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Stewartson Resourcing Solutions

Case study 1 - Contractor process audit, redesign and roll-out

Our client was a mobile telephone operator. It had undergone exceptional growth over a four year period - from 1,600 personnel to over 6,000. Recruitment of payroll personnel was managed centrally but the engagement of contractors sat within the business. The acquisition of this company was underway and the purchasers, although impressed by the business in general had major concerns about the lack of management information available on the contractor headcount and costs.

The initial project was to conduct an audit of the contractor status, to look at suppliers terms and margins, to accurately capture the past, current and forecasted headcount needs and costs and to make recommendations for better control.

The audit revealed that; the business was reporting on only 60% of the true contractor numbers and costs; margins paid to agencies ranged from 15% to 50% of the contractor pay; there were a lack of robust agreements and terms & conditions in many instances; administrative costs to process invoices and agreements were unnecessarily high due to the volume of suppliers being utilised (over 120); the “broken” process only retrospectively captured information and there was little control of guarding the portals of the business.

The second stage of the project involved; the design of a new and robust process which ensured that the necessary authorisation levels were adhered to; that all contractors on site had been referenced, approved and met the corporate governance requirements; a tender process undertaken to reduce the number of suppliers and ensure the required terms and conditions of business, service level agreements and professionalism were in place (for example over 70 suppliers had provided IT staff in the past three year period, this was reduced, through a rigorous tender process to three.)

The third stage was to roll out the new process. Within the first six months of the operation there were; measurable reductions in both the overall cost of a contractor and in the margin or mark-up being charged by the agencies; there was a reduction in the time taken to hire; a marked improvement in the ratio of CV:Interview:Offer:Starter; accurate management information; and despite their initial reservations about centralising the process increased management satisfaction.

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