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Human Resources Outsourcing saves you money by:-

  • Reducing headcount and administration costs
  • Negating ongoing investment in HR systems
  • Avoiding costly employment tribunals
  • Motivating employees and reducing wasted resources

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Option C People Project Management

Case Study

Company C are a traditional engineering business based in the North West. Previously they employed up to 500 employees. They found themselves in an increasingly competitive environment where they were under enormous margin pressure from new entrants from the Far East. Overheads in terms of headcount were fixed and ultimately they were looking for a way forward which allowed them to retain a skilled labour force but ensure maximum operating efficiencies.

Potential Issues

  1. Required retention of skills without fixed costs.
  2. If cost base remained fixed ultimately they would lose client base to international competitors.
  3. HR were being integrated into a more strategic role in the business.
  4. No headcount cost for gap created in transaction/recruitment procedures.
  5. Quality was a major driver for customers so continual improvement system had to be adhered to across all workers.

People Project Management Solution

  1. Dedicated consultant reviewed with HR team, production team and financial team future potential requirements.
  2. Job descriptions and people profile created to ensure calibre/fit of candidates.
  3. Production planning schedules matched to core permanent workforce and temporary flexible workforce to allow for forward planning.
  4. On going labour management of contingent workforce.
  5. Partnership approach to continuous improvement led to increased efficiencies for plant with demonstrable cost savings.

 

Comparison of Costs per Annum

Fixed Overheads   People Partners
Basic £17,294.00 Basic (38hrsx£9.62x48 wks) £17,546.88
Shift £2,114.00 Shift Included £0
Gross Pay £19,408.00 Gross Pay £17,546.88
Pension & NI (@20%) £3,881.60 Additional 5 Bank Hols @ Cost £229.68
Total Cost £23,289.60 Total Cost £17,776.56
Variance £5,513.04
Cost of 13 days extra holidays £1,164.48 (£23,289.60/52 = £447.88 per week)
(Loss of production value) (£447.88 x 2.6 weeks = £1,164.48)
Cost of Absenteeism @ 10% £2,328.96 (£23,289.60 x 10% = £2,328.96)
Cost of Absenteeism @ 15% £3,493.44 (£23,289.60 x 15% = £3,493.44)
Cost of Worker with Additional Holidays with 15% absenteeism £27,947.52

 

Variance per employee £9,006.48
Variance total flexible workforce £9006.48 * 30 £270,194.40
Annual cost saving £270,194.40
     
Cost saving over 4 year partnership   £1,080,777.60

 

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