Workforce management (WFM) processes and activities, a major focus of investment and optimization efforts for decades, have undergone a huge transformation in recent years. In our view, this is mostly a function of two significant trends: the explosion of technology innovation associated with leveraging AI/ML and embedded analytics in many areas of a business including a range of HCM processes and operations, and a major reframing of the employer/employee relationship stemming from the now universal emphasis on elevating the employee experience (EX). This was becoming more of a strategic focus across most organizations before the pandemic, but the last two years has made delivering a great EX as an essential part of operating a business. In the absence of this, employees tend to become disengaged and many will leave. The same can be true of the customers serviced by those employees.
The EX phenomenon also involves a sea change in management mindset toward hourly workers.
The EX phenomenon also involves a sea change in management mindset toward hourly workers, specifically around the notion that when these employees’ needs, interests and goals are accounted for in meaningful ways, just as with professional or “exempt” workers, this segment of the workforce will not only be more productive, engaged and committed to results, but incidences of costly turnover — historically comparatively high among hourly (sometimes referred to as “deskless”) workers— are expected to trend downward as a result.
These dynamics have disproportionately impacted organizations with large contingents of hourly workers, including industries such as retail, manufacturing, health care, hospitality services and dining. In these types of industries and organizations, employers have to comply with Fair Labor Standards Act (FLSA) overtime laws in the U.S. as well as Department of Labor regulations, generally centered around the requirement of tracking hours worked. The subset of organizations concerned with this area of compliance is now changing following a late 2021 ruling by the European Court of Justice (ECJ) that determined all companies operating in the European Union are now legally obliged to track employee work hours for all employees, not just hourly or deskless workers. Obviously, this has had major implications for WFM software vendors, time-tracking hardware device vendors and other technology tool providers servicing customers impacted in Europe. Moreover, legislative and regulatory trends in one part of the world often eventually show up elsewhere.