Workforce management (WFM) encompasses all the activities needed to maintain a productive workforce. Under the umbrella of human resource management, WFM is sometimes referred to as HRMS systems, or even part of ERP systems. Recently, the concept of workforce management has begun to evolve into workforce optimization.
Specifically, workforce management includes
- Payroll and benefits
- HR administration
- Employee self-services
- Time and attendance
- Career and succession planning / talent acquisition
- Talent management and/or applicant tracking
- Learning management and/or training management
- Performance management
- Forecasting and scheduling
- Workforce tracking and emergency assist
- Absence management
Workforce management can also encompass field service management. This provides software to optimally plan and dispatch field service technicians and their properly stocked vehicles to a customer's location in a timely manner in order to deliver against their service commitments. Field service management will itself include elements of:
- Demand management – to help forecast work orders to plan the number and expertise of staff that will be needed
- Workforce scheduler – using predefined rules to automatically optimise the schedule and use of resources (people, parts, vehicles)
- Workforce dispatcher – automatically assigning work orders within predefined zones to particular technicians
- Mobile solutions – allowing dispatchers and technicians to communicate in real time
In many markets and industries, workforce management is all about assigning the right employees with the right skills to the right job at the right time. The term is differentiated from traditional staff scheduling because staff scheduling is rooted to time management and simply manages the administration of past and future working times.
This traditional approach has since evolved into the more integrated, demand-oriented workforce management, which includes changes in personnel requirements and objectives when optimising the scheduling of staff. Besides the two core aspects of demand-orientation and optimisation, workforce management may also incorporate:
- forecasting of workload and required staff
- integration of employees into the scheduling process
- management of working times and accounts
- analysis and monitoring of the entire process.
The market for workforce management (WFM) is still quite young. In the eighties and nineties, entrepreneurs mainly focused on topics such as SCM (Supply Chain Management) or PPS (production planning systems) and, in recent years, on ERP (enterprise resource planning). As cost pressures have increased, managers have increasingly turned their attention towards HR issues. In all personnel-intensive industries, workforce management has become an important strategic element in corporate management.
Workforce management software 
Workforce management solutions can be deployed enterprise-wide. While special software is commonly used in numerous areas such as ERP (enterprise resource planning), SLM (service lifecycle management), CRM (customer relationship management) and HR (human resources) management, the management of the workforce is often still handled by using spreadsheet programs or time recording. This often results in expensive overtime, non-productive idle times, high fluctuation rates, poor customer service and opportunity costs being incurred.
In contrast, by using a software solution for demand-oriented workforce management, planners can optimise staffing by creating schedules that at all times conform as closely as possible to the actual requirement. At the same time, a WFM solution helps users to observe all relevant legislation, local agreements and the contracts of individual employees – including work-life balance guidelines.
A key aspect of workforce management is scheduling. This is achieved by establishing likely demand by analysing historical data (such as the number and duration of customer contacts, sales figures, check-out transactions or orders to be handled). Many workforce management systems also offer manual adjustment capabilities. The calculated forecast values are then converted into actual staffing requirements by means of an algorithm that is adjusted to the particular use case. The algorithm itself is based on the work of Erlang though most modern adaptations of WFM have shifted towards a richer state management, and optimizations to the original idea.
Current and future staffing requirements, short-term peak loads, availabilities, holidays, budget allowances, skills, labour law-related restrictions, as well as wage and contractual terms have to be integrated into the planning process to guarantee optimal staff deployment. In the workforce management process, the integration of employees is an important factor. In several WFM systems, employees can log in their availability or planned absences and they can bid for specific shifts so long as they have the necessary skills for the activities planned for these shifts. Experience shows that professional workforce management systems realistically fulfil more than 80 percent of employees’ shift requests. Here, employee scheduling software guarantees the best possible synthesis of optimised staff schedules and employee requests.
The more flexible the working time models and the more complex the staff scheduling becomes, the higher the requirements for correct time management becomes. As time recording and accounting of working times are closely connected to scheduling, the integration of time management into the entire process is the logical consequence. Using workforce management systems, working times are booked exactly to the required time accounts and made available for payroll accounting by means of automated processes.
Many software solutions offer a number of options for evaluating the planning in real-time, enabling short-term reactions to deviations from the forecasted demand or expected over- or understaffing. Control functions enable a permanent adaptation of the scheduled staff to the actual requirements. In other words, the optimization process allows for manual data adjustment in the case of short-term fluctuations in demand or unscheduled employee absences.
Depending on the software provider, organizations have a choice to deploy the software in their own on-premise data center, or in the provider’s private cloud. Workforce management is an appropriate type of system that organizations can access via the cloud through services such as application management and hosting.
Workforce optimization 
Workforce management is itself evolving into a solution termed workforce optimization. This builds on workforce management to encompass all aspects of managing the complete workforce lifecycle and supports the business with key insights into how its workforce is performing. There is an emphasis not simply on improving operational efficiency or on managing the workforce effectively, but tying this to key business concepts such as the customer experience. The role of workforce optimization is to tie together siloed systems and bridge between the three main stakeholders of HR, operations and IT. This approach is business driven. It involves automating entire processes, making key data more visible to support better decision-making, ensuring compliance with a wide range of relevant legislation and solving business problems related to staff. Workforce optimization is best viewed as the next logical step in the move to optimise the performance of staff and to manage and understand the impacts of staff on both operational efficiency and the customer experience.
Workforce management provides a common set of performance-based tools to support corporate management, frontline supervisors, store managers and workers across manufacturing, distribution, transportation, and retail operations. The starting point is a clear definition of the work required through engineered standards and optimal methods for performing each task as efficiently and safely as possible. Based on this foundation and demand-based forecasts, workers are scheduled, tasks assigned, performance is measured, feedback is provided and incentives are computed and paid. In addition, online training is provided along with supervisor-based coaching to bring all workers up to required levels of proficiency. It is a complete approach designed to make a workforce as productive as possible, reduce labor costs, and improve customer service.
AMR Research, 2006: The Human Capital Management Applications Report, 2005–2010
DMG Consulting: 2009 Contact Centre Workforce Management Market Report