Process of Staffing Contract with Recruitment Agency - PDF

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					SHOWCASING GOOD
PRACTICE




                                                                                                  PROCUREMENT



Procurement of a Vendor Neutral
Temporary Staffing Solution
Summary

In 2006 a group of 14 local authorities in the East        It is estimated that the combined spend of the initial
Midlands formed a collaborative partnership to procure     group of authorities who elected to participate in the
a temporary staffing solution.                             contract is in the region of £4million per annum.

The authorities sought to minimise the effort and time     To date, three authorities have implemented the new
involved in the procurement of temporary staff, whilst     arrangements, with another seven to follow in June,
also maximising the potential service delivery options     July and August 07. The remainder will follow
and cost savings by aggregating demand and                 thereafter. Early indications show direct (cashable)
introducing some common processes. The solution            savings of between 5% – 7% of temporary staffing
also had to meet their diverse staffing requirements and   spend being achieved. Indirect (non-cashable) savings
deliver service improvements and efficiency savings.       of approximately 6% are also on target, delivering
                                                           combined savings of approximately 11% of total
ESPO was engaged to assist the authorities in the          temporary staffing spend.
procurement process, with input and support provided
by the East Midlands Centre of Excellence. The
contract will support the Gershon agenda by
contributing towards a wide range of cashable and
non cashable efficiency savings.



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This contract is open to other eligible UK public sector      requirement at the same time and have equal chance
bodies and since the contract has gone live, there has        to submit suitable candidates. The performance of the
been confirmed interest from a further six Authorities in     agencies participating in this process will be closely
the Midlands. With increased participation this contract      monitored and scored against pre-determined criteria
has the potential to generate millions of pounds of           and after 3 months a tiered supplier list will develop.
efficiency savings nationally.
                                                              Subsequent temporary worker requirements will be
                                                              communicated tier by tier, with those suppliers placed
                                                              higher in the tiers being given the chance to fill the post
Project background

With the assistance of the EMCE the participating             before it is communicated further down the supply
authorities appraised a range of service delivery             chain. Agencies are incentivised to meet quality and
options. Choosing the right contract was essential if the     cost criteria in order to protect their place in the tiers
partnership were to fully exploit potential service           and secure the greatest opportunity to provide
improvements and efficiency savings. It was concluded         temporary workers to the Council.
that a model based upon a Vendor Neutral approach
was most likely to deliver these benefits whilst ensuring
adequate geographic and skill set coverage.
                                                              Benefits to the Councils

                                                              Councils using the contract are expected to achieve
The Vendor Neutral Service Model                              the following benefits:
                                                                  Cost savings (Cashable and Non Cashable)
In the context of a temporary staffing solution a Vendor
                                                                  Improvements to the recruitment process,
Neutral managed service provider sits between the
                                                                  including improved efficiency
Council and the agencies that it uses to manage its
temporary worker requirements, effectively providing a            Improved compliance with legislative and policy
single point of contact for all hiring managers whatever          requirements
their temporary worker need. The managed service                  Improved accuracy in the provision of management
provider is not only responsible for handling and                 information.
communicating temporary staffing requirements, but
also managing and reporting back on agency
performance. They will collect and analyse usage and
                                                                 Lower agency worker rates and overall spend
                                                              Cashable savings will include the following:
spend data in order to provide management information
                                                                 achieved through:
to the Council.
                                                                 1. Improved supplier relationships leading to lower
Under the Vendor Neutral model of service delivery, the               agency margins
managed service provider will not provide temporary              2. Regular benchmarking of rates by the managed
workers directly. Instead, suppliers (vendors) of                     service provider
temporary workers engage with the managed service                3. Standardisation and correct application of
provider to become an approved supplier to the                        overtime payments and statutory contributions
Council. Those meeting the managed service                            (such as NI, Working Time Directive) by the
providersʼ minimum standards in terms of business                     agencies
suitability will be able to compete equally against others       4. Clarity of terms, e.g. in respect of ʻtemp to
in the locality to supply temporary workers to Council                permʼ fees which become standardised
departments, irrespective of their size or reputation.           A reduction/elimination of unapproved spend by
                                                                 hiring managers through the application of tighter
All existing suppliers of temporary staff to the councils        controls and improved channels of communication.
were invited to participate in the new arrangements,
thereafter; all parties interested in supplying to the
Council will be referred directly to the managed service      Key improvements to the recruitment process will
                                                              Improvements to the recruitment process

provider. The vendor neutral model encourages                 include:
participation by the local supply base including SMEs             A single point of contact for the provision of all
and BMEs, and if required can interface with Job                  types of temporary worker
Centre Plus, therefore helping to support any
                                                                  Availability of the service 24 hours a day, 7 days a
regeneration and sustainability initiatives that may exist.
                                                                  week, 365 days a year
The managed service provider uses a web-based                     Streamlining of the ordering process through the
electronic system to communicate temporary staffing               use of a web-based electronic tool - backed up with
requirements to the Councilʼs list of potential suppliers,        a telephone ordering service
providing access to e-Procurement in line with                    Pre-screening of CVs to remove unsuitable
Communities and Local Government recommendations.                 candidates
All approved suppliers will receive notification of the


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Improved supplier compliance with legislative and
policy requirements
                                                           Selecting a supplier

The managed service provider will work with the            A voluntary OJEU notice inviting expressions of interest
Council and agencies to manage risk and liability issues   from suitably experienced organisations was placed in
more effectively and pro-actively by:                      May 2006. 35 tenders were sent out to prospective
    Ensuring that all agencies meet minimum                bidders, with a total of 9 bids returned. A detailed and
    requirements in terms of insurances and legislative    thorough evaluation of the bids was completed by a
    requirements                                           panel comprising officers of 5 of the participating
    Requiring agencies to sign up to contracts with the    Councils and ESPO resulting in a shortlist of two
    managed service provider that mirror the terms         potential providers.
    agreed with the Council.
    Monitoring the agencies performance against            Both firms were invited to make a presentation to the
                                                           panel and officers from the participating authorities. A
    contract and Council policy requirements.
                                                           decision over the contract award was not forthcoming
    Auditing the agencies compliance with contract and     until a best and final offer process had been completed.
    legislative requirements on both a scheduled and       The final decision of the panel was to recommend the
    ad-hoc basis                                           award of the contract to Comensura on account of their
    Preventing agencies and candidates that fail to        bid meeting most closely with the requirements of the
    meet requirements from supplying/ being placed         specification, backed up by the firmʼs strong track
    with the participating authority in future             record of managing similar contracts for other Local
    Monitoring and where necessary restricting the         Authority clients.
    longevity of temporary placements.

Improved accuracy in the provision of management
                                                           The Comensura Offer

information                                                TThe service will operate on the basis of agencies
The managed service provider is responsible for            invoicing Comensura for payment, and Comensura
compiling all management information relating to           providing the Council with a single weekly invoice for all
temporary worker usage and agency performance. This        temporary workers procured.
will enable:
     More intelligent and effective workforce planning     Comensura will recover their costs partly by
     through data and trend analysis                       transactional fee, fixed for the duration of the contract,
                                                           and partly by profit (gain) share. The gain share
     Assistance with the calculation of savings for
                                                           element is to incentivise Comensura to negotiate
     Gershon reporting                                     reductions in margins from the supplying agencies on
     Improved diversity and ethnicity monitoring           behalf of the Council.
   Assessment of contract performance in relation to
   sustainability issues.                                  This will work as follows:

Non – cashable savings will be delivered through               Comensura will apply an agreed charge to all
the following:                                                 temporary worker bookings that they arrange on
    A single point of contact for all temporary worker         behalf of the Council.
    requirements                                               Comensura guarantee to save the Councils using
    1. Less officer time spent on the telephone                the contract a minimum of 2% on their current
        sourcing agencies                                      temporary worker spend.
    2. Less officer time spent on the phone handling           Should Comensura save more than 5% of current
        ʻcold callsʼ from agencies.                            total annual temporary worker spend, savings over
    The automation of the temporary worker ordering,           that amount will be subject to a ʻgain shareʼ
    time-sheeting and invoice process, including               between Comensura and the Council.
    1. The use of on-line ordering systems                     Any gain share due to Comensura will be paid at
    2. Pre-screening of candidates by the system/ and          the point of ordering a temporary worker (i.e. any
        or the managed service provider                        gain share payment due to Comensura will be
    3. A reduction in the use of paper timesheets              added to the total charge payable for a temporary
    4. The introduction of a single consolidated               worker).
        weekly invoice for the participating authority,
        backed up by details of departmental spend         A methodology has been agreed for calculating the
        and other management information.                  baseline against which savings will be determined: In
    5. Better informed decision making through             simple terms, a data gathering exercise conducted
        improved availability and accuracy of              jointly by Comensura, the Council and existing
        management information.                            suppliers will provide a picture of the current temporary
                                                           worker rates paid by the authority.
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Comensura will analyse the current rates and calculate       ESPO will maintain overall responsibility for the contract
the existing mark up paid by the Council for each skill      and shall access all management information for the
set of temporary worker. This will include the agency        purposes of managing the contract. Participating
margin, NI and Working Time Directive contributions          Councils will be responsible for holding their own
(the rate of pay due to the temporary worker is              regular contract reviews with the service provider and
excluded from the calculation of savings).                   managing locally any performance issues or
                                                             improvement actions.
As part of the new contract, Comensura will work to
reduce the mark up for each skill set by negotiating         Repeated instances of non-conformance or poor
better rates from the agencies, and ensuring the correct     performance can be escalated to ESPO who will aim to
application of NI and WTD contributions. Their booking       resolve such issues with the service provider on behalf
fee will be taken into account and included into the         of the Council. The overall performance of the service
overall post-contract mark up.                               provider against contract requirements will form the
                                                             basis of an overarching contract review between ESPO,
The difference between the pre-contract mark up and          the participating Councils and the service provider, to
the post-contract mark up will effectively become the        be held annually.
ʼsavingsʼ.
                                                             For information on how to join the contract contact
Contract details and implementation requirements             Lisa Tutt at ESPO.

The contract for the Vendor Neutral Temporary Staffing
Solution commenced on 1st January 2007, for an initial
                                                             Collaborative partners (to date):

3 year term, with the potential to extend the contract for   Bassetlaw District Council
a further 2 years.                                           Boston Borough Council
                                                             City of Lincoln Council (Implemented)
Those wishing to use the contract will be required to        East Lindsey District Council
sign up to the terms of the contract which have been         Erewash Borough Council
agreed as part of the procurement process.                   Harborough District Council
                                                             Lincolnshire County Council (Implemented)
Comensura can implement the system as required, with         Mansfield District Council
processes based around local authority procurement           Melton Borough Council
objectives, systems and culture. The average                 South Kesteven District Council
implementation process is estimated to take in the           Newark and Sherwood District Council
region of 45 working days. As part of the process,           East Northamptonshire Council
Comensura will assist with project management,               Rutland County Council
business process integration, change management,             West Lindsey District Council. (Implemented)
technology configuration and integration (including into
e-HR and e-procurement systems as well as financial
systems), and training for staff, staffing partners and
existing temporary workers.




                                                              Contacts
                                                              L isa Tu t t
                                                              Senior Buyer
                                                              Eastern Shires Purchasing Organisation (ESPO)
                                                              tel: 0116 265 7933
                                                              email: l.tutt@espo.org
                                                              quoting: ESPO Contract 653LND

                                                              A n dr e w F o s t e r
                                                              Assistant Director (Procurement)
                                                              East Midlands Centre of Excellence
                                                              tel: 07921 491 698
                                                              email: andrew.foster@nottscc.gov.uk




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Description: Process of Staffing Contract with Recruitment Agency document sample