Birmingham takes control of Temporary Recruitment

Birmingham City Council needed to balance better control and management of their agency workers with reducing operating costs.

To do this, and to also address current and future legislation, they chose a proven solution: 360 Agency Gateway.

Background

Birmingham City Council relies heavily on over 1,000 agency workers to help a large, full-time, permanent team. Legislation, including Agency Workers Regulations (AWR) together with significant spending cuts led to the search for a more efficient and cost-effective way to use supplementary staff.

The new regulations carried an instant 30% rise in the wage bill (c£4m) and a rising threat from redundant employees claiming unfair dismissal, with a potential litigation risk of up to £72k per claim. Simply continuing ‘business as usual’ was not an option.

With approximately 1,500 redundancies, the potential financial risk was enormous - conservatively estimated at £10 million. While offering agency workers a better deal through AWR was not a problem for Birmingham City Council, there was an urgent need to find efficiencies, to mitigate against the risks and to ensure compliance.

The Council HR department established a task force comprised of representatives from finance, procurement and accounts. They contracted supplier agencies to audit the management of the agency workforce processes and identify opportunities for permanent staff at risk of redundancy.

It quickly became very clear that the system was outmoded and uncontrolled, with some managers in breach of procurement regulations. In addition, information captured centrally was limited and unreliable.

There was a clear need for central management and the task force determined that a technological solution would be the most efficient and cost-effective method for change.

Solution

360 Systems had a proven web-based software solution for the procurement and management of agency contract and permanent staff. It was 360 Agency Gateway.

Designed by 360 Systems to help clients to control and minimise their costs the system was modified to manage the Birmingham City Council’s legislative responsibilities. It easily handled reporting and automatically applying pay uplifts. Improved reporting has enabled Birmingham City Council to capture opportunities for staff ‘at risk’ of redundancy and provide comprehensive and consolidated management information to management teams.

Result

Nine months after the launch and Birmingham City Council has saved over £2 million. What makes this so impressive is that the initial investment was only £42,000 for a 7 month pilot where the new approach was given an opportunity to prove its worth to the business. Following the pilot the system is still providing a cost effective solution. Now, with an annual licensing, hosting and support cost of c£60,000 this gives Birmingham City Council an excellent return of £19 for every pound invested.

The solution has not only successfully delivered against the original objectives within the set deadlines but has exceeded expectations with additional savings for the authority notes Sue Wait of Birmingham City Council.

Sue continues:

360 Agency Gateway reduced the cost of using agency workers to outstrip initial projected savings of £1.6 million. This has been achieved in a variety of ways. With 20 staff ‘at risk’ of redundancy being placed into posts previously carried out by agency staff, saving £660,000 against a typical redundancy cost of £33,000. The solution also helped to improve consistency in pay rates and also ensure better alignment of pay with market rates, saving just under £1 million pa. The use of Pay Between Assignment Contracts has saved a further £2 million pa and the capping workers hours to 35 c£1 million pa

The risk of litigation has been reduced with customised reporting that facilitated a council-wide review of existing agency workers. This led to c200 different opportunities, many of which were multiple posts, being been made available to staff facing redundancy, reducing the risk of litigation - at potentially £72,000 per case this avoided a cost of up to a massive £18.5 million.

360 Agency Gateway also helped prepare the Council to address current and future legislation, including the AWR, with no dispute claims regarding rights being successful pursued, to date. It has improved the recruitment processes with requests for hiring and subsequent time sheeting being tracked in real time and approved agencies given access to the system to create healthy competition for the business. The ability for the system to tier requests to the most cost effective agency has also helped to drive down costs.

Highlights

Birmingham City Council objectives:

• To mitigate against the risk of litigation from redundant staff
• To enable better provision of MI
• To prepare the organisation for legislative obligations, including AWR.
• To meet continuing budget cuts in HR.

360 Agency Gateway delivered:

• A streamlined ordering, hiring and time sheeting system.
• A more efficient electronic approval system for managers to sign off timesheets.
• Improved compliance against, and policing of, contract frameworks and SLAs with agencies.
• Better visibility of agency usage and spend across the organisation.
• The ability to calculate the 12 weeks qualifying period for workers, under the AWR.
• Better management of agency SLAs and identification of under-performing agencies.