Workforce Analytics: Top 7 KPIs for Employers with an Hourly Workforce

8 minutes read

Most employers acknowledge the value of HR metrics, although many are slow to get on board. But for employers who manage hourly employees, workforce analytics are too valuable to slow walk.

Tracking certain key performance indicators—KPIs—can provide employers with data-based roadmaps for optimizing their workforce. By measuring the time and labor activities of workers and managers, employers will learn how they can:

  • Improve productivity
  • Cut waste in their labor costs
  • Strengthen compliance safeguards
  • Enhance the bottom line

While this intelligence can benefit every business, for those with hourly employees—who often operate on slim margins—tracking and addressing these KPIs can make a critical difference. Learn what they are and how you can measure them using workforce analytics, if you aren’t already.

 7 Top Workforce Management KPIs   

Tracking KPIs on an organization-wide basis is essential and establishes your overall benchmarks. However, in order to act on your findings—to stop problems, make improvements, and duplicate successes—you must also be able to assess KPIs by shift, worksite and manager. Not only can you measure against your global benchmarks, you can pinpoint where your strengths and weaknesses lie. If you’re new to workforce analytics, these seven KPIs are a great place to begin: 

  1. Overtime Expenses – Keeping overtime down keeps labor costs down. That means not only knowing what your overtime expenses are, but where they’re occurring and why. Tracking KPIs by worksite and manager allows you to do identify the cause—perhaps it’s a staffing or scheduling issue?—and prevent excessive OT.
  2. Meal Break Durations –When employees take excessively long meal breaks, it drives labor costs up and productivity down. And when employees don’t take their full meal breaks as mandated, that’s a potential compliance violation that can come back to bite the employer. As a result, more employers are using HR metrics to track and manage meal breaks precisely.
  3. Absenteeism – Absenteeism hurts productivity, period. But for service businesses, excessive absenteeism can result in unmet SLAs and unhappy clients. Identifying and addressing patterns of absenteeism can ensure that managers are enforcing your HR attendance policies and meeting those all-important SLAs.
  4. Deviations from Weekly Schedules – For many employers managing an hourly workforce, effective scheduling is critical to efficiency and labor budgeting. Overlaying planned schedules with actual worktime allows employers to identify the problem’s source and guide managers toward improving their scheduling skills.
  5. Differences between Actual and Budgeted Labor Costs – It’s not enough to know that you’re over budget, to fix it, you need to know why. Measuring this KPI by worksite, shift and manager gives employers a framework for working within their labor budget and improves client invoicing, too.
  6. Open Time Clock Punches – You can have the most sophisticated time and labor system available, but if your employees aren’t using it, it’s worthless. This HR metric tracks workers’ failure to punch in and out. A higher-than-average KPI may indicate a training issue or attempted time theft.
  7. Managers’ Edits to Time Cards – For numerous financial and legal reasons, it’s key that managers handle time cards correctly and compliantly, but many employers lack tools for adequate oversight here. There are a number of more specific KPIs organized under this category, including:
  • Edits to Punch Times – If managers are regularly changing punches, this could indicate compliance violations, potential time theft, or training lapses. In addition, the more time a manager spends on a PC, the less time is spent actively managing.
  • Edits to Pay Rates – Assuming your time and labor system can handle your pay rules, managers should not be changing pay rates. The question is, are they—and if so, why?  
  • Correction Lags – The longer it takes for managers to close open punches, the less attention they’re paying to their teams’ time and attendance—and the greater the likelihood there will be inaccuracies. This can also hold up payroll. 

Getting Started with Workforce Analytics

Most employers access their workforce analytics by pulling data collected by their time and labor software. Each time an employee punches a time clock or a manager edits/approves one, the system collects valuable information about it. Your ability to view these KPIs depends on your workforce management software. Unfortunately, many workforce management software providers offer very limited HR metrics in this regard—especially when it comes to managing managers. 

EPAY is the exception. Because our time and labor system is designed for employers with an hourly workforce, our workforce analytics are, too. We give employers unprecedented visibility into what their workers and managers are up to—and tracks advanced KPIs like those described above. 

How effective is it? Well, it’s saving one EPAY client $1,000,000 every year. If you’d like to see how it works, watch our prerecorded webinar, How to Implement and Leverage Workforce Analytics. You, too, can be tracking key HR metrics—and there’s no reason to wait. 

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