top 10 workforce management mistakes in financial services

WHITE PAPER

Top 10 Workforce Management Mistakes in Financial ServicesBest-practice tips to help improve workforce performance and business outcomes

WHITE PAPER | Top 10 Workforce Management Mistakes in Financial Services

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TABLE OF CONTENTS

Introduction 3

Top 10 Workforce Management Mistakes in Financial Services

1. Trying to manage labor compliance with outdated systems and processes 3

2. Providing a substandard mobile experience for human resources, scheduling, and timekeeping 4

3. Enforcing absence policies inconsistently and accruing time off manually 5

4. Looking the other way when hourly employees do not adhere to optimized schedules 5

5. Relying on manual and semi-automated systems for time and attendance management 6

6. Depending on disparate systems for a holistic view of the workforce 7

7. Neglecting to keep tabs on evolving employee expectations 8

8. Staffing to achieve the lowest labor cost without accounting for employee engagement and customer service 9

9. Failing to consider employee performance when determining the optimal staffing mix 9

10. Lacking a data-driven approach to optimizing workforce utilization and performance 10

Conclusion 11


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INTRODUCTIONToday’s financial services organizations recognize that success starts with strong relationships built on trust and transparency. In a competitive market, a company’s employees can make or break these crucial relationships through their interactions with customers. That’s why businesses — from wealth management and insurance firms to banks and credit unions — are investing in automated workforce solutions to help them attract, engage, and retain top talent while controlling costs and driving exceptional service.

Managing a diverse workforce of exempt and nonexempt employees across back-office, contact center, and frontline operations is no easy feat. Finding and keeping best-fit employees is challenging enough, but you also need to optimize day-to-day functions like time and attendance, scheduling, payroll, labor cost and productivity tracking, and compliance management to stay competitive and profitable. Given this complexity, it is not surprising that management teams are not always leveraging their workforce processes and technology for maximum impact.

This paper discusses the top 10 workforce management mistakes made by financial services institutions and how to avoid them. It also provides best-practice tips for improving your organization’s performance — and business results — moving forward.

1. TRYING TO MANAGE LABOR COMPLIANCE WITH OUTDATED SYSTEMS AND PROCESSESRegulatory pressure is especially intense in the financial services industry. Since 2008, the industry has grappled with expanding regulations including the Dodd-Frank Act, the Volcker Rule, and, more recently, the Department of Labor’s (DOL) new Fiduciary Rule. Even as U.S. financial institutions have transformed their balance sheets, structure, and business models to compete in the post-crisis regulatory world,1 many are still trying to manage labor compliance using outdated processes.

With so many financial regulations to worry about, updating your labor compliance processes may not seem like a top priority. But relying on outdated approaches comes with risk. The DOL administers and enforces more than 180 federal laws2 — and that doesn’t include state and local regulations. If your organization fails to keep up with rule changes and new legislation, you could pay a steep price. The DOL’s Wage and Hour Division recovered more than $1.2 billion in back wages in the last five years alone.3

Financial services institutions that operate globally face additional challenges. They must demonstrate adherence to foreign labor laws and applicable employment agreements as well as to ever-expanding global policies and extraterritorial laws. As organizations expand to more geographies — each with its own rules and regulations — labor compliance becomes increasingly complicated.

1 PwC Financial Services Institute, Regulatory Environment in Financial Services, found at https://www.pwc.com/us/en/financial-services/research-institute/regulatory-environment.html.

2 U.S. Department of Labor, Summary of Major Laws of the Department of Labor, found at https://www.dol.gov/opa/aboutdol/lawsprog.htm?apartner=aarp.

3 U.S. Department of Labor, Wage and Hour Division, found at https://www.dol.gov/whd/data/.

Financial services management teams are not always leveraging their workforce processes and technology for maximum impact.


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While managing labor compliance is always complex, it can be especially difficult when you use manual methods, semi-automated processes, or a proprietary code-based system. Automated workforce solutions enable you to configure complex work and pay rules once and apply them consistently and accurately. If regulations change, your in-house business analysts should be able to update the rules quickly and easily without any complex programming. Some systems even provide attestation solutions that allow employees to report whether they have taken state-mandated meal or rest breaks, further minimizing your compliance risk.

Because the DOL and state agencies require payroll records to be kept for proof of wages, including timecards, schedules, and overtime calculations, your workforce solution should also provide robust auditing and reporting tools to help you demonstrate compliance efforts.

2. PROVIDING A SUBSTANDARD MOBILE EXPERIENCE FOR HUMAN RESOURCES (HR), SCHEDULING, AND TIMEKEEPINGToday’s workforce is accustomed to living in a hyperconnected, instant-access world where they can get things done anytime, anywhere. This is especially true for millennials, who expect the same kinds of technology they use in their personal lives to drive communication, efficiency, and convenience in the workplace. In a recent PwC survey, 59 percent of millennials said that an employer’s provision of state-of-the art technology was important to them when considering a job.4 Given these high expectations, you need to invest in innovative mobile tools if you want to attract and retain top talent — particularly for salaried positions.

What advantages does mobile technology bring to functions like HR, timekeeping, and scheduling? For employees, it is all about convenience and empowerment. Hourly employees want the ability to punch in and out, submit timesheets, request leave or time off, or view schedules from their mobile device. Salaried employees expect anytime, anywhere access to HR information, accrual balances, and notifications. For example, on-the-go wealth advisers appreciate receiving mobile alerts when they are at risk of losing accrued paid time off (PTO) or when open enrollment is drawing to a close. Salaried employees also welcome the ability to enter and track project time on their mobile device from any location rather than waiting until they are back at the office (see Figure 1). By offering the mobile tools employees need to be self-sufficient and productive, your organization can drive higher engagement and retention rates.

4 PwC, Millennials at Work: Reshaping the Workplace (2011), found at https://www.pwc.com/m1/en/services/consulting/documents/millennials-at-work.pdf.

FIGURE 1: Salaried employees appreciate the ability to enter project time on their mobile device — anytime, anywhere — instead of waiting until they are back at the office.


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At the same time, managers need to make labor-related decisions in real time to optimize sales and service. But they cannot do that when they are tethered to the back office adjusting schedules, reviewing time sheets, and accessing reports on their desktop. Managers can be more effective with mobile tools that enable them to manage in the moment — no matter where their job takes them. Whether they are at headquarters, at a branch, or traveling between field offices, they can use mobile apps to approve time-off requests, manage exceptions, update schedules, view reports, and more to stay productive and drive better business outcomes (see Figure 2).

3. ENFORCING ABSENCE POLICIES INCONSISTENTLY AND ACCRUING TIME OFF MANUALLYWhile all employees need time off every once in a while, it is important to enforce absence and leave policies consistently and accurately. According to a Society for Human Resource Management survey, the total direct cost of employee PTO, accounting for wages/salaries, overtime costs, and replacement worker costs, was 15.4 percent of payroll. When you add indirect costs associated with productivity loss, the total cost was between 20.9 and 22.1 percent of payroll.5 These findings suggest that tracking PTO is vital for controlling labor costs across the enterprise.

Absence management and accrual tracking systems automatically enforce time-off policies to help eliminate abuse, ensure fair treatment of employees, and support compliance with government regulations such as the Fair Labor Standards Act and the Family Medical Leave Act. These solutions reduce the impact of planned, incidental, or extended employee time off by providing visibility into trends and patterns, allowing you to take action before absenteeism impacts labor costs and productivity. On-demand access to accrual balances helps employees make time-off requests based on eligibility while helping managers make informed approval decisions. These capabilities are especially important for the many salaried employees in financial services who are eligible for PTO and job-protected leave.

4. LOOKING THE OTHER WAY WHEN HOURLY EMPLOYEES DO NOT ADHERE TO OPTIMIZED SCHEDULESYou can leverage advanced forecasting and staffing tools to put the right people in the right place at the right time, but it will do little good if your hourly employees do not adhere to their schedules. Time and attendance reports can help managers quickly verify whether employees are adhering to the optimal schedules. If nonadherence is an issue, sophisticated analytics solutions can be used to quantify its business impact, providing answers to questions such as “Is employee idle time on the rise in your branches and contact center?” or “Are labor costs per transaction or call increasing?” These insights help you spot troubling trends that can negatively affect employee engagement, customer service, and the bottom line.

5 Total Financial Impact of Employee Absences in the U.S., Society for Human Resource Management, (August 2014), found at https://www.shrm.org/hr-today/news/hr-magazine/documents/kronos_us_executive_summary_final.pdf .

FIGURE 2: Mobile capabilities enable managers to perform tasks like approving time-off requests — anytime, anywhere.


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Another way you can improve schedule adherence is to empower your employees with self-service tools that give them greater flexibility and control. For example, some solutions allow employees to select shift preferences, request shift changes, swap shifts, and pick up open shifts — from their desktop or mobile device — and receive an email notification when a new schedule is posted (see Figure 3).

5. RELYING ON MANUAL AND SEMI-AUTOMATED SYSTEMS FOR TIME AND ATTENDANCE MANAGEMENTWith manual systems and inefficient time and attendance processes, many financial services organizations experience issues that can slow growth, frustrate employees, and waste managers’ time. Integrating and automating these processes can increase productivity and engagement while providing real-time visibility for controlling overtime and absenteeism costs. Even if you have an ERP system in place, its basic timekeeping functionality might not be able to handle the complex work and pay rules needed for accurate absence tracking and compliance management.

FIGURE 3: Self-service tools empower employees to swap shifts quickly and easily for greater flexibility and control over their schedules.


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Some organizations may stick with the status quo simply because they don’t have a good spot for time clocks in the branches or field offices. With today’s solutions, however, you can capture labor data from a wide range of collection sources, including time clocks, web entry, telephony, and mobile applications. Once the data is captured, automated systems eliminate timekeeping errors by automatically flagging exceptions such as missed punches, early/late arrivals, and skipped breaks that violate policies. In addition, user-defined pay rules and real-time calculations help improve payroll accuracy and facilitate compliance.

Automated time and attendance systems provide significant cost and productivity benefits that extend across the enterprise. They boost productivity by making it simple for all employees — hourly and salaried — to check PTO accrual balances and request time off. Visibility into leave liability helps finance directors to plan for future payouts. Furthermore, automated tools expedite or eliminate tedious administrative tasks so managers can focus more time on coaching employees and generating revenue.

6. DEPENDING ON DISPARATE SYSTEMS FOR A HOLISTIC VIEW OF THE WORKFORCE Many financial institutions still depend on disparate systems for various workforce functions across back-office, contact center, and frontline operations. While this cobbled-together approach may have worked well enough in the past, it could stand in the way of competitive success moving forward. In today’s fast-paced environment, there is limited time to pull together information from multiple nonintegrated systems when critical decisions need to be made.

Unified workforce solutions provide a holistic view by integrating HR, time and attendance, scheduling, and more to create a single employee record that is updated in real time. This visibility allows managers to make more informed business decisions in the moment — from reallocating frontline employees to meet higher-than-expected demand to adjusting agent schedules in order to avoid unnecessary overtime in the contact center.

Workforce solutions that integrate seamlessly with existing payroll, finance, or ERP systems offer further advantages. Integration places core business metrics in one central location to tie people-centric data to overall business results, supporting continual refinement of organizational strategies. For example, an insurance company finance director can drill down into workforce trends and costs to understand how annual labor spend is distributed across locations, departments, and positions; how new benefits packages and compensation strategies will impact spending; and what hiring targets to set for the next year’s budget.

In today’s fast-paced environment, there is limited time to pull together information from multiple nonintegrated systems when critical decisions need to be made.


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7. NEGLECTING TO KEEP TABS ON EVOLVING EMPLOYEE EXPECTATIONSAs the financial services industry strives to rebuild its image, win customer loyalty, and fuel continued growth, implementing effective people strategies is more important than ever. Because the workforce is a key differentiator in this service-oriented industry, business leaders need to take a proactive approach to engaging and retaining talent — an initiative that starts with understanding employee expectations.

The Financial Industry Survey revealed that employers may not always be in tune with what matters most to today’s multigenerational workforce. Seventy-six percent of respondents said they are driven by more than just money when looking for a job.6 What else are they looking for? Seventy-three percent of respondents said they need to see what a company stands for before joining, and 52 percent said they want their employer to have a strong philanthropic mission.7

Automated surveys provide an easy and convenient way to measure employee engage ment. Many organizations are taking advantage of pulse surveys — short questionnaires presented at frequent intervals — to gain insight into employee expectations. When conducting surveys, you should make it as simple as possible for each segment of the workforce to respond. For example, you might collect responses from hourly workers on the time clock (see Figure 4) while emailing a survey link to salaried employees.

While surveys are helpful tools for understanding employee expectations, you should not overlook the importance of ongoing manager-employee dialogue. Outdated performance review processes that use complex paper-based forms will do little to encourage meaningful communication. Automated talent management systems, however, support a flexible, data-driven approach to nurturing employee engagement. With immediate visibility into goals, managers are better able to initiate communication with employees to understand expectations and support continued development.

Why is focusing on employee engagement so important? Studies have shown that engaged employees are good for business. Organizations with high engagement report 17 percent higher productivity and 41 percent lower

absenteeism.8 There is also a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance.9 These findings suggest that an investment in employee engagement can help drive competitive advantage and higher profitability.

FIGURE 4: Some workforce solutions enable you to capture survey responses from hourly employees directly on the time clock.

6 Kronos Incorporated and Future Workplace, Study Finds Employee Engagement Critical to Fixing the Financial Industry (May 15, 2017), found at https://www.kronos.com/about-us/newsroom/study-finds-employee-engagement-critical-fixing-financial-industry.

7 Ibid.8 Gallup, State of the American Workplace (2017), at 68. 9 Dr. James L. Oakley, Linking Organizational Characteristics to Employee Attitudes and Behavior, Northwestern University

Forum for People Management and Measurement (February 2005), found at https://www.greenleaf.org/winning-workplaces/workplace-resources/research-studies/culture/linking-organizational-characteristics-to-employee-attitudes-and-behavior/.

https://www.kronos.com/resources/employee-engagement-infographics


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8. STAFFING TO ACHIEVE THE LOWEST LABOR COST WITHOUT ACCOUNTING FOR EMPLOYEE ENGAGEMENT AND CUSTOMER SERVICEAn effectively deployed workforce is the backbone of a successful omnichannel service model. This means putting employees with the right skills and competencies in the right place at the right time — and making sure they are motivated through proper incentive and engagement programs. Too often, however, financial services firms focus heavily on minimizing labor costs when staffing their offices, branches, and contact centers — an approach that can result in low employee morale and dissatisfied customers who can easily take their business elsewhere.

How can you determine the right mix of employees to optimize productivity, service, and engagement? You need to integrate data from HR, scheduling, payroll, and timekeeping to understand your total labor cost and exactly how many salaried, hourly, full-time, and part-time employees you need to meet business goals — without overspending your labor budget or burning out your workforce.

Accurate time and attendance tracking and optimized scheduling can help you keep labor costs in check. Up-to-date timekeeping data enables you to identify which hourly employees are approaching overtime or which part-time employees are about to reach the benefits eligibility threshold under the Affordable Care Act — insights that drive more cost-effective deployment decisions. Accurate time and attendance systems can also show which employees are adhering to optimal schedules based on forecasts (see #4 on page 5 or more information).

At the same time, ready access to forecasted demand and current employee profiles lets you know how many employees are needed and which ones have the skills and experience required to deliver quality service or produce other desirable business outcomes. This visibility allows you to avoid wasteful overstaffing that strains your labor budget or morale-eroding understaffing that compromises service and sales.

9. FAILING TO CONSIDER EMPLOYEE PERFORMANCE WHEN DETERMINING THE OPTIMAL STAFFING MIXWhen exceptional service really counts, you want to put your strongest performers where they will have the most impact on sales and service. But if you are not tracking the right metrics, you may not know which employees you can count on to consistently drive business goals.

Performance analytics solutions provide key labor metrics, such as transactions per staff hour worked or labor costs per transaction in a bank branch, to measure individual productivity and effectiveness. This performance insight enables managers to schedule high performers with the right skills where and when they are needed most. For example, branch managers can schedule top loan specialists during high-traffic periods. Similarly, contact center managers can staff the phones with their best agents to handle anticipated call spikes from a new marketing campaign.

An effectively deployed workforce is the backbone of a successful omnichannel service model.


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Performance metrics also offer benefits that extend beyond scheduling. For example, you can benchmark the productivity numbers for high-performing employees — based on transactions processed per hour, call resolution rates, loan closure rates, or other metrics — and implement a custom incentive pay plan to reward top producers. A leading enterprise bank took a different approach. Rather than using incentive pay plans, bank management implemented social gamification tools and internal recognition programs to successfully drive employee engagement and customer satisfaction. Innovative incentive and recognition programs like these motivate employees to excel, resulting in significant productivity and service level improvements.

10. LACKING A DATA-DRIVEN APPROACH TO OPTIMIZING WORKFORCE UTILIZATION AND PERFORMANCEThere are many variables to consider when making workforce optimization decisions. How many employees are needed to meet service demand? What skills and experience are required? Which employees are most productive? Pulling together the right data to guide decisions can be difficult and time consuming — especially when it is dispersed across multiple systems and reports. Without the ability to integrate and visualize key data and metrics, your managers are left to rely on educated guesses and gut instinct rather than actionable insights.

Advanced scheduling systems with accurate demand forecasting capabilities take the guesswork out of workforce management, helping your organization transition from reactive decision-making to proactive planning. Leveraging data from various sources, these tools demonstrate how historical trends coupled with everyday choices will impact future productivity, allowing managers to:

• Predict when and where call or foot traffic spikes will take place

• Fine-tune scheduling practices to maximize productivity and meet demand

• Identify future labor requirements early on to allow ample time for onboarding and training new employees

In addition, management dashboards can bring together financial and workforce data to guide strategic business decisions in a way that transactional data reporting simply cannot. For example, a bank’s chief operating officer (COO) can monitor performance at top branches and drill down to identify common trends such as adherence to optimal schedules (see #4 on page 5 for more information) or overtime limits. The COO can then work with branch managers to implement these best practices across all locations to improve business results.

FIGURE 5: On-demand visibility into key performance indicators for critical workforce performance categories such as overtime, absence, scheduling, productivity, and timeliness helps guide informed decisions.


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CONCLUSIONManaging a diverse financial services workforce is a complex undertaking, so even the most savvy business leaders are bound to hit some stumbling blocks. Dependence on manual and semi-automated processes or multiple disparate systems can compound your workforce management challenges. After all, you need real-time visibility and data-driven insights to effectively control labor costs, improve productivity, minimize compliance risk, and drive employee engagement.

By recognizing common workforce management pitfalls and taking steps to avoid them, your organization can better leverage your people resources to achieve a competitive edge. Implementing the recommendations in this paper can help you get more from your existing workforce processes and technology — augmenting them with advanced tools and systems integration where necessary — to support key business objectives and boost your bottom line.

top 10 workforce management mistakes in financial services

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