In today’s business environment, organisations are constantly seeking innovative approaches to workforce management. St. Modwen Homes, a prominent UK house builder, demonstrates how strategic solutions can transform operational challenges into opportunities for growth and efficiency.
St. Modwen Homes, like many construction companies, relied heavily on temporary labour to manage fluctuating workloads and fill specific skill gaps. However, this approach presented several challenges:
1. Legal compliance risks, including issues related to illegal workers, IR35, and modern slavery
2. Varying costs associated with multiple recruitment agencies
3. Lack of control and visibility over spending
4. Inconsistency in workforce quality and project continuity
To address these issues, St. Modwen Homes partnered with Datum RPO to implement a neutral vendor managed service. This innovative solution offered several key components:
1. Standardised margins across all agency suppliers
2. Controlled pay rates for workers
3. Centralised ordering system
4. Technology for ordering, approving, and paying invoices
5. Pre-authorisation controls for vacancies, extensions, and rate increases
6. Legal compliance audits for every agency worker
7. Real-time management information
8. Consolidated invoicing
9. Dedicated account management for agency liaisons
The implementation of this solution yielded significant benefits for St. Modwen Homes:
1. Streamlined procurement process: The solution provided a single point of contact for all temporary labour requirements, simplifying the engagement process and reducing administrative burden.
2. Enhanced operational visibility: Centralisation of the procurement process offered St. Modwen a comprehensive view of costs, enabling better budget allocation and control.
3. Improved compliance: The solution ensured adherence to all relevant legislation, including AWR and IR35, mitigating legal risks associated with temporary labour.
4. Cost optimisation: Standardised margins and controlled pay rates led to more predictable and manageable labour costs.
5. Quality assurance: The structured system ensured consistent quality and performance across the temporary labour force.
Datum RPO took on the responsibility of fulfilling St. Modwen's entire temporary labour requirements. This involved managing a workforce of 400 to 500 individuals across approximately 50 client sites, engaging with nearly 250 hiring managers, and maintaining relationships with 50 partner agency suppliers.
The key to success in this case was not just finding a solution, but implementing a comprehensive strategy that aligned with St. Modwen Homes' specific needs, culture, and long-term objectives. By moving beyond traditional recruitment methods and embracing a neutral vendor managed service, St. Modwen Homes transformed their temporary labour management from a fragmented, high-risk approach to a centralised, efficient system.
This approach goes beyond mere cost-cutting—it represents a strategic reimagining of workforce management that prioritises operational efficiency, legal compliance, and sustainable growth. The real power lies in understanding the unique complexities of workforce procurement and creating a robust, flexible, and compliant system that supports core business objectives.
Companies like St. Modwen Homes recognise that effective labour management is about creating sustainable value for the organisation. By proactively designing systems that enhance operational resilience and reduce risk, they position themselves for long-term success in an ever-changing industry landscape.
The case of St. Modwen Homes demonstrates the potential of neutral vendor managed services in addressing the challenges associated with temporary labour procurement. As businesses continue to navigate the complexities of workforce management, this model offers a promising solution that not only addresses immediate challenges but also provides a foundation for future growth and efficiency.