Magazine Article | June 19, 2012

Regulatory Compliance Drives Workforce Management Opportunities

By Gennifer Biggs, Business Solutions magazine

By leveraging its expertise in labor and leave regulations, this ISV achieved 33% revenue growth last year, and expects 50% growth in 2012.

(Photos by Tim Schemerharn)

Like many other enterprise software offerings, time and attendance products have evolved substantially in recent years. Today, time and attendance is at the center of workforce management suites that automate a broad range of labor-tracking activities and are full-fledged business enablement solutions. Supported by converging technologies that allow labor data to be indexed and analyzed, workforce management now can be used to ensure compliance with the multitude of labor and leave laws impacting organizations today.

For WorkForce Software, an independent software vendor (ISV) that has spent nearly 15 years in the workforce management business, offering expertise around compliance in the workplace has helped fuel phenomenal growth. In 2011 alone, WorkForce Software realized 33% growth in revenue and a 118% increase in SaaS bookings. WorkForce Software’s Marc Moschetto, VP of marketing, and Paul Kramer, director of compliance, recently shared with me their conviction that any solutions provider offering workforce management as part of its portfolio can take advantage of a key driver fueling the ISV’s growth — compliance.

Compliance Pushes Workforce Management Into Spotlight
Moschetto explains that many solutions providers have viewed workforce management as just time clocks and vacation tracking for so long that they have overlooked the opportunity that blossomed as compliance rules around leaves of absence and other labor laws became more strictly enforced. “Today you can integrate workforce management with other tools to create business intelligence and identify potential labor savings and areas of increased productivity if you uncover loopholes. This integration also can help you identify potential human resources issues that could result in fines or litigation,” explains Moschetto. When it comes to human resources, in particular, WorkForce Software starts its conversation with clients by discussing the impact of federal compliance laws such as the Family and Medical Leave Act, which affects every U.S. business except those with fewer than 50 employees. Labor law compliance often strikes a chord, since many companies have limited tools to automate workforce management activities in a way that addresses federal and state leaves, let alone a slew of overlapping workplace regulations.

Kramer explains that automating the processes around time and attendance and absence management empowers customers to build repeatable practices that lessen the chances of mistakes. Most leave-of-absence processes can be broken down into three steps, each of which offers the opportunity to drop the ball and accidently violate the law. The first step is leave-type determination; is an employee eligible for leave, and what kind(s)? That may seem like a simple question, but when federal leave intersects with state and local laws, as well as union or company policies, there is much room for interpretation about what kind of leave applies. With an automated process in place, companies can eliminate the risk of faulty interpretations of the laws by codifying the leave policies. From there, the second step involves managing the leave case, which involves forms, deadlines, and communications — all of which can be automated through a workforce management software solution. Lastly, workforce management solutions offered in the SaaS model can assist customers by automatically notifying them of potential changes to the federal, state, and local regulations that could impact their business. “Once you start dealing with regulations, you can’t help but realize how complicated this issue is and why a customer needs support,” explains Kramer. That’s good news for solutions providers willing to learn the labor law ropes.

While understanding federal regulations is a good start, a solutions provider can really add value with state-level expertise, considering these unique laws are often more than a business can effectively track. In fact, according to Moschetto, in the United States alone, there are currently at least 300 statespecific leave regulations addressing everything from time off for bone marrow donations to military leave. Plus, to add further complexity, these labor-leave laws can apply to just public or only private businesses, or a particular vertical, such as education. Plus, the laws can overlap with federal regulations and municipal ordinances, so you can see where the confusion begins. Moschetto explains that simply offering guidance as to what state and local laws might apply in your customer’s When you are an independent software vendor (ISV), it is incumbent upon you to find the best hardware partners you can, since ultimately, integration and seamless operations between the two will reflect on your capabilities and success. For WorkForce Software, an ISV specializing in workforce management software solutions, that hardware partner is AccuTime Systems, which offers both biometric and non-biometric terminals for time and attendance, payroll, and secure access. “After reviewing a number of terminal vendors on the market, we chose AccuTime Systems because they stood out to us as offering nonproprietary, industry-standard devices,” explains Marc Moschetto, VP of marketing for WorkForce Software. Because the ISV packages its software with AccuTime Systems hardware under its own EmpCenter brand, it was essential to identify a partner willing to not only allow rebranding, but also offer support around those bundled devices. “By purchasing AccuTime Systems terminals through WorkForce Software, our customers can rely exclusively on us for implementation, ongoing configuration, and training on both their hardware and software solutions, which helps clients have an easier time adapting to and making the most of their EmpCenter investment,” adds Moschetto. Additionally, he stresses that AccuTime Systems has delivered on its end of the partnership time and again. “They have demonstrated a willingness to meet and resolve customer needs at a moment’s notice, and that is important to us because we want to team up with a provider who shares the same philosophy as we do.” Not only has AccuTime Systems offered innovation around integrations with WorkForce Software’s product line — but also the ISV today can bundle Optimus, Prodigy, and Maximus ATS terminals as part of its EmpCenter workforce management solution — the vendor has shown support throughout the sales cycle. “In terms of marketing and sales, they not only attend our user conferences, but take an active role in these events. They also often attend relevant industry events with us,” explains Moschetto. A Key To ISV Success Is Well-Integrated Hardware AccuTime Systems allows software developer WorkForce Software to rebrand its terminals and gain market differentiation. 32 July 2012 “A simplistic ‘punch-in/punch-out’ approach to workforce management strategies simply doesn’t cut it anymore.” Marc Moschetto, WorkForce Software environment can be a tremendous value to a small or midsize business, especially since some state leave regulations can apply to even the smallest of SMBs, where access to human resources and legal counsel can be limited.

Workforce Management Sales Tied To Compliance
Offering guidance around workforce management and compliance demands an investment on the part of the solutions provider. For WorkForce Software, the issue of compliance has such far-reaching implications that two years ago it hired Kramer, a former labor law attorney, to focus entirely on the issue. The company also works diligently to stay abreast of regulatory changes by partnering with a legal information provider specializing in employment law legislation to augment its internal compliance team, and to tap into employment law networks and notification services directly from the Department of Labor. Also, as part of quarterly customer advisory board meetings, the ISV hosts (at no cost) compliance discussions with its customers to keep current on the issues and challenges they face and the support they need around workforce management issues. Establishing relationships with industry experts, such as members of the analyst and consultant community, as well as participation in industry events such regional and national conferences hosted by the American Payroll Association, also help ensure WorkForce Software stays on top of any trends looming on the horizon. The ISV further extends its value to customers by taking that knowledge and creating compliance webinars, even going so far as to offer professional education credits to those attending. “We try hard to communicate as much thought leadership as we can,” says Moschetto. “It helps establish us as experts, and that’s a differentiator in the market.”

Moschetto says the ISV’s investments in understanding compliance have been worth every penny — from hiring a practicing legal expert to expenses related to webinars and conferences. “Consider this: Within the past two years, we’ve seen about 350 new enforcement personnel added to the Federal Department of Labor’s Wage and Hour Department, and last year they created an 800 number so an employee can call and get a legal contact to help with workplace issues. The government is definitely getting more aggressive with enforcement, and that could be a disaster for a business that is violating compliance rules without even knowing it,” he says. He adds that wage-andhour complaints filed in 2011 were up 15% from 2010, and up a staggering 378% from 2000, according to a recent study. “Employers definitely need to take this seriously. That’s why a simplistic ‘punch-in/punch-out’ approach to workforce management strategies simply doesn’t cut it anymore. There’s much more at stake than just accurate paychecks,” says Moschetto. “The opportunity is tremendous, and it is only going to increase.”

Overall, WorkForce Software itself has leveraged the growing complexity around workforce management to expand its offerings — and its market share. The ISV’s flagship offering, the EmpCenter workforce management suite, has been expanded to include products focused on labor analytics, absence and leave management, and fatigue management, as well as a compliance portal, all developed to help businesses navigate through the sticky legal world of employee leaves. It seems to be a message that resonates with customers — the ISV is once again predicting double-digit growth this year. Moschetto advises other solutions providers that investing in the knowledge and skillsets needed to support customers with compliance issues is worth the time and effort, especially since it is critical to becoming a trusted provider for highly regulated industries such as nuclear power plants, transportation, petroleum, and other energy businesses. He also cautions solution providers to complete their due diligence before offering assistance to businesses; a single violation can cost that organization thousands, and a misstep by the provider can be even more onerous.