Important Trends in Workforce Management Technology

At Pelorus Associates, we have studied the workforce management (WFM) space for over a decade. Our biannual reports delve deeply into the size, composition, market shares, trends, drivers and obstacles. The reports are quantitative and qualitative. We examine 30 significant trends that impact the direction of management practices and WFM technology. Reports include over 50 tables. These address a range of topics including the size and composition of the global agent workforce, highly detailed vendor market shares, and sales forecasts.

Our most recent report was published in 2018, based on 2017 statistics. This revealed a robust market valued at $549 million. The supply side remains highly concentrated with three companies—Aspect Software, NICE Systems and Verint Systems—accounting for over 70% of global revenue (see Table 1, below). We expect this pattern to continue, but with the acquisition of Stockholm-based Teleopti, Calabrio has more than doubled its WFM revenue and represents a strong challenge to the traditional leaders.

Another pattern over time has been the relatively lower adoption of WFM and nations outside North America. We calculate that WFM investment per agent is approximately $94 in North America but only $40 in the Europe, Middle East and Africa region. Investment per agent drops to just $26 in the two outsourcer-heavy regions that comprise rest of world (ROW). (see Table 2, below.) These are the combined Asia-Pacific and Caribbean/Latin America nations. There are several reasons for this. Perhaps the most important is the substantially lower labor costs, which mitigates the projected cost savings for workforce management software.

Beyond the one-off events that occur in any industry, over the years we have seen some basic underlying trends that are changing our traditional view of workforce management.

1. Applications beyond the contact center

It’s not just for contact centers anymore. A growing number of organizations are extending WFM functionality to so-called “back-office” functions. Our analysis of the Bureau of Labor Statistics’ data shows that back-office employees outnumber contact center workers by a factor of three to one. Much of what these employees do can be streamlined with today’s robotic process automation.

Verint Systems has been out front, going back to its acquisition of two companies in 2006 that specialized in this area. Extending WFM capability beyond the contact center significantly improves ROI and helps grow cus­tomer engagement by assuring that in­­teractions and transactions are executed smoothly.

2. Expansion of the WFM solution suite

Labor scheduling and forecasting continue to be the prime functions, but now WFM goes much further than that. In recent years, leading vendors have added gamification, performance management, e-learning, coaching, knowledge management, long-range planning and other applications. NICE Systems takes a broad view of workforce management. Their solution begins at the initial employee interview and continues through the onboarding process. The theory is that if you make the right hiring decision then less effort will be expended trying to improve that person’s performance.

3. Rush to the cloud

In 2012, less than 4% of global WFM revenue came from the cloud model. In 2017, that figure increased to 18%. Our contacts with leading vendors indicate that today over 30% of WFM revenue is from either SaaS providers or private cloud. And for new installations, the cloud model accounts for about 70% of revenue.

The most common implementation mode is to rely on major providers, principally Amazon Web Services, for cloud infrastructure. Aspect Software contracts with AWS but has recently added Microsoft Azure as an alternative. Customers have reasons for preferring one cloud provider over the other and providers offer different advantages. We expect the multi-cloud trend to continue as the technology for supporting different cloud environments continues to mature.

4. Leveraging artificial intelligence and analytics

Rich in historical metrics, WFM is prime for the implementation of artificial intelligence and analytics. The key application is in forecasting. Determining future staffing requirements requires analysis of numerous variables—some controllable, some not, and constantly changing. Trying to balance all these considerations in real time is beyond the ability of the human mind but it is fertile ground for artificial intelligence.

NICE Systems uses over 40 algorithms to develop schedules, and forecasts in the system automatically pick out the best one for each situation. Artificial intelligence can automatically scan data in real time and determine which models are best-suited for time and circumstances. Analytics can digest complex information to assess cause and effect. Contact center management can predict the impact of strategic and operational changes prior to making decisions.

Leading vendors are committed to AI and analytics. In 2017, Calabrio acquired Sym­metrics. In 2018, NICE Systems ac­quired Mattersight, and Verint acquired Kiran An­alytics. In March 2020, Genesys acquired gUVU, a cloud-based software provider of gamified solutions that use machine learning and behavioral analytics.

5. WFM for all

Workforce management software has long been viewed as a product for the very large and complex contact centers. In each of our reports, dating back to 2007, we lamented the absence of a product and marketing strategy for smaller contact centers.

Our research indicates that over 80% of all contact centers have fewer than 150 agents. This is a sizable market that has been ignored by the major players for too long. With its 2019 acquisition of Los Angeles-based Monet Software, Verint Systems is the first of the top-tier vendors to now offer a WFM solution designed and priced to migrate smaller contact centers from Excel spreadsheets to automated solutions.

As the high-end market continues to compress because of business consolidations, we expect other vendors to show more interest in the smaller contact centers.

6. Appealing to the millennial workforce

Today more than one in three members of the American workforce are millennials, making them the largest generation in the U.S. workforce. Over 90% of millennial workers care about work-life balance and that makes job flexibility an important factor when choosing to join or leave employers.

Chris Lilley, Chief of Human Resources at electronics retailer Crutchfield Corporation, said: “This generation really values their separation of work and home. They value work-life balance. They are also perfectly happy to work from home. They value their time at home and their social life.”

Workforce management vendors have responded by making their software mobile-friendly, often mimicking the familiar user interface of Apple smartphones. Millennials love new technology, but they want to give it a personal touch. Vendors have responded by providing tools for personalizing screen views. In response to the growing cadre of contingent workers (“gig economy”), several vendors have launched outbound messages announcing overtime opportunities, which interested parties can respond to directly from their phones. Contact center management is molding the workforce into a collaborative environment and seeking input from employees before making major decisions.

The WFM Options Have Never Been Better

Workforce management is by far the most cost-effective investment the contact center can make. For those few contact centers that have not invested in WFM, vendors now have an offer for virtually every application and industry. If you are considering replacing or upgrading your current WFM, the choices have never been better nor have you had more acquisition options.