West Midlands Centre of Excellence

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West Midlands Centre of Excellence
Agency Temporary Staff Best Practice
Event 19th June 2007
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West Midlands Centre of Excellence
Introduction Welcome Jonathan Jones Regional
Procurement Manager
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The RCE Procurement Programme
Nicol Thornton Assistant Director
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Agency Staff The National Picture

• Christine Morton, Category Manager, Temporary
  Labour

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Public Sector Expenditureof Agency Staff

• 3.927 billion spent annually
• 973 million in healthcare
• 375 million in central government
• and
• 2.2 billion in local government

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Temporary Staff Master Category
Temporary Staff
IT Temporary Staff
Nursing and Medical
Admin Clerical
Blue Collar
Specialist Contractors
Interim Managers
Social Care
Supply Teachers
Interims Project Mgrs Procurement Specialists HR
Specialists, etc
Drivers Catering Hotel Messengers Cleaners Warehou
se Stores etc Refuse Street cleaning
Clerical Admin Asstts Secretary Sr
Secretary Executive Sr Executive Receptionists
Programmer Analysts Help desk Maintenance etc
Supply- Teachers
GPs Locums Nurses
Health Care Pharmacist Scientific Therapeutic Tec
hnical
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Temporary Staff Central Govt.
Temporary Staff
IT Temporary Staff
Nursing and Medical
Admin Clerical
Blue Collar
Specialist Contractors
Interim Managers
Social Care
Supply Teachers
Interims Project Mgrs Procurement Specialists HR
Specialists, etc
Drivers Catering Hotel Messengers Cleaners Warehou
se Stores etc Refuse Street cleaning
Clerical Admin Asstts Secretary Sr
Secretary Executive Sr Executive Receptionists
Programmer Analysts Help desk Maintenance etc
Supply- Teachers
GPs Locums Nurses
Health Care Pharmacist Scientific Therapeutic Tec
hnical
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Temporary Staff Local Govt.
Temporary Staff
IT Temporary Staff
Nursing and Medical
Admin Clerical
Blue Collar
Specialist Contractors
Interim Managers
Social Care
Supply Teachers
Interims Project Mgrs Procurement Specialists HR
Specialists, etc
Drivers Catering Hotel Messengers Cleaners Warehou
se Stores etc Refuse Street cleaning
Clerical Admin Asstts Secretary Sr
Secretary Executive Sr Executive Receptionists
Programmer Analysts Help desk Maintenance etc
Supply- Teachers
GPs Locums Nurses
Health Care Pharmacist Scientific Therapeutic Tec
hnical
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What are the Procurement Issues?

• Reducing commissions
• Reducing off-contract spend
• One point of contact / corporate process
• Accurate charges
• Clearer terms and conditions
• Support for SMEs / BMEs
• VISIBILITY

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What affects Human Resources?

• Headcounts and workforce planning
• Two-tier workforce
• Length of time in post
• Difficulty in recruiting permanently
• Few formal policies
• Equalities Diversity
• Community Priorities
• VISIBILITY

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What do Line Managers want?

• Quality
• Value for Money
• Timely
• Less Bureaucracy
• Priority Service Delivery

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What are the Legal Concerns?

• Case Law
• When are agency workers considered de facto
  employees?
• If so
• Employment Claims
• Unfair dismissal
• Redundancy
• Minimum notice
• Benefits Pensions
• Discrimination Claims
• Class Actions
• Tax
• Health Safety

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External Influences

• Unions
• Council spending on temporary and agency staff
  generally represents very bad value for money
  for the public.
• GMB union June 2006
• Agencies
• many people chose temporary instead of
  permanent work because it suits their lifestyle
  and because it offers them flexibility, choice,
  and autonomy.
• - REC June 2006

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Taking Control

• The LCoE/Havering project recommended that
• Every council choose one of the four models of
  managed services to gain control and visibility
  over agency staff expenditure
• Every council review its human resources policies
  and give guidance to managers to engage agency
  workers
• The OGC supports these recommendations for
  high-spending local authorities

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Findings from the LCoE / Havering Project

• Current spend 500 million
• Headcounts can be as high as 25 of the workforce
• 40 of spend in social care.
• No rate comparisons
• Average length of time in post
• Lack of temp-to-perm guidance
• Few formal policies
• Two-tier workforce

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Findings from the LCoE / Havering Project

• Staff gazumping in tight labour markets
• Human Resources has been largely uninvolved in
  agency staff
• Difficulty in recruiting permanent staff
• Equalities and Diversity
• Community Priorities
• Latest legal advice was not widely known.

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National Toolkit Usage

• Local authorities
• Regional Centres of Excellence
• Employers Organisations / IDeA
• RCE Procurement Programme

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National Toolkit Usage
NE RCE NEPO
Durham / Sunderland
YH RCE
Bradford Leeds
NW RCE AGMA
ESPO EM RCE
Wirral
Birmingham
Essex
London
Wales
SE RCE
Slough
Wealden
N. Somerset
Dorset
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(No Transcript)
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Contracting Options

• Christine Morton, Category Manager, Temporary
  Labour

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Milestones
6.6 SAVING

• Short Term (Quick Wins) Strategy
• Reduce commissions, NI and WTR
• Medium Term Strategy
• Implement a managed service and usage policy
• Long Term Strategy
• Institute workforce planning with
• demand management

15 SAVING
30-50 SAVING
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Quick Wins Strategy

• Agree with existing suppliers
• Accurate NI
• Accurate WTR
• Reduced Commission
• Internal buy-in to wider strategy
• External message to market

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Temporary Staff Invoice
Commission
NI
12.8 above 100/week
8.33
WTR
Worker Pay Rate
WILL move to 10.17 Oct 07 and 12.07 Apr 09
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Analysis

• List Existing Agencies, Contact Details, Spend
• Existing Workers
• Role Covered Reason
• Pay Rate Charges (NI, WTR)
• Comparison to other Agency Workers
• Comparison to Permanent Employees
• Length of time in Post
• Analysis of Risk
• BASELINE for Gershon

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Toolkit

• Reasons for and risks associated with agency
  staff
• Information on how to achieve savings, both
  cashable and non-cashable, including a
  self-assessment test to help choose the best
  managed service and case studies
• Best-practice policy guidelines

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Managed Services

• A managed service provides
• One point of contact
• Structured information and reporting
• Market Intelligence
• Negotiation with agencies to obtain better rates
  of commission
• Compliance
• Accuracy of all charges
• Audits of agencies
• Handling of all invoicing to the council
• Tiering agencies
• Management of the temporary workforce

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Vendor Neutral Managed Service
Local Authority
Vendor Neutral Managed Service (does not supply
staff of its own accord)
JobCentre Plus
Tier 1 Agency
Tier 1 Agency
Tier 2 Agency
Tier 2 Agency
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Master Vendor Managed Service
Local Authority
Tier 1 Agency
Master Vendor Managed Service (also supplies
staff directly)
Tier 2 Agency
Tier 2 Agency
Tier 1 Agency
JobCentre Plus
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Internal Managed Service
Local Authority
Internal Managed Service (Part of the Authority)
Tier 1 Agency
Tier 1 Agency
JobCentre Plus
Tier 2 Agency
Tier 2 Agency
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Partially Outsourced Human Resources Managed
Service
Local Authority
Agency Worker Recruitment (Master Vendor)
Permanent Employee Recruitment
Tier 1 Agency
JobCentre Plus
Tier 2 Agency
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Managed Service Checklist

• Tiering
• KPIs
• Technology Enablement
• Payment Options
• Other Drivers
• Regeneration, Equalities and Diversity
• Levels of Insurance, Audits, Hours/Location
• End of Contract Procedures

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Tiering

• Rank agencies by performance
• All agencies subject to tiering
• Better performing agencies get vacancies earlier
  ? scorecard needed
• Tier timing definition
• Incentivisation - movement from one tier to
  another throughout contract - process needed to
  add new agencies
• Existing agencies need to be included

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Key Performance Indicators

• Needed for managed service
• Overall fill rate
• Savings targets
• Time to respond to vacancies
• System Downtime, etc.
• Needed for agencies
• Balanced scorecard approach

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Key Performance Indicators
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Technology Enablement

• Ordering, Timesheet and Invoice Processing
• Management information
• Interfaces
• Data Ownership
• Data Protection Act
• Process

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Payment Options

• Flat Fee
• Transactional
• Shared savings

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Flat fee

• Easy to calculate
• Easy to evaluate tenders
• Cheaper per worker if agency staff spend level
  increases
• but
• Is not incentivised for savings
• Expensive per worker if agency staff spend level
  decreases

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Transactional

• Easy to calculate
• Easy to evaluate tenders
• Total paid fluctuates on level of business
• but
• Is not incentivised for savings

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Shared savings

• Is incentivised for savings
• but
• May be difficult to calculate baseline for
  savings
• May give away too much of the savings
• Need to identify what further savings potential
  at the end of the contract for the next period

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Other DriversRegeneration, Equalities
Diversity

• Are there regeneration areas? How can they be
  targeted?
• Location of the managed service?
• Use of Job Centre Plus?
• Analysis of temporary workforce
• Equality
• Diversity
• Develop strategies to ensure that equalities and
  diversity policies are in use by both the managed
  service and the agencies

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Insurance, Audits Hours/Location

• Insurance needs to be held by both the managed
  service and the agencies
• Toolkit has further explanation of potential
  incidents and who can insure them
• Frequency and nature of audits within the
  agencies
• Location of the managed service office within
  each local authority, or virtual?
• Service hours?

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End of Contract Procedures

• Transfer of Data to new provider
• New interfaces?
• Should next contract have different payment
  structure and KPIs?
• Communications Plans

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The Worcestershire Solution
Bridget Clark Worcestershire County Council
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The Coventry Solution
Carol Jones Kristian Smith Coventry City
Council
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The Herefordshire Solution
Sheila Thompson Herefordshire County Council
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Interactive Discussion
Are we in control of our agency staff usage? If
not, what can be done about it?
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(No Transcript)
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Agency Staff Beyond the Contract

• Christine Morton, Category Manager, Temporary
  Labour

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Beyond the Contract

• Existing Agency Workers
• Agency Worker Policy
• Pay Parity
• Gershon reporting
• JobCentre Plus
• Communications and Training Plans
• Enforcing Use by Managers

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Existing Agency Workers

• No Changes to their Pay Rate
• Changes to Timesheet Processing
• Potential to become Permanent if been in post too
  long analysis of risk needed
• In Post Time Limits

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Agency Worker Policy

• Runs alongside contract
• Needs to show
• Who managers can order from (one point of
  contact)
• What workers can be paid
• Where to go for help and support
• When its appropriate to get a temp in
• Why the new policy exists
• How long the workers can stay in post
• Special circumstances (e.g. short-notice posts)

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Pay Parity

• Pay parity linking agency worker pay rates to
  permanent pay scales
• Why?
• Clearer (fairer?) pay and charge rates
• Better links with union
• Why not?
• Might need to be flexible to pay more or less
  according to market conditions

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Gershon Reporting

• Report Cashable and Non Cashable Gains from
  Baseline
• Cashable
• Reduction in margin
• Reduction in inaccurate fees
• Reduction in demand (without affecting service
  quality)
• Non Cashable
• Use of Toolkit!
• Ordering Process
• Avoiding tendering process

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JobCentre Plus

• Local candidates
• Regeneration links
• Training courses and job fairs
• But
• Can be target-oriented
• Cannot payroll workers
• Investigate whether your council can work
  together with JobCentre Plus

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Communications Training Plans
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Enforcing Use by Managers

• Communication, Communication, Communication
• Strong Arm by Finance
• Policy

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Long Term Strategy

• View Agency Staff as part of the Pay and
  Workforce Strategy
• Ensure appropriate incentives between temporary
  and permanent work
• Reduce long-term usage
• Target recruitment pinch-points and high volume
  temp usage proactively
• Consider regional implications

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Case Studies Coming!

• Experience from other local authorities
• What worked!
• What didnt!
• How-to Checklist

30 50 SAVINGS
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How can the OGC help you?

• Share best practice / experiences
• Assist in baselining
• Review strategies and make suggestions
• Look for collaborative partners / deals

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Collaborative Deal AvailableESPO
Lisa Tutt Steve Burton ESPO Vendor Neutral
deal with Comensura
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(No Transcript)
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Interactive Discussion

• How must HR and Procurement work together?
• Long term agency workers?
• Regional collaboration what can and what should
  be done?
• Data sharing?

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Conclusion Finding a regional way forward
Jonathan Jones Regional Procurement Manager West
Midlands Centre of Excellence
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Contact us

• OGC works with public sector organisations to
  help them improve their efficiency, gain better
  value for money from their commercial activities
  and deliver improved success from programmes and
  projects. Our priorities are to support the
  delivery of
• the public sectors 20bn annual efficiency gains
  by 2007/08
• 3bn saving by 2007/08 in central Government
  procurement
• improvement in the success rate of mission
  critical projects.
• email tempstaff_at_ogc.gsi.gov.uk
• 0845 000 4999 www.ogc.gov.uk