Key Insights from the 2023 Gartner® Market Guide for Workforce Management Applications Report
The way enterprises manage and engage with their workforce is undergoing a major transformation. External factors like the talent shortage, supply chain issues, and evolving worker preferences are driving organizations to rethink how they deploy, schedule, and communicate with employees. The increased needs of both employers and employees have spurred ongoing technology innovation and disruption in how large enterprises engage their workforce.
Advancements in workforce management (WFM) technology are enabling enterprises to create a more agile, data-driven approach to human capital management. These solutions are no longer just systems of record and operation; they are evolving into systems of differentiation and transformation.
According to the 2023 Gartner® Market Guide for Workforce Management Applications, this sudden demand for workforce management technology is driven by the “’talent crunch’ or ‘great resignation’ that began in the second half of 2021 (and continues today).” This has pushed many employers to renew their focus on employee experience concerns in the hopes of improving worker efficiency and addressing factors that contribute to attrition.
Additionally, per the report, “HR technology leaders go to market due to a lack of historic investment and as products approach end-of-life.” As effective labor management and quality employee experience become market differentiators for large organizations, HR leaders must consider how new workforce management capabilities can support an engaged workforce and recognize that even if they choose not to invest in these solutions, their competitors will.
Embracing modern workforce management is an increasing imperative for large enterprises, especially ones with deskless or hourly workers, with the report stating that by 2025, 80% of large enterprises are expected to invest in WFM to support the employee experience and/or digital workplace initiatives. Companies that don’t make this transition risk lagging those who make investments in their workforce.
Here are three key takeaways from Gartner’s® recent report:
WFM Helps Organizations Navigate Labor Shortages and Hiring Slowdowns
The widespread talent shortage or “talent crunch” poses major workforce challenges for many employers. However, advanced WFM systems can help organizations optimize their existing workforces during this challenging hiring environment.
In particular, the Gartner report states that “advanced forms of scheduling” can prove beneficial in meeting evolving labor needs. Examples of scheduling types supported through WFM applications can include “demand-driven scheduling, scheduling to a budget, and scheduling workers over a geographic area rather than a specific site.”
With early signs of hiring slowdowns, organizations that depend on an hourly worker environment may face challenges “due to the relatively high turnover rates among these workers.” WFM also provides insights by leveraging attendance, overtime, and scheduling data that help large enterprises navigate labor shortages by informing both short-term hiring and long-term headcount changes.
Growing Push for Cloud Native WFM Solutions
The 2023 Gartner® Market Guide for Workforce Management Applications recommends that over the next two years organizations that use on-premises and single-tenant, vendor hosted WFM applications should migrate to the latest generation of cloud solutions to “access the latest capabilities and mitigate risk.”
The report recommendation is informed by a “steady and continuous shift” from the deployment of on-premises WFM applications to cloud-hosted WFM applications. “This shift has given rise to deploying cloud-native WFM applications, one of the main characteristics of which is a multitenant architecture.”
This transition has been prompted by several factors, such as the talent shortage and growing concerns for organizational security. The report notes that an “outage of UKG’s Kronos private cloud products, caused by a ransomware attack,” has accelerated the end-of-life of these products. This has left thousands of customers to migrate away from “legacy WFM applications.”
Gartner® predicts that 60% of midsize and large companies globally will have adopted cloud-based HR management software for core HR and talent management by 2025. However, “organizations will still need to source 20% to 30% of their HR requirements (often including WFM) from other solutions.”
WFM Solutions Supports AI-Enabled Flexible Scheduling to Improve Employee Experience
Many employees today expect more control over their work schedules, a factor that has a significant impact on the current labor shortage. Inflexible schedules that don’t accommodate personal needs often lead to frustration and turnover. Per the report recommendations, HR technology leader must, “deliver an improved employee experience to the hourly workforce by reconfiguring existing WFM solutions to incorporate more flexible workforce scheduling.”
Scheduling is a core capability of workforce management applications and should provide “a means of creating efficient and fair work schedules (sometimes referred to as rotas or rosters) and providing tools to track worker productivity.” These systems leverage modern interfaces to retrieve scheduling information, allow workers to more reliable anticipate changes to shift their patterns, and may provide self-service options for employees to swap shifts.
AI-enabled skills management is an emerging capability in workforce management (WFM). This capability can transform how employees are scheduled for work by aligning talent to work based on skills matching. However, few vendors support full AI-enabled skills management in WFM capabilities.
To learn more about how comprehensive workforce management functionality, depth, and widespread usage enable organizations to unlock workforce transformation, read the full 2023 Gartner® Market Guide for Workforce Management Applications.
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Steve Goldberg shows why assessing deskless workers requires creative, multifaceted methods to reveal employee experience gaps and create improvement framework for improvement.