Delivering significant cost savings
In operation since 1912, Biffa is a UK leading integrated waste management company.
de Poel has been working with Biffa since 2009. As with all our clients, our operating model was implemented to ensure Biffa received maximum insight into how best to procure, manage and deploy their non-permanent staff needs. This ensured a focus on immediate cost save through the reduction of agency margins to a fair market value, but additionally a focus on value adds for both the Biffa management team and the actual agency workforce.
How did we achieve this? Conversely, you might think (for a neutral vendor temporary recruitment outsourcing specialist) this also means ensuring, wherever possible, that reliance on agency workers is reduced by converting temporary members of staff into permanent employees.
Through the management information that our e-tips® system provides, and thanks to the service agreements signed with our agencies, Biffa sites can use the 13 week placement period to ensure that they are making the right long-term hiring decisions. Additionally, we were easily able to identify a pool of temporary workers who had been temping with Biffa for over 6 months to a year, or more, who were also prime candidates for a conversion programme.
The temp-to-perm conversion programme has been incredibly fruitful for Biffa, with 595 temporary workers converted to permanent contracts in the last three years. Testimony to the success of the scheme is that attrition rates for workers who have moved along the temp to perm route have been far lower than workers coming in immediately to the permanent role, with attrition rates for the temp to perm population as low as 6%.
As well as a big win for the agency workers themselves, Biffa has also saved nearly £300,000 in the first ten months of this year from temp to perm “finders” fees by employing 200+ workers through this scheme.
“Biffa have using de Poel for over 7 years. We operate from over 190 locations throughout the UK and Northern Ireland and without the support from de Poel, managing our temporary labour and ensuring legal compliance would be extremely difficult and costly. Instead we have complete control and visibility of our temporary labour, and can efficiently manage our spend.
The management information we receive from de Poel, paired with having a dedicated account manager enables us to make decisions necessary to improve management of our sites and determine resources.
A key value add initiative which de Poel operates is their temp to perm conversion scheme. This programme has enabled us to take on nearly 600 staff on a permanent basis, which in turn has created new employment opportunities for existing temporary workers and significant savings for Biffa.
Richard Childs, Category Manager at Biffa Waste, November 2016
A success story
Since late 2014, outsourcing specialist de Poel has been working with North East Procurement Organisation (NEPO) – their first ever Public Sector client – to enhance their customers’ temporary labour provision.
Established in 1976, NEPO undertakes high-value procurement in major strategic areas of spend (such as construction, energy, facilities management and professional services) in partnership with North East local authorities and a range of associate members. All authorities rely heavily on temporary staff to keep services running smoothly – their partnership with NEPO is key to this and, in turn, NEPO’s partnership with de Poel.
As an intermediary sitting between NEPO and a panel of recruitment agencies, de Poel fulfils a wide range of skilled job categories for NEPO’s customers on a 24/7/365 basis, managing over 120 agency suppliers every day. The contract is delivered across 260 North East locations via a Neutral Vendor model.
In a demanding climate, the partnership has already delivered significant efficiencies and improvements, including:
- Cost savings of £1.23m – £230k above the original estimate
- Over £30m in spend – initial projected spend was £25m
- Greater visibility and control of agency spend, through real-time MI
- Captured ‘out of panel’ spend in areas where higher rates were being paid for contingent labour
- Almost 2,000 agency workers transacted per week – up from 1,100
- Access to a high volume, constant supply of quality staff
- Targeting new areas that NEPO was unable to previously, such as Social Care and Education
- Agencies now competing on quality rather than price through standard agreements
- Suppliers working in a transparent, ethical way and sharing NEPO’s values
- Supporting the local economy – in the initial 12-month period, 65% of revenue was within the local economy and 35% from national businesses, equating to £19,727,048 and £10,416,486 respectively
- Total compliance to legislation such as Agency Worker Regulations (AWR) and Modern Day Slave Labour, with a standard and parity safeguarding process in place throughout the entire supply chain
- A significant reduction in administration, with all framework authorities going from hundreds of invoices per week to just four per month
- A certainty that the right workforce will be in play at the right time – ultimately ensuring a positive service to all NEPO’s local authorities and associate members.
The target now is to grow the contract to a minimum of £40m in the next twelve months and continue to deliver savings to all authorities.
Due to the levels of service delivery and savings that have been delivered, a decision was made to extend the contract for a further two years. This serves as testament to a successful project between a neutral vendor outsourcing specialist and public sector organisation – and reinforces the business case for winning the NOA Professional Award for Excellence in Business Process Outsourcing.
“The success of the partnership so far is a direct reflection of the processes/systems de Poel has put in place, as well as the efforts Chris and the team have made to cater for each individual authority and their requirements. The team’s determination and enthusiasm for the contract to do well has been evident throughout.”
Adam Smith, Regional Procurement Officer
Emma Pallister, Regional Category Specialist – Professional Services
Find out more about NEPO.
Delivering significant cost savings
The relationship between de Poel and Sita UK, an innovative recycling and waste management business, has been in place since 2008, initially to utilise de Poel’s core strengths of standardising rates and delivering significant cost savings.
The implementation of AWR further strengthened the working relationship, as we ensured compliance with the legislation and maintained, developed and supported Sita’s ethical approach to AWR.
In line with the changing requirements of Sita’s business model, de Poel have adapted our model over the years to engage the management and resourcing functions of each business to support and guide the business to make decisions. The engagement of agencies as sole suppliers on some locations to give increased and improved service and supply is also a new addition to the support given and is part of the developing relationship.This is also highlighted in the implementation of standardised KPI reports being supplied from agencies to give the operational team the ability to highlight agency deficiencies and share best practice between sites.
Quarterly reviews are held with procurement to highlight success and new challenges. These reviews also give the opportunity to discuss significant initiatives such as targeted cost reduction programmes or education and support for new legislation or roll-out of policy changes within the business.
A challenge in the logistics space
de Poel began their collaborative partnership with this large logistics client back in 2008.
Based on the core de Poel model of cost savings, streamlined administration, visibility and control, compliance and continuous improvement, our client quickly began to see the benefits of working with an expert neutral vendor when managing their non-permanent labour.
When the Agency Workers Regulations (AWR) were introduced in October 2011, our client required an AWR-compliant solution that still achieved productivity, training and cost saving targets within the organisation.
Through an innovative partnership between de Poel, umbrella company Paraplus and our client’s supplying agencies, a custom made AWR solution was constructed to suit our client’s needs. This solution completely transformed their workforce model, helping the organisation to achieve:
- AWR compliance
- Cost savings through improved worker retention rates, reduced training costs and lower incident levels
- Protection of our client’s sustainable logistics policy
- The flexibility to meet seasonable workforce demands
- The ability to attract and retain the highest quality of workers
- Fair treatment for long-term, non-permanent employees in line with the permanent workforce
Organising structured and set performance reviews with our client’s supplying agencies, performance management has allowed de Poel and the supplying agencies to identify drivers that could be a potential risk to our client and ensure the effective management of any underperformers.
Workers that have been identified as high performers are offered a minimum 35-hour Swedish Derogation contract, which also entitles them to the benefits of Paraplus.
By collaborating with Paraplus umbrella company, our client improved their non-permanent workforce’s retention, worker morale, productivity and performance levels. Workers operating via Paraplus are entitled to:
- Maximised income, as each worker receives tax relief on their legitimately incurred expenses
- An employee benefits package including retail discounts, insurance cover and access to a 24-hour legal helpline
- Access to holiday pay, SSP and paternity/maternity when applicable
- An honest, compliant and transparent service, ensuring the worker understands exactly how their pay, tax contributions and expenses are being processed
- A dedicated Personal Adviser for advice and support
In the first two years of implementation, the strategic partnership between Paraplus, de Poel and our client has achieved impressive results including:
- £277,234 cumulative reduction on training and induction costs
- £28,885 cost savings on induction costs
- 57.3% improvement in retention rates
- 53.3% reduction in on site incidents
Our client has seen a transformation in their operations nationally, as non-permanent workforce retention, performance and productivity continues to increase. Through an improved worker retention rate of 57.3%, our client’s non-permanent workforce are now highly skilled, fully trained and as a result, more productive in their role.
Our client’s cost savings on worker training and inductions have also been significant, climbing in excess of over £277,000. With current employees becoming increasingly productive and staying with our client for longer periods of time, the need for new employees, along with the associated training costs, has been reduced.
Having highly trained and longer-term employees has also meant fewer incidents have taken place in the previous two years, reducing by almost 60%, resulting in a significant cost avoidance as each incident costs around £500. This has also provided legal mitigation for our client as well as improving staff morale and company reputation.
A representative from the company gave the following quote for this case study.
“Partnering with de Poel and Paraplus has helped us achieve a cost effective solution to the Agency Workers Regulations that’s delivered legislative compliance and allowed us to continue utilising contingent labour. The cost and operational impact of the AWR has been minimised, saving us time and improving workforce productivity, performance and retention.
“With their expertise and guidance, our temporary workers receive a fair, transparent and beneficial service, ensuring we have a highly motivated and competitive workforce.”
When de Poel partnered with a multi-channel retailer in 2011, the main objective was to operate with a preferred agency supplier list, enabling our client to standardise pay rates and introduce service agreements.
Under the first phase of the contract, our client needed a more streamlined recruitment process that ensured delivered quality staff, at a reduced cost on demand. There was also a focus on improving standards and reducing agency turnover, thus leading to greater productivity.
The second phase for our client was about ethical supply practices, continuous improvement and moving away from a simply transactional service, ensuring a full complement of engaged delivery staff to ensure all of our client’s supplier chain partners enjoyed not only a timely service, but of the best possible standard.
Initially, an extensive de Poel audit discovered that our client was using multiple recruitment agencies across their nationwide network, with candidates supplied of varying quality and cost. In addition to this, our client was also receiving multiple invoices each week across all locations, causing significant administration for their HR and Finance departments, especially when queries arose.
This audit discovery alone highlighted that the visibility, and therefore ability for our client to effectively manage their temporary agency labour across all their locations, was limited.
By working with de Poel, our client has discovered new opportunities and innovative ways of structuring their workforce, namely workforce modelling.
The benefits of the de Poel solution to both our client and their workers include the following;
- Cost savings and more control over forecasting temporary spend
- Visibility and control of spend at all levels, by job category or location
- Ability to monitor agency performance and improve service levels
- The retention of agency relationships at a local level
- Highly efficient processing of invoices and timesheets
- Ongoing risk mitigation
- Ongoing agency management
In the first year of implementation, our client received the following results;
- Cost savings of over £2.4m delivered on annual temporary agency spend
- Preferred agency panel operating with our clients standard terms and conditions, including fixed pay and agency margin rates
- 70% of existing agencies joined the new panel
- Service agreements in place with KPIs to monitor agency performance
- Reduction of multiple invoices to 3 per week with 100% invoice accuracy
- Real-time management information available
- 100% compliance across all of our clients locations
- A smooth implementation which resulted in very little disruption to the business
A representative from the company gave the following quote for this case study:
“The market review of our temporary labour workforce has been an important project for us to undertake. The neutral insight that de Poel provided as part of the process was invaluable. The temporary labour workforce is integral to our operations and will continue to be a driver to our future success. By working with de Poel we have effective management of our temporary labour, as well as the supplying agencies. We are able to consistently deliver the services required by our internal stakeholders. Our approach to continually improvement ensures we add value to the relationship but also that we achieve significant savings.”
Since renewing contracts with our client in February for an additional two years, we have continued to see further successes. Projects currently being delivered will result in a noticeable reduction in churn levels among the sites, with a projected annual saving in excess of £500,000.
Operating with multiple agencies can often result in little visibility and control over pay rates and agency margins, making budget forecasting incredibly difficult within the construction industry. Equally frustrating for construction companies is the uncertainty of agency legislative compliance, which is of paramount importance with the government’s crackdown on immigration and also the introduction of Agency Workers Regulations.
This leading construction and engineering company in the UK identified the opportunity to improve visibility and control in order to forecast accurately and, more importantly, to ensure equality for all temporary agency workers by standardising pay rates.
Our client realised the necessity of working with a neutral vendor who operated independently from recruitment agencies in order to provide a level playing field for all agencies and temporary agency workers.
While cost saving was hugely important to our client, they also had the foresight to understand the extra benefits that a web-based invoice system could bring to their business, providing visibility and control that could assist them in future planning and compliance with the Agency Workers Regulations.
de Poel began to analyse all our client’s invoices to gather information on the current pay rates and agency spend. The process highlighted a lack of consistency over agency rates and supplier margins. Agencies were operating under their own terms and conditions, with no clarity of charges. From the analysis, de Poel was able to report the following:
- The different site rates and spend summary per site, along with the composite rate structure
- Pricing summary, comparing current pay rates with de Poel’s recommendations
- Savings overviews that highlighted the savings per location with an annual projected spend and savings report
de Poel introduced a managed panel of agency suppliers, including existing and new agencies, working to formal key performance indicators to improve consistency and quality of supply. After analysing an initial 31 sites, our client agreed to the roll-out of e-tips® across these sites and selected agency branches with training conducted by de Poel’s Support Services team.
This partnership with de Poel has brought in cost savings of between 8-10%, depending on the location and on our client’s temporary agency labour spend per site. This has been achieved through a standard pay rate where the margins reflect the quality of temporary workers delivered. Formal Service Level Agreements with Key Performance Indicators helped our client establish consistency, mitigate legal exposure and improve the quality of their workers.
The implementation of e-tips® has provided our client with a clear picture of their agency spend and given them more central control of their costs. Since the original implementation across 31 of their sites, our client has expanded this out so it is now in operation at 64 locations. Our reporting tools remain extremely valuable in allowing their Head Office to monitor and control spending activities and project patterns, allowing them to forecast accurately for new contracts, which is hugely beneficial to their tender process.
With e-tips® being a web-based tool, invoices have been reduced from 5,000 a week down to just one, due to the conversion of paper-based documents to electronic files, thus saving an estimated one tree for every 5,000 invoices processed, further helping to meet their environmental policy.
de Poel’s dedicated Account Management Team is committed to working closely with our client to ensure continuous improvement to their business.
An increased level work has gone into our client’s auditing process including a bespoke suite of reports which give increased amounts of visibility across their entire supply chain.
Weekly MI reports are sent out to each of our client’s divisional managing directors and senior management teams highlighting the number of workers, total hours, cost and reasons behind each spend, as well as a timesheet approval. For our client this added control has been integral to the running of their national operations.
A representative from the company gave the following quote for this case study.
“The implementation of e-tips® has completely revolutionised the way we can view our temporary agency labour. We now have a trusted panel of agencies and standardised rates which as significantly reduced our overall spend in this area.
“Reducing the levels of invoices from 5,000 to just one across the board has substantially improved the productivity of other areas of our business, so it has been multi-beneficial. I particularly enjoy the ease with which I can quickly analyse information in real time, which means I can now plan future projects with knowledge of how many hours are being dedicated to different size projects.
“We have been delighted with de Poel. Their expertise and knowledge of the temporary labour market provides us with peace of mind regarding legislative compliance.”
Solving challenges in manufacturing
de Poel partnered with this UK-based manufacturer in October 2013. Their key objectives were to increase the visibility and control within their supply chain. Our client sought to achieve a clearer understanding of their temporary workforce and by working with de Poel wanted a highly effective strategy to better inform their decisions on both current and future staffing demands.
Prior to working with de Poel, our client was sourcing temporary workers from 37 agencies and paying 115 invoices each week. This process needed to be streamlined in order for our client to get the maximum results from their suppliers and for their business as a whole.
In the first 18 months of working with our client, de Poel analysed their complete supply chain to better understand the levels of service each site was receiving plus any potential compliance risks.
With issues such as a national driver shortage and an ageing workforce facing the industry, the challenge for de Poel was to source temporary labour for our client both in terms of volume and quality.
de Poel has worked closely with our client over the past two years to implement a new panel of suppliers to ensure volume and difficult vacancies are all filled. de Poel ensures the supply of 120 temporary workers on average per week, across 19 of our client’s sites, 90% of which are LGV drivers. This is despite implementing a reduction in the number of agency suppliers by 27%, an operational shift that has resulted in a much more streamlined process for the entire company.
By using de Poel’s web-based electronic timesheet and invoice processing system e-tips®, our client has a complete view of their supply chain and access to previously unattainable levels of transparency, visibility, control and compliance. The visibility we have given our client mitigates risk and gives each site manager confidence and assurance that their contingent labour is compliant and adhering to all temporary worker legislations.
In 2014, de Poel worked in conjunction with our client on a vital project to implement compliance with the Driver Certificate of Professional Competence (Driver CPC). This qualification was introduced across Europe to improve road safety and help maintain a high standard of driving. Enforced by the government, businesses which didn’t adhere to hiring drivers with this certificate were told they would face thousands of pounds worth of fines.
de Poel’s Account Management Team worked tirelessly to ensure that all of our client’s drivers hired were compliant and had the correct documentation to meet this regulation. The project was run with the absolute minimal disruption to the business and allowed our client to continue operating as usual.
In summary, by using a neutral vendor framework, our client now has the benefits of real-time visibility across their organisation. Each site is aligned and the business receives bespoke reporting from de Poel’s Account Management Team which allows our client to forecast and budget more effectively. In addition to increasing visibility and control for our client, de Poel’s cost-saving framework has also saved the company between 1-2% on annual agency labour spend.
Two years after implementing our neutral vendor framework, the processes that have been put in place allow our client to have complete confidence in the running of their temporary labour supply chain.
de Poel is now working closely with our client to give continued added value while also being committed to monitoring and evaluating compliance.