Web exclusive: 15 per cent cut? Too costly

Wednesday, May 30, 2007

By signing up to restrictive managed service agreements, local authorities are losing a chance to regenerate their local economy, says Richard Manby

It’s widely accepted that “Councils spend too much on agency temps”. So when a salesperson from one of the Managed Services Providers calls a Council’s Head of HR, she is likely to get a sympathetic hearing. By taking control of the contingent labour function, automating the workflow then limiting the number of agencies allowed to supply, each having agreed pared-to-the-bone margins, MSP’s claim they can save LA’s 15% of staffing costs. Increasingly HR departments are signing up. And by doing so they can easily miss the chance to further a council’s wider aims.

Managed Service Agreements often run 3-5 years and give the vendor, who has been granted exclusivity, the unintended opportunity to veto initiatives outside the scope of the agreement. That’s not necessarily a problem for HR; their priority is seeing service levels maintained. But across the corridor, the Council’s Head of Regeneration can be grappling with problems of stagnating worklessness and lack of economic opportunity locally. There is a new, only now viable, solution to these problems with negligible cost. But it requires the council to lead local employers into a new way form of contingent labour hiring. That might not appeal to a newly ensconced MSP.

This quandary is real for councils around the country. Others that have not yet signed with an MSP need to make sure any agreement does not limit their options to pursue wider goals. They could be denying themselves access to a tool that can both cut costs and regenerate parts of the local economy.

“Slivers-of-Time Working” is a concept developed over 12 years in which Britain leads the world. Funded by ODPM/DCLG it offers sophisticated website-based marketplaces where anyone can sell their spare hours to local employers. Around the UK there are individuals who desperately need to find work in this way around other commitments in their life. Examples include childcare, studying, job-seeking, partial employment, caring, medical problems or starting their own enterprise for example.

There are employers who would like access to a pool of top-up workers they can purchase for odd hours of irregular need. Think of caterers, retailers, hoteliers, the leisure industry, distributors, manufacturers. And Local Authorities. If resource is to be economically matched exactly with need in public services, this kind of ultra-flexible labour force is the only way it’s going to happen. The odd-hours workforce becomes particularly useful because they can be cheaply inducted in groups. Extra pre-trained workers are then constantly on-tap for peak periods.

Making this new channel in the labour market safe, simple, cost effective and enticing is only now possible. It requires behind-the-scenes technology that goes way beyond the functionality of job-boards, auctions or workflow automation. The world’s first true marketplace for Slivers-of-Time launched in LB Newham in 2005. Now, thoroughly tested, it is expanding across the UK. We know the need is there. Government’s own research shows 13.7m people need to sell spare hours at some point each year in the UK. 68% of them want to try Slivers of Time Working for multiple employers. Savings to the taxpayer could be significant.

The issue in getting one of these markets off the ground in any particular area is: who is the first employer who commits to channel enough work through the new market so it can approach critical mass? It is councils who have that incentive. The private sector does come into these markets, but have little reason to help them through their launch stages.

Councils across the UK find themselves cleft between Regeneration teams who see thousands of residents needing “bits of work” and HR departments who are unsure if they can use the council’s own requirement for work to seed such a facility because they’ve handed control of those decisions to a multinational MSP.

Westminster council have responded intelligently to this quandry. Leader Sir Simon Milton’s public list of priorities for 2007 includes a commitment to evaluating the case for acting as catalyst for a local marketplace for “bits of work”. Agencies tendering for the council’s contract have been informed that they may be asked to allow these types of bookings in the life of an agreement. The council has kept its options open.

Levels of spending on agency temps has become an idee fixe. But the move by LA’s to MSP’s comes some five years after the corporate sector adopted the same strategy. There is now a danger that in seeking to implement second hand business processes, councils are denying themselves access to much newer options.

By all means sign with an MSP. But ensure your contract allows you to instigate very precise, short, bookings if it becomes clear that doing so will serve your ends at any point during the contract life. Better still, ask your HR and Regeneration people to read up at www.sliversoftime.info . They may want to factor this new channel in the labour market, as well as MSP’s into their thinking.

Richard Manby runs Local Authority Outreach for Slivers-of-Time Working.
www.sliversoftime.info