Local Authorities: Maximising your workforce

The Local Government Association 2022 Workforce Survey revealed more than nine in ten councils are experiencing staffing issues. 71% of local authorities are struggling to recruit adult social care workers and eight in ten councils are having difficulties recruiting children’s social workers. The survey also found that 58% are struggling to recruit planning officers and more than a fifth are experiencing recruitment difficulties for HGV drivers.

Nearly half of councils which run environmental health services were having difficulties recruiting environmental health officers and 43% were having difficulties recruiting building control officers. At the same time, local authorities are also squeezed in terms of budget, so they do not have endless funds to spend on recruitment, advertising, and training new staff.

It is for this reason that more local authorities are looking for a smarter way to access the contingent workforce that they need to run their services cost effectively, efficiently and to the highest standards. Balancing recruiting employees in low supply skill areas with the need to keep costs down is challenging, but it can be achieved with the right approach and partners.

Establish and control your costs

Most local authorities have a high-level overview of their total spend on contingent workforce through financial reporting against specific budgets or cost codes. Unfortunately, without a granular-level view of how total spend is broken down across their business it makes ensuring value for money significantly harder to achieve. To get this information, local authorities need to go back-to-basics and understand the supply costs of a contingent worker. Granular aspects to look at initially include:

• Contingent workers pay, including all contingent worker’s hourly pay or salary, overtime, bonuses, and other expenses, such as travel, accommodation or subsistence costs.
• Contingent workforce costs, including National Insurance (NI), Working Time Regulations (WTR) and other costs such as contributions under the Pension Auto Enrolment and Apprentice Levy legislation.
• Supplier margin, which is the amount or fee a recruitment supplier will charge to supply them with a contingent worker. Typically, this is through a fixed hourly margin or percentage mark-up and can range from 4-50% of the total invoice cost, depending on how challenging the position is to fill.

Benchmarking for value for money and compliance

When a local authority has this information, they should benchmark these contingent worker wages/salaries and expenses in the same way they do with permanent staff. Aligning contingent and permanent worker pay rate reviews is even more important than ever, to remain compliant with Agency Workers Regulations (AWR).

AWR aims to ensure that contingent workers are given a comparable pay rate to permanent workers carrying out the same or similar role. AWR also entitles contingent workers to have access to facilities and benefits that permanent workers have. Expenses such as travel costs, accommodation, food and subsistence can be a hidden cost not taken into account, so it’s recommended that a standardised expenses policy is implemented and enforced to prevent this from becoming a considerable additional cost.

Local authorities should regularly compare contingent worker pay rates and benefits against the local employment market. This will give them an idea of if they are getting value for money.

Smart data and forward-thinking suppliers

Position your local authority as an employer of choice to avoid paying over the odds in wages

The recent 2022 Workmonitor survey showed that the key areas employees are looking for when assessing an employer include job stability, flexibility, a good work/life balance, and alignment with their values in terms of social and environmental issues.

By working with a forward-looking contingent workforce management partner, you can ensure that you are communicating the right messages to the right candidates that support your local authority’s strengths in terms of benefits of employment, efforts in reducing environmental impact, and social initiatives carried out.

The right partner will not only get these messages out there, but they will get it in front of an audience that contains high quality, engaged candidates that will respond positively. This will help to a local authority stand out as an employer of choice, giving them an advantage over the private sector where benefits and values might not align as well, and negate the need to pay over the odds to compensate for the incorrectly perceived “disadvantage” of working in the public sector.

Data driven suppliers

Suppliers within local authority frameworks will be able to predict trends and upcoming skills requirements. Smarter use of data in this way means you aren’t relying on last-minute hires from agencies who are charging over the odds for short notice.

Smoother induction processes to implement skills faster

Even after you have candidates onboarded, long, drawn out induction periods means that in the short term – as new employees are settling in – that skills shortage still exists, even if that’s for a relatively short period of time. Even validating qualifications, compliances and references, ensuring information such as health and safety is provided, and organising payroll in advance will significantly reduce an induction period by days.

Smarter contingent workforce management means a shorter and smoother induction process, ensuring new employees are working at optimal levels as fast as possible, bridging that skills gap right away.

Understanding and maintaining supplier margins

Understanding how supplier margins are calculated will help local authority workforce leaders see what margin is being paid for each role and potentially make some quick savings with recruitment agencies that are charging more than the average with no apparent cause.

Insisting on transparency from suppliers regarding their margins as well as their approach to pricing Working Time Regulations (WTR), National Insurance (NI) and other costs will ensure that spend isn’t being unnecessarily wasted on unwarranted comparatively higher fees.

Fair negotiations to maintain good relations with suppliers

No one wants to turn a working relationship into a bazaar style bartering session, but that doesn’t mean that there aren’t instances where it would be fair to negotiate a discount.

A recruitment agency’s cost of sale is standardly linked to winning new business and placing a contingent worker on a work assignment. Their pricing model will reflect that and so if there are circumstances where this is not the case – for example a contract or project is being extended, or an existing worker is just being moved to a new project – then it would be fair to ask for a rate that reflects this reduction in time spent by them, to get better value for money from your contingent workforce.

Although competition among suppliers is beneficial, it is also important that local authorities reach a ‘win-win’ situation where suppliers feel that the relationship is worthwhile. If reducing margins ends up equating to unhappy suppliers, they may not invest enough of their time in sourcing suitable candidates, which will cost more in the long run.

Easy to use check list to ensure value for money on a contingent workforce

If you’re working at a local authority where you are concerned that you’re not getting the best value for money from your contingent workforce, download this easy-to-use checklist to find out where you might save money and optimise efficiency.

Click here to download the checklist

Comensura’s approach to benchmarking

Comensura uses a balanced scorecard approach and a supplier tiering (or league table) system that places downward pressure on price and upward pressure on improving quality. Benchmarking like this can be based on a number of factors linked to your contingent labour requirements, such as a supplier’s:

• Speed to respond to orders
• Acceptance or rejection of orders
• Pricing for each order
• Quality of candidate and whether they meet the requirements for the role
• Fill rate versus the orders they receive

Comensura has supported hundreds of organisations with analysis, benchmarking, and discovery processes, either as an initial consultation process or as an objective third party. If you would like to find out more, please contact us at [email protected]

If you have any questions or would like to know more about our Managing Temporary and Permanent Recruitment framework and how YPO can help, please get in touch with the team!