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.

The challenge

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.

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.

The solution

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.

We 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, we were 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 our recommendations
  • Savings overviews that highlighted the savings per location with an annual projected spend and savings report

We 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 our team.

This partnership 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.

Next steps

Our dedicated Contract & Performance 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. Their expertise and knowledge of the temporary labour market provides us with peace of mind regarding legislative compliance."

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