Whitepaper highlighting the importance of workforce management solution for the 500-1500 ee SMB market

1. September 2012
Workforce Management for the SMB: Big
Results for Small and Medium Businesses Sector Insight
Small and medium businesses (SMBs) are at the heart of economic growth Aberdeen’s Sector Insights
for many communities and regions. The SMB market, defined as provide strategic perspective
organizations with 1,000 or fewer employees, has dynamic needs and fewer and analysis of primary
resources to meet them than large organizations. This Sector Insight looks research results by industry,
at how workforce management solutions help the SMB improve market segment, or geography
productivity and business results, while relieving some of the administrative
and tactical burden previously associated with such efforts. Based on data
collected between May and August 2012 from 174 organizations, 81 of
which had fewer than 1000 employees, this document offers insights and
recommendations that will help companies succeed through better
workforce management.
The Big Impact of Workforce Management
Sector Definition
In the past, SMBs may have thought that only large companies needed or
could afford workforce management solutions. They may also have For this study, Aberdeen
implemented a Core Human Resource (HR) information system to track defines small and medium
employee data, or an automated payroll solution, and considered it businesses (SMBs) as those
workforce management. However, true workforce management, for any with 1,000 or fewer full-time
size organization, involves a combination of integrated Core HR, payroll, employees.
and time and labor management solutions. Many SMBs today are looking to
workforce management automation and labor data integration to drive
better business results, as Figure 1 illustrates.
Definition
Figure 1: Challenges Driving Workforce Management
Aberdeen defines workforce
management as inclusive of
Core HR, payroll, time and
attendance, scheduling, and
absence management
Source: Aberdeen Group, September 2012
This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and
represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.
and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

2. Workforce Management for the SMB
Page 2
SMB organizations face many of the same challenges as their larger
counterparts, but are even more likely to feel the resource crunch when it
comes to meeting them. These organizations are 49% more likely (42% Fast Facts
versus 29%) to cite time spent on manual transactions as a critical challenge
driving their focus on workforce management. Given the increasingly √ SMB organizations are 49%
diverse and dispersed workforce that comprises even smaller organizations more likely to cite time
spent on manual transactions
today, using solutions to automate and understand total workforce
as a critical challenge driving
management activity makes sense. In addition, SMBs typically have focus on workforce
proportionally smaller HR and IT departments, making productivity and management
ease-of-use essential when considering workforce management solutions.
SMBs have complex needs, but must find solutions that make sense for their
economics and staffing models.
Data Driven Decision Making
The SMB marketplace is adopting a broader definition of workforce
management that includes time, labor, and even scheduling, to offer
competitive advantage and make operations more efficient and effective. As Fast Facts
Figure 2 below shows, organizations are looking to automation and analytics
√ Organizations with
as key strategies to drive business results and address these critical
automated time and
workforce challenges, including improving workforce utilization. Aberdeen's attendance solutions
July 2012 Workforce Management study found that organizations with achieved 12% greater
automated time and attendance solutions achieved 12% greater workforce workforce capacity
capacity utilization than those with manual time and attendance processes. utilization than those with
Particularly organizations with smaller headcount need to focus on getting manual time and attendance
the most out of every member of their workforce. processes
Figure 2: Strategic Actions
Source: Aberdeen Group, September 2012
Analytics can seem daunting, the exclusive domain of larger organizations,
but in reality analytics is nothing more than using data to improve decision-
© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

3. Workforce Management for the SMB
Page 3
making. Organizations of all sizes must use all available data to make
decisions in today's competitive marketplace. Automation of workforce
management systems – like tools for tracking time and attendance,
absences, or managing schedules – lays the foundation for this kind of
workforce analytics. Automated solutions make gathering more accurate
data and sharing it between systems and across the enterprise more
feasible. This allows the organization greater visibility into workforce data,
which can help them make decisions about labor needs, improving
productivity, and labor cost management.
Reporting at the Right Level
While SMBs are ripe for the use of automation and analytics to alleviate
manual burden and drive results like the improved workforce capacity
utilization mentioned above, the needs of this segment are different than
those of larger organizations. Reporting and analytics must be at the
appropriate level to be useful for the SMB. Reporting is not necessarily
about global analytics dashboards, but more often about the ability to allow
managers to run queries and reports as they make operational decisions on
a day-to-day basis. The SMB leader needs to bring together workforce and
other business data to understand the drivers of productivity and
performance. While the SMB sector is just beginning to use automated
report functionality, this is an area of strong expected growth in the coming
year (Figure 3).
Figure 3: Reporting Functionality for the SMB
Source: Aberdeen Group, September 2012
Visibility into data and tracking activity, as it relates to overall productivity,
are key areas in which SMBs are leveraging reporting today. By providing
© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

4. Workforce Management for the SMB
Page 4
employees and managers with data, these organizations are streamlining
operations and putting information in the hands of decision makers.
Technology Enabling Flexibility
Given the economic and staffing realities of the SMB, many of these
organizations are exploring new technology options to deliver functionality
throughout their organizations. Workforce management is no exception.
Even smaller and midsize businesses are operating globally, managing Fast Facts
multiple worker types, and combining information in ways that present new √ SMB organizations are 45%
complexities when it comes to managing data and systems. As software as a more likely to indicate that
service (SaaS) and cloud-based delivery models become more prevalent, their preferred delivery
organizations are turning to these technologies to enable workforce model for Core HR and
management automation and integration. According to Aberdeen's May workforce management
2012 Integrated HCM report, organizations with less than 1,000 employees solutions is a SaaS or cloud-
are 45% more likely than larger organizations to indicate that their based model
preferred delivery model for Core HR and workforce management
solutions is a (SaaS) or cloud-based model (42% versus 31%). Typically these
technology options do not require as much time or resource investment to
implement, and can help reduce the burden on IT to support the software,
while also helping businesses remain more flexible as they grow or their
needs change. These technology solutions also offer a foundation for other
critical functionality such as mobile access to data.
More SMBs are using mobile for workforce management tools. These tools
not only improve user adoption among managers and employees, but also
to ensure greater accuracy in data collection, and greater engagement. The
SMB segment is leading the way in the use of mobile tools for workforce
Figure 4: Features of Mobile Workforce Management Solutions
Source: Aberdeen Group, September 2012
© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

5. Workforce Management for the SMB
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management: these organizations are 65% more likely to have mobile
solutions than are their larger counterparts (28% versus 17%). Self-service is
a huge driver for this adoption of mobile tools, as shown in Figure 4.
When managers and employees can access their time and labor and Core
HR data directly, the SMB organization's limited HR resources are freed to
focus on strategic and value added services. Mobile self-service also
responds to the growing trend of consumerization in business technology.
Employees have become accustomed to using mobile devices for any
number of household and personal tasks, and expect the same flexibility
from their employer. As such, self-service mobile tools can improve both
employee engagement and organizational efficiency. This is particularly
important to the SMB sector, since self-service is a driver of operational
excellence, and is a capability in place at 94% of Best-in-Class organizations.
Recommendations
Small and medium businesses looking to take advantage of workforce
management solutions to drive efficiency and effectiveness should consider
the following recommendations.
• Automate and integrate all of workforce management.
Automated and integrated Core HR, pay, and time and labor data is
critical to efficiently and effectively manage today's small or medium
business. Organizations should look to solutions that automate
these aspects to gain the greatest benefit. Automation ensures
consistency across the organization, reduces the tactical burden on
HR, and lays the foundation for self-service, mobile self-service, and
powerful analytics.
• Embrace data-driven decision-making. Analytics and reporting
is all about driving action. To create meaningful analysis,
organizations must have a multifaceted view of their business and
the individuals within it. Integrated data and systems form the
foundation which allows organizations to apply meaningful analytics
to their operations, and ultimately improve business outcomes. But
tools and technology are not enough. Organizations must also
cultivate an analytical mindset, where HR and business leaders all
feel comfortable using data to drive decisions. Any technology
solution should take into account the need to drive analytics and
deliver data to business decision makers as a critical design and
selection criteria.
• Consider the technology foundation. New ways of operating
your business require new ways of leveraging technology solutions.
As the SMB sector seeks efficient, automated HR data and
processes, they must keep in mind the financial and time investment
required to implement such solutions. SaaS and cloud-based delivery
models are new options that organizations should explore to help
them achieve not only their unification goals, but to realize cost
savings and to expedite delivery as well.
© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

6. Workforce Management for the SMB
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For more information on this or other research topics, please visit
www.aberdeen.com.
Related Research
Workforce Management 2012: Analytics into Action: Workforce Planning
Efficiency, Effectiveness and for Talent Success; March 2012
Engagement; July 2012 Human Capital Management Trends
Integrated HCM: Visibility, Readiness and 2012: Managing Talent to Lead
Results; May 2012 Organizational Growth; January 2012
Author: Mollie Lombardi, Vice President and Principal Analyst, Human Capital
Management (mollie.lombardi@aberdeen.com)
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This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies
provide for objective fact-based research and represent the best analysis available at the time of publication. Unless
otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be
reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by
Aberdeen Group, Inc. (2012a)
© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897