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5 key reasons for efficient agency labour management

10 July 2017

Efficient agency labour management can be very hard to get right, especially if you operate in multiple locations and with many different suppliers. The ability to manage agency labour spend with efficiency can result in direct cost-savings, legislative compliance and a highly-engaged workforce.

Datum RPO looks at 5 key benefits that efficient agency labour management can bring an organisation.

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1: Varying margins and pay rates

A common issue when managing multiple recruitment agencies is the varying margins and pay rates. Agency margins can often begin to spiral out of control if not managed correctly, leading to overcharging. This, as well as no visibility of worker pay rates, can mean a lack of pay parity, conflict and inefficient spend.

By standardising pay rates and margins correctly, managing Employers National Insurance and Holiday Pay, a good RPO company could deliver direct cost savings annually of between 6% and 12% of your total spend. An RPO also provides consolidated invoicing, whereby your business will only receive one invoice (weekly or monthly), with an easy upload to your back office systems.

These fair and clearly visible margins provide a degree of transparency, consistency, efficiency and ultimately lead to reduced  costs  and increased flexibility.


2: Legislative impacts

It’s no secret that the use of contract and temporary workers in the UK is on the rise. In fact, the UK actually has the biggest temporary workforce in Europe, with temporary and contract workers making up 5% of the total workforce. However, despite a whopping 81%

of companies enlisting recruitment agencies to help them hire temporary workers, 59% of those companies have no process in place to evaluate agency performance – and without regular evaluation and auditing of recruitment agencies, it’s impossible to be sure of legal compliance within your temporary workforce.

Your business could be exposed to a number of legal risks including, but not limited to:

  • Agency Worker Regulations - as the end user of agency labour, its your responsibility to ensure all your temporary workers receive equal pay and benefits to your permanent workers after 12 weeks.
  • National Living Wage - it's a criminal offence not to comply with the £7.20 p/h pay, including agency workers and permanent staff.
  • Missing Contracts - our research has found that 27% agencies fail to issue a professional contract with their workers. Using workers without contracts can present increased and unnecessary risks.
  • False Self-Employment - using agency workers that are falsely labelled as self-employed may result in your business being liable for any unpaid tax and national insurance.
  • The Modern Slavery Act - businesses (including agencies) with a turnover of more than £36m must now publish a slavery and trafficking statement. This includes showing how they are taking steps to reduce modern slavery in their supply chain.
  •  Rights to work - your business could be held responsible for fines up to £20,000 per worker if agencies accidently allow someone to work that does not have a right to work in the UK.


3: Brand image for temporary/contract workers

Anyone working at your organisation has an experience of your brand, including agency and/or temporary workers. If those workers endured a poorly structured engagement process (i.e. incorrect/minimal training, limited communication between vetting, etc.), they will have already painted a negative picture of your business, even prior to their start date.

Considering that there is a huge shortage of temporary and contract workers, improving the worker experience has never been so critical. RPO is an effective way to improve the candidate experience and build your brand, as RPO companies manage recruiters effectively  to work as an extension of your company, to give candidates a smoother, more positive experience during the engagement process.As all  your  suppliers will have  a  standard  process  of  engagement, you  can  also  ensure  that  they  are  portraying  your  brand  correctly to all of your existing and potential candidates so that they have a thorough engagement experience, meaning that they will view your business in a consistent and positive light.


4: Overworked hiring managers

When harnessing a large temporary workforce, hiring managers can often be given a large number of CV's for vetting, most of which may be inappropriate for the listed job: a time-consuming process. This, coupled with margin negotiations with individual agencies, can put your hiring managers at risk of being burned-out or overworked.

Our service ensures that all CV's are pre-vetted to exact requirements,  allowing  hiring  managers  to  concentrate  their time on what matters. Equally, our standardised approach guarantees balanced  margins  and  pay  rates  between  agencies,  offering  a greater deal of flexibility for hiring managers that no longer have to spend their time negotiating rates with every single agency.


5: More engaged supply chains

Often, companies use a number of different agency labour providers to fulfil their recruitment needs, enabling them to scale up or down their workforce as necessary. But how can you be sure that you are getting the most from your supply chain at all times?

RPO technology  monitors  the  entire  recruitment  process  –  and that includes supply chain management. It’s important to nurture relationships with your suppliers to ensure  you  get  the  very  best out of them - utilising RPO technology will give you the tools you need, to do just  that.

By having access to real-time information, you can track and monitor your suppliers, measuring them against each other and ensuring they are working as hard for your business as you deserve. In addition, RPO  technology can  also grant  you  total  visibility of  everything that’s going on in your supply chain, allowing you to make informed decisions via one easy-to-use interface.

From tracking agency response times to checking legal compliance and thorough auditing to cost comparisons, adding the power of RPO technology to your recruitment process can help you to turn your supply chain into a strategic asset and deliver you those all important results.


Download the full Datum RPO guide 'Your guide to taking control of agency labour spend' 

  Download Guide


About Datum RPO

Datum RPO are experts in recruitment process outsourcing and handle the entire recruitment process for some of the UK’s biggest companies.

As experts in procuring and managing temporary and contract agency labour, we provide a complete RPO service that helps our customers become more efficient, whilst delivering savings of up to 12% on existing spend.

Find out more about the Datum RPO difference at www.datumrpo.com

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