during this transformation are

likely to include:

• Evolving past disjointed legacy systems and manual processes

• Improving worker engagement and productivity

• Increasing agility and the ability to cope with change

Fortunately, this level of digital transformation is more attainable than ever with fully

modern digital systems like Workday.

This guide explains three hidden costs of yesterday’s WFM practices—and how Workday

addresses their root causes, bringing businesses into a powerful new operational

paradigm. This evolution is key to improving your operations, your ability to thrive in a

continuously changing environment, and the satisfaction and performance of the many

workers who keep your business running day to day.

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Welcome to Workday. Workday is modern workforce management. Anchored by our intelligent data core—

a simplified digital framework for ingesting, unifying, and applying high volumes of

data from internal and external sources—Workday provides a powerful and cohesive

WFM system. Its mobile-native functionality provides a modern experience for

frontline workers and managers, dramatically enhancing operational agility.

With machine learning (ML) built into the core architecture rather than bolted

on after the fact, Workday is an intelligent platform ready for tomorrow.

Workday has developed a range of WFM applications, including:

Workday Time Tracking

A cloud-based, global time and attendance application for simplifying one

of the most consequential and error-prone processes in an organization

Workday Absence Management

A comprehensive, intuitive tool enabling workers and managers to track

time off, absences, accruals, and more

Workday Scheduling

An intelligent scheduling system that automatically generates optimized schedules

based on worker availability, preferences, and qualifications

Workday Labor Optimization

Artificial Intelligence (AI)-enhanced scheduling based on an extensive

range of worker preferences and business constraints

Workday Payroll

See real-time labor costs without waiting for a payroll integration because

all of the Workday data exists in memory and is immediately accessible

These applications are fully integrated and rely on the same intelligent data core and

related architecture, so they all support the benefits and changes we explore below.

Learn more at workday.com.

http://workday.com/

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1 Opportunity and labor costs. In a context of extremely tight margins and limited areas of control, managers and

company leaders must identify, control, and manage cost factors that are significant to

the company and within their realm of influence. Often, these factors include labor costs—

one of the highest fixed costs for retail and many other industries.

For example, restaurants and many other businesses are seeing labor costs creep up

steadily due to increasing minimum wage rates and the high cost of replacing personnel.

One estimate says that losing and replacing an employee can cost a company 1.5–2 times

the employee’s salary. Contract or contingent workers add additional complexity and

expense to manage.

Legacy WFM practices provide little help in optimizing labor, since they tend to be slow

and reactive, involve significant manual work, and rely on individual manager’s “know-how”

or intuitions rather than data and automation. Managers and company leaders are often

left guessing about how to best reduce costs, improve margins, boost productivity,

and address changing workforce needs.

Workday fundamentally changes that norm because it was built on a modern technology

framework that automates operational and financial processes, serves up critical insights

to managers right in the flow of work, and delivers new efficiencies and innovation.

This can have immediate and significant practical effects, as Life Time discovered when

it saved 50% on overtime costs while empowering 38,000 employees with modernized,

self-service applications.

This technological shift enables companies to manage labor costs across the board,

independent of merchandise, inventory, or related cost factors over which they have

little control. It also gives leadership a clear, compelling way forward when it comes

to the significant opportunity cost of digital modernization.

• Spiraling labor costs and difficulty retaining frontline workers

• Wasted time manually tracking time, updating schedules,

and resolving scheduling conflicts

• Costly worker and IT resources required to manage old systems

• Lost opportunities due to sluggish integrations and legacy tool sets

“We have reallocated close to 50,000 manager hours per year with [Workday] automated time management.” Senior Director of Technology Life Time

Opportunity and labor costs: Do these sound familiar?

1 Builtin, “The True Costs of Employee Turnover”; Heinz, Kate; 2022.

https://www.workday.com/en-us/customer-stories/i-p/life-time-streamlines-business-management-empowers-employees.html https://builtin.com/recruiting/cost-of-turnover

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Labor and AI. Most managers have never had routine access to AI-driven insights at work.

They do now, and these insights change everything—including reversing the

widespread trend of manager attrition and fatigue.

The Workday AI capabilities automatically adjust workers and schedules to

prevent coverage and skills gaps, eliminate excess overtime and wasted spend,

reduce over- and under-scheduling, and free managers from the daily grind of

calendaring and dealing with conflicts in the back office. Instead, they’re out on

the floor, creating relationships, mentoring employees, and putting their talents

to use in more strategic ways.

Intelligent scheduling also helps managers orchestrate day-to-day operations

without bias—avoiding a traditional source of conflict and inefficiency.

They are empowered to connect their workers with the right work at the right

time and at the right cost, based on detailed knowledge of worker skills and

shift preferences—not personal hunches or favors.

Instead, managers are out on the floor, creating relationships and putting their talents to use in more strategic ways.

All of this enables businesses to cultivate a modern, digitally connected labor

force—which improves retention, satisfaction, and workers’ ability to engage

with management. Recent years have made it clear that businesses with

a connected WFM system are able to attract and retain better talent,

increase productivity, make data-driven decisions, and empower workers

to adjust to business changes quickly.

The worker experience is crucial here. Workday not only improves the worker

experience through mobile, self-service capabilities that fit people’s needs,

but it also removes significant administrative burdens from managers.

When workers have access to intuitive, mobile-native tools, they gain control

over their work lives and feel more like active participants in the workplace—

instead of passive recipients of their managers’ decisions. In the process,

they lessen their managers’ load and create efficiency for everyone.

increase in business processes initiated through worker self-service.

After moving to Workday, customers see an average

612% Current research also shows that companies increase their economic

performance when they invest in their talent, from frontline workers to the

C-suite. As noted by the Harvard Business Review, investing in the “intangibles,”

such as the worker experience and professional development, brings very

tangible financial benefits and is a signature characteristic of financially

successful companies today.2

2 Harvard Business Review, “What the Most Productive Companies Do Differently”; Charles Atkins, Asutosh Padhi, and Olivia White; 2023.

The real costs of yesterday’s Workforce Management | 6

Happy consumers and the cycle of profitability. These kinds of workforce improvements are, of course, immediately visible to

consumers. This creates a direct link between internal improvements and profitability:

not only are managers and staff able to bring their best selves to the job and perform

better, but increasingly savvy consumers witness a high-functioning, modernized

business and attribute its performance to the company’s brand as a whole.

Over time, this improves loyalty and share of wallet—and, thus, the business’s ability

to weather future industry changes.

Internal improvements

Quality attributed to the brand

Manager/worker performance

Improved loyalty and share of wallet

Over time, this improves loyalty and share of wallet—and, thus, the business’s ability to weather future changes.

AI’s ethical compass.

Workday has made significant, organization-wide commitments to effective—

and ethical—AI. In the face of profound technological and societal change,

it is vital that we commit to an ethical compass.

Ours is comprised of six key principles that guide how we develop AI and ML for

the enterprise responsibly and work to help address its broader societal impact:

• We put people first.

• We care about our society.

• We act fairly and respect the law.

• We are transparent and accountable.

• We protect data.

• We deliver enterprise-ready ML technologies.

Workday is the only company that provides transparency into how our AI models

are designed and function, and customers have control over whether their data

is used to train our models.

Learn more about the Workday commitments to ethical AI.

https://blog.workday.com/en-us/2019/workdays-commitments-to-ethical-ai.html

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2 Insight and efficiency costs. The concepts of process excellence and data excellence illustrate two crucial

pillars of a high-functioning, modern organization. In practice, one requires the

other—when both are present, businesses can make rapid, significant changes

that set them apart in their market category.

In other words, it isn’t just the core WFM processes that matter. So does the

quality of the data that feeds the WFM system. As many leaders know all too well,

decision-making is only as good as the data it’s based on.

So: when was the last time you were totally confident in your company’s data? • Laborious, out-of-date internal processes

• Poor data quality and problematic data silos

• Subpar decision-making

• Inability to adapt quickly to market changes

Insight and efficiency costs: Do these sound familiar?

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The best data: Workday and the intelligent data core. Workday is unique in the WFM market because it is architected around a cloud-native

intelligent data core—a source of complete integration, data depth and consistency,

and a unified source of truth for the entire organization. No other WFM system works

quite this way.

The costs of disjointed, untrustworthy data likely affect you and your colleagues every

day. Siloed data often requires slow, manual processes to dig insights out of disparate

(and often completely incompatible) systems. This is time-consuming, often reactive,

risky, and inefficient for administrators, frontline workers, and managers. When an

organization lacks the right data for decision-making—or lacks faith in its integrity—

it is doomed to struggle in a merciless, highly competitive environment.

When an organization lacks the right data for decision-making—or lacks faith in the data’s integrity—it is doomed to struggle in a merciless, highly competitive environment.

On the other hand, by serving up complete, connected HR, payroll, and WFM data,

Workday transforms business operations. Leaders and managers gain previously

impossible efficiency, accuracy, compliance confidence, and worker engagement.

The Workday intelligent data core also makes AI more effective wherever it is applied.

When used for time tracking and similar tasks, AI eliminates manual interpretation of

time and pay rules, and management can support workers and the business during

change of any degree or speed.

Most managers have never had routine access to AI-driven insights at work. They do now, and these insights change everything.

https://www.workday.com/en-us/why-workday/our-technology/core-technology.html

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Moving at the pace of change. Workday significantly reduces the timescale of key business processes. Operations that

used to take months or weeks—which might include onboarding, approvals, scheduling,

and much more—now take minutes or days (and often no humans are required).

As a result, transactions flow faster and with increased precision, meaning that

businesses are able to move at the speed of the market, not the speed of their own

lagging systems. Workday is especially well suited to automate repetitive, predictable

processes that are traditionally labor-intensive—saving time, reducing toil across

functions, and freeing everyone up for more strategic work, critical decision-making,

coaching and mentorship, and more.

The Workday architecture also ensures that we put the human in the loop at the

right time and right place, with all the correct context to make decisions faster, easier,

and more informed.

We put the human in the loop at the right time and right place, with all the correct context to make decisions faster, easier, and more informed.

Impact on real-life workflows. Given the sheer amount of data consumed and generated by businesses—

everything from POS and merchandising systems, HR and compliance,

customer loyalty programs, and much more—the unification of data is a

massive advancement for everyone involved. Traditionally, these silos of data

were never able to be brought together—certainly not in a simple and reliable

way—but Workday and its intelligent data core finally make that possible.

As a result, Workday brings managers and workers all of what they need,

right in the flow of work.

With workers’ HR, time, scheduling, and payroll data all connected and

accessible using modern, helpful interfaces and native mobile functionality,

everyone gains a more efficient and useful day-to-day experience:

The store manager who used to work on hunches—and pay the

price when those hunches didn’t pan out—now has immediate,

concrete data to back up their decisions.

The restaurant worker who couldn’t view their schedule or swap

shifts without driving or calling in can get everything ironed out on

their phone.

And the company leadership that could never get out from under

IT hassles and obsolescent systems can pivot to more strategic,

future-oriented priorities.

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3 Risk and compliance. We conclude with perhaps the most significant costs that weigh on decision-makers’

minds: risk and compliance.

The reality is that no human manager can stay on top of every compliance rule or

risk factor. All too often, however, they’re asked to do just that because their legacy

WFM solution doesn’t provide any guidance or safeguards. This is a recipe for stress,

fatigue, and, of course, vulnerability.

Compliance complexity.

Across the globe, administrators and managers are challenged by ever-evolving,

complicated compliance issues, including:

• Labor agreements

• Working time directives

• Data protection laws

• Audits and accountability.

Unloading these responsibilities from personnel to a unified system like Workday

does more than help your company’s people stay productive—it mitigates some

of the most significant risk factors your organization will ever face.

Risk and compliance costs: Do these sound familiar? • Complicated, time-intensive reporting processes

• Difficulty managing evolving labor laws and regulations

• Exposure to fines and damages

• Inability to anticipate problems before they occur

Intelligent system, intelligent compliance. The Workday system accounts for regulatory compliance and can proactively

alert managers to take corrective actions—changing antiquated internal policies

or updating recordkeeping, for example—before trouble arrives. Workday is

programmed for local and state differences, too, so it provides personnel with

location-specific intelligence and reporting, with which they can:

• Audit their own performance.

• Be alerted of any noncompliant behaviors and trends.

• Avoid fines and other damages.

• Solve small issues before they escalate.

• Fulfill reporting obligations fast and reliably.

Much of this compliance has to do with accurate, traceable

worker time data. Gone are the days of sticky notes and paper

sheets; today, with Workday, any appropriate person in the

organization can pull up complete, audit-quality time and

worker data to meet any need. This avoids undue complexity

with evolving scheduling and labor laws, which often include

mandatory breaks and many other factors.

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Conclusion: Modern WFM for the modern business. Not having a single, connected system to hold your employed and contingent

worker time, absence, and scheduling data is costly, inefficient, and likely to

compromise your business’s ability to adapt under significant market pressures.

It is also likely to cause compliance risks for your entire organization.

But you already knew that.

Fortunately, Workday brings modern features like AI and an intelligent data core

into your world just when you need them most. Automate all those laborious

processes. Empower your people, improve their working lives, and make them

more invested participants in the business. Protect all your data in one place,

all the time. Free your entire company from the inefficiencies of the past to help

ensure its success in the future.

You can do all of this and more with Workday. And you can do it right now.

Learn more about Workday WFM online.

https://www.workday.com/en-us/products/workforce-management/overview.html

+1-925-951-9000 +1-877-WORKDAY (+1-877-967-5329) Fax: +1-925-951-9001 workday.com

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