Measuring ROI: Calculating the Value of Workforce Management Software for Your Business
February 6, 2024
by Malysa O’Connor
Measuring the actual value of your workforce management (WFM) software can be difficult. That’s why understanding how to calculate return on investment (ROI) is so important in providing clarity and direction.
In this article, we’ll explore the cost factors, showcase potential value propositions, and walk you through how to calculate ROI. We’ll also guide you around the pitfalls businesses often face when measuring ROI.
Find out how to maximize your returns from workforce management software and get a glimpse at its future impact on your ROI.
Key Factors of Measuring ROI for WFM Software
- The formula for ROI calculations is (total benefits – total costs) / total costs * 100%, but you’ll also want to account for additional qualitative data to be accurate.
- Businesses will invest in the cost of the software product plus implementation, training, and ongoing costs. In return, WFM software helps create a happier and more efficient workforce, increases sales, and predicts future demand.
- Legion WFM’s software has demonstrated the ability to provide a 13x ROI, saving over 14 million dollars over three years.
Understanding ROI in Workforce Management Software
The value of your workforce management software isn’t just about its cost but also the returns it brings to your business.
ROI measures the gain or loss made from an investment relative to its cost. Regarding workforce management software like Legion WFM, this means looking at how much time and money you save over time versus what you spent implementing the system.
A WFM system should help you reduce labor costs by predicting demand and optimizing schedules. But calculating ROI is more than just dollars saved—it’s about improved efficiency (time saved) and employee and customer satisfaction rates, leading to more revenue over time (dollars earned).
The Cost Factor in Workforce Management Software
When purchasing workforce management software, businesses must factor in implementation, training, and ongoing costs.
Onboarding employees onto the new system and providing support may be additional expenses, if only in time spent. Both are necessary steps for successful integration and will become more valuable over time as staff improve at using the software.
To understand whether the cost of WFM software is worth it, you’ll need to weigh it against potential savings.
The Value Proposition of Workforce Management Software
Workforce management software will help you run your business more efficiently and maximize your resources.
Automated technology coordinates your employees’ skills and availability for much smoother operations. You’ll increase productivity and boost employee engagement at the same time.
When staff feel valued because they’re assigned tasks that suit their abilities and preferences, they will likely be more loyal to the company. Research from Gallup shows how engaged employees can significantly reduce costs and turnover rates and increase revenues.
Legion WFM takes this one step further by predicting future demand based on past data trends—giving your business a competitive edge as you plan with precision.
Calculating ROI for Workforce Management Software
To calculate the ROI of your workforce management software, start by adding up all of the costs: acquisition, implementation, and training expenses.
Then, measure the value of the software’s benefits to your business. This could be time saved due to automation or increased sales from better resource allocation.
The formula for calculating ROI is (total benefits – total costs) / total costs * 100%. But the real value may go beyond this simple calculation; don’t forget qualitative benefits like happier employees and better customer service.
What to Avoid When Measuring ROI
There are a few mistakes businesses make when measuring the ROI of their workforce management software.
One is that they overlook hidden costs like training or maintenance. It’s important to factor in all expenses, not just the upfront cost.
They may also underestimate other benefits, such as improved compliance and better employee engagement, which can significantly boost your ROI.
Also, don’t forget that it takes time to implement WFM software. The delay can impact your anticipated returns if it takes longer than expected to get up and running with a new system.
If you can avoid these pitfalls, you’ll be able to make a more accurate assessment of the value of your WFM software.
Real-World Example: How Legion Calculated the ROI for Leading Retailers
In a 2021 Forrester Total Economic Impact study, Legion interviewed four organizations that used Legion Workforce Management Software to determine the ROI for their platform. Using that data, Legion was able to calculate the potential ROI for a multi-billion dollar organization of 10,000 employees.
- Increase manager productivity: $4.2M in labor cost savings over three years.
- Scheduling optimization: $6.4M saved by having the correct number of employees at the right time.
- Reduced employee turnover: $3.6M saved by boosting employee engagement and productivity with benefits like flexible scheduling and pay. Turnover rate reduced by 5%.
- Reduced compliance violations: Reduced overtime pay by 10%, saving nearly $290,000 over three years.
The composite organization saved over 14 million dollars over three years, with an ROI of 13x using Legion WFM’s software compared to a 169% ROI for a legacy provider.
Leveraging Workforce Management Software for Maximum ROI
Get the most from your workforce management software by effectively leveraging its capabilities. Consider your company’s requirements and match them to the software features. Legion’s key benefits include:
- Better staff utilization: Efficient scheduling means no idle hands or burnout due to overload.
- Saving time & money: Accurate demand forecasting prevents unnecessary labor expenses while ensuring prompt customer attention.
- Elevated employee experience: Automated schedule delivery matches business requirements with employee preferences, leading to happier teams.
It’s important to note that while businesses will need to initially train employees to use the software, you can also plan for continuous learning of the platform. That will ensure everyone can take advantage of the platform and use it to its full potential.
WFM Software is Worth the Investment
Businesses need to know the ROI for their individual use cases in order to grasp the value of their investment in WFM software.
Costs come in various forms: acquisition, implementation, training, and ongoing expenses. With better insight into these factors, you can make informed decisions.
The value WFM software provides is substantial, from increased efficiency to optimized resource allocation—which equals significant money saved.
One thing’s for sure: Legion WFM’s proven 13x ROI shows that our software will help your business excel.
To learn more, contact us today for a demo of Legion WFM.