Overwhelmed by workforce management? PSA can turn things around

One of your steady, reliable employee just quit. 

A few days later, another important team member followed. 

By the end of the month, you lost ten valuable workers.  

This is not a nightmare scenario. In the US, with a typical company size of 1000 employees, a 2.2% quit rate translates to roughly 20 to 25 resignations every month, as per Bureau of Labor Statistics.  

But filling those vacancies is another story.  

There’s only a 30% chance a role gets filled within 30 days, and the average wait is a dauting 42 days (SHRM). This lag has devastating consequences. While the company juggles to find replacements – missed sales, delayed projects, and lost opportunities pile up. And so, each vacant position costs $25,000 per month in lost revenue, and that’s for standard positions. For some roles, the cost is even higher, exceeding $42,000 per month. Multiply this by ten vacant positions, and the losses can be dizzying. 

Now, filling those vacancies is only part of the problem.  

Even for employees who remain, challenges arise. It ranges from lack of visibility into their skills, workloads, and much more. These issues further compound the difficulties of managing a workforce, leading to increased frustrations, inefficiencies, and financial losses. 

Why do organizations face such challenges when it comes to managing their workforce? 

1. Lack of visibility 

Without clear insight into the team’s skillsets, organizations miss key gaps until projects face roadblocks or deadline issues. The inability to recognize these needs and gaps also further delays the hiring process. The manager, who is unable to see individual workloads, might also unintentionally overburden certain employees. Such employees are most likely to leave for a better work-life balance. Nearly 30% of U.S workers quit their jobs in 2023 because of work-life imbalance. 

Hence, blind spots in workforce data cripple your workforce management. The saying goes, ‘you can’t manage what you can’t measure.’ But even before measurement comes visibility. Without clarity into your workforce, effective management becomes impossible.  

2. Ineffective resource management  

Some organizations do have valuable workforce data but miss the chance to truly leverage it. Are they squeezing every drop of value from that data?  

For instance, if an employee gives notice today, who on your team would be the best candidate to handle those tasks? Without clear insight into your workforce and their workload distribution, answering this question would be more of a guessing game. It requires understanding their strengths, skills, current workload, upcoming deadlines and high-priority projects. This is effective workforce management. 

3. Inaccurate billable hours and accounting 

Unless you have timesheet software or a time tracking system, there will be inaccurate time records. This results in undercharging or overcharging clients, directly impacting revenue and reputation. If employees record hours later, there is also a risk of errors. Some workers may even forget to account for all their time spent on different tasks. If this is a regular issue, this can be a massive liability for the company’s bottom line. 

Consider the number of hours employees were idle due to uneven workload distribution. Factor in the hours inaccurately reported as worked, and other errors such as invoice discrepancies, missed invoices, and so on. These issues lead to inaccurate billable hours, increasing costs and resulting in inefficient resource utilization and low work quality. 

4. Labor shortages 

Professional services businesses depend on highly skilled professionals; however, they struggle to attract high-performing talent. One reason can be attributed to failing to anticipate future project demands and hiring needs. This leads to deploying average hiring strategies, increased delays, and more hiring costs for every bad hire. 

How are industry leaders rising to meet these challenges? 

Leaders are reimagining their talent strategies, as traditional hiring and management practices are no longer sufficient.  

Hence, most organizations are turning to Professional Services Automation (PSA). It automates routine tasks and provides actionable insights. For instance, it automates, streamlines, and manages employees’ timesheets and their approval processes. Due to automation, fewer non-billable administrators are required, increasing the percentage of billable employees. According to SPI Research 2017 PS Maturity Benchmark, businesses notice a $56,000 increase in revenue per project and 17% year over year increase in professional services revenue growth. 

Based on these improvements, you can see why businesses are switching to PSA tools. PSA use is rising due to the need for better project and resource management. It has also become increasingly difficult to find, hire, retain, and deploy talent. PSA solutions ultimately match the right resources, with the right skills, at the right time, to the right projects. 

But here’s the thing – although standalone PSA tools provide benefits, the rewards are further amplified when they are integrated with the organization’s other processes. This integration improves visibility and agility, ensuring decisions are based on facts and data rather than intuition. Such decisions align the firms around projects, clients, and markets – streamlining operating processes.  

Empowering smarter HR decisions – Key strategies  

As discussed above, projecting the right time to hire, managing the workforce, retaining employees fall under the purview of human resources.  

But why don’t some organizations fully leverage their HR departments? 

It’s because they don’t recognize or leverage the strategic potential of HR. They are often seen as an administrative function rather than a strategic partner that can drive business results. Fortunately, most organizations are identifying this potential and are taking a strategic approach to human capital management. When leveraged right, HR can take smarter decisions through the following methods: 

1. Navigate with modern PSA system 

When organizations fail to perform proper resource planning, skill gaps will inevitably arise in both current and future projects. Professional services automation (PSA) systems identify these gaps early in the project management stage, providing clear visibility into where each resource is allocated. This early insight allows organizations to strategically plan their hiring processes and secure talent ahead of time. In a tight labor market, these systems also enable organizations to identify internal talent who are suitable for new roles, reducing over-reliance on external hiring.  

This is possible because modern PSA systems maintain a database of workforce competencies, performance, previous projects, skills, etc. By leveraging these systems, organizations can not only acquire the right talent through internal movement or hiring but also retain existing employees by carefully assigning projects and tasks. This improves work-life balance and reduces any potential for stress and burnout. 

2. Better resource planning strategies 

PSA also enhances resource planning by leveraging historical data and trend analysis to predict resource needs and project demands. For instance, companies often experience changing needs and demands depending on the season or their unique work cycles. By analyzing previous work data, businesses can estimate the number of resources required with a high degree of accuracy. Using data analytics and project management tools allows for the creation of detailed resource plans.  

This proactive planning helps avoid overallocation, shortages, and any risks associated. For example, if a consulting firm knows from past data that Q4 typically demands a 30% increase in workforce due to seasonal project spikes, it can plan accordingly to ensure adequate staffing without overextending its resources. 

3. Workforce efficiency and optimization 

When managers have a clear overview of employee capacity – identifying who is available, at capacity, or over–allocated – they can enhance workforce efficiency and optimization. This view allows managers to optimize work schedules and distribute workloads more effectively, allocating staff across multiple projects as needed. Additionally, PSA tools facilitate this process by integrating relevant data flows, such as leave management, performance metrics, and so on. This ensures all related information is incorporated into the resource planner, enabling accurate work assignment and promoting optimal workforce utilization. 

4. Upskilling and development  

These tools analyze past project data, including timelines, resource allocation, and project outcomes. They estimate future project requirements based on current sales pipelines, client demands, and market trends. All this data is used to forecast future project demands. This helps organizations identify potential skill gaps within the current team. This allows for upskilling in specific areas, ensuring the team is prepared for upcoming needs. Furthermore, managers can also take informed decisions about training and development programs that align with organizational goals. This supports immediate project needs and workforce optimization. 

For instance, imagine you are a project manager at a consulting firm in the health sector. The PSA tool identified previous project timelines, resources allocated, and project outcomes. It aggregated data on current client demands, such as requests for expertise in emerging healthcare technologies. After identifying a growing trend in demand for digital healthcare solutions, you can project specialized skills needed in digital healthcare technologies, which the current team partially lacks.  

5. Enhancing workforce insights and decision-making 

The real value of data is leveraging it to act. It provides actionable insights into workforce trends and helps improve decision-making. Modern professional service tools provide advanced reporting and analytics capabilities, aggregating data from various sources to offer insights into project performance, resource utilization, profitability, and other key metrics. This approach empowers businesses to make informed decisions and optimize their operations. 

Consider a consulting firm that is preparing for a surge in digital transformation projects. The PSA tool reveals that projects involving digital transformation have higher profitability but also show a pattern of delays due to a shortage of consultants with advanced data analytics skills. Using this data, the firm then invests in training for its consultants and re-assigns consultants who are underutilized, thereby balancing workloads effectively. The project managers can also adjust project timelines based on past performance data, setting more realistic deadlines and resource requirements. 

How does modern PSA give you a competitive edge in a tight market? 

Imagine running a high-performance race car without a dashboard. While it may run for some time, it is eventually bound to crash. Similarly, in the world of business, without proper visibility into your assets, effectively managing them is impossible – ultimately leading to failure, just like the car. But then again, if the same car has an outdated dashboard, it may still run, but it increases the risk of an eventual crash in the near future. Likewise, relying on outdated or traditional methods of managing the workforce is insufficient, and leads to inefficiencies and potential failures. This leads to reactive talent acquisition, inaccurate project visibility, and lack of transparency into workforce capabilities. 

A more modern professional services automation helps the organization with three non-negotiable main aspects: 

1. Talent management 

Modern professional services automation tools, like Keka, further enhance talent management by offering a suite of modern features designed for efficiency and accuracy.  

• Accurate time management: PSA tools allow for easy tracking of time at both project and employee levels, making sure every resource is accounted for. 

• Management of diverse needs: Multiple timesheet policies can be configured and assigned at client and project levels, thereby providing flexibility and customization. 

• Efficient resource utilization: Tools that come with pre-built reports on work hours help in proper resource utilization and ensuring that the right talent is deployed where it is most required. 

• Team performance impact: The team’s performance is reflected through streamlined client service delivery and feedback.  

Ultimately, these tools support skill development and performance tracking, leading to continuous employee growth and improvement, which helps in retaining and nurturing top talent. Lastly, PSA tools ensure adherence to industry standards and regulations, maintaining compliance and quality across all operations. 

2. Project management 

PSA tools ensure optimal project efficiency and control through various methods, like: 

Ensuring projects are on track: Keka, a modern PSA tool, also provides pre-built reports on project status, allowing immediate insights into project progress and potential issues.  

Utilizing resources effectively: It gives an overview of resource utilization by analyzing current workloads and future project demands, while smart resource allocation uses this data to assign the right resources to the right tasks, thereby maximizing productivity and minimizing waste. 

Completing projects on time: Streamlined project planning, tracking, and delivery are achieved through detailed project timelines, task assignments, and milestones – ensuring all projects are monitored and managed effectively. 

Allowing teams to focus on core project activities: Automated time entry and expense reporting further reduce administrative burdens by capturing and recording data through integrations with other systems, allowing teams to focus on core project activities.  

Improving client satisfaction: Since the tool provides the structure and support needed to manage projects successfully, it facilitates smooth communication among team members and with clients, facilitating a collaborative work environment – thereby improving client satisfaction. 

3. Financial management 

PSA tools integrate various financial functions into a single platform and allow unparalleled visibility and management capabilities, while also ensuring financial operations are streamlined and effective. Here’s how it improves your financial management processes: 

Complete command over project financials: It’s important to consolidate financial data into one accessible platform, allowing for real-time tracking and management. Performing all of this with Keka is a breeze. It: 

• Provides an overview of the sales pipeline along with forecasting revenue. 

• Revenue, cost, and profit margins are monitored monthly through detailed financial dashboards, offering clear insights into financial performance. 

• Analyzes revenue by vertical, client, and project, thanks to its customizable reporting features that break down financial data in multiple dimensions. 

Pre-built reports on invoicing: The tool generates pre-built reports on invoicing and streamlines the billing process, thereby ensuring accuracy and timelines. 

Budgeting, invoicing, and expense tracking: The automated tool tracks and records financial transactions, reducing manual errors and helping in the management of budgeting and expenses efficiently. 

Financial reporting: This provides detailed insights into the project’s financial health by analyzing various financial metrics and data points. This feature generates reports that offer a clear view of the project’s revenue, costs, and profit margins.  

Informed decision-making and strategic planning: Data analytics in PSA tools leverage historical and real-time financial data. It identifies trends, patterns, and correlations within financial data. Using this information, businesses can predict future financial outcomes, enabling more accurate forecasting and budgeting. 

Invoicing workflows with validation rules: PSA tools also offer the ability to set up invoicing workflows with built-in validation rules, which play a significant role in ensuring compliance and accuracy in billing processes. These workflows are designed to automate and streamline invoicing procedures. Validation rules check for discrepancies, such as incorrect billing amounts, missing information, or deviations from contractual terms, before an invoice is sent to clients. This automation helps in maintaining consistency and adherence to internal policies and industry standards. 

Your team, your success! 

Our modern PSA platform helps you leverage real-time workforce analytics to stay ahead of the competition. But it doesn’t stop there. We believe a great PSA tool should also enhance employee experience. That’s why Keka is dedicated to making sure your team feels valued and supported.