We ran a free webinar exploring ‘How Councils can Overcome their Hiring Challenges and Reduce Costs’ with insight for Sarah France-Gorton at North Yorkshire Council. She explained how the Council has achieved significant improvements in control, fulfilment, compliance and substantially reduced spend.

Introducing Sarah France-Gorton

Sarah is the Head of Resourcing at North Yorkshire Council. With over 20 years’ experience in Recruitment, she spent the first half of her career working in the Private Sector across the North East and Scotland before joining North Yorkshire Council and leading this service. Offering a hybrid between internal talent teams and agencies, Sarah’s team are not commercial, but by supporting over 400 clients, it helps them to extend their services.

You can watch the full webinar here:

Introducing North Yorkshire

As a Council, North Yorkshire have a large geographical patch with over 606,000 residents, 10 million tourists and 17,000 members of staff – all in the largest county in England.

Demographically, North Yorkshire is mixed. With deeply rural areas in the Dales through to quite large market towns, some of the labour market is scarce and difficult to recruit. With some coastal towns that are deprived through to Harrogate that has a 0% unemployment rate, the variety of areas within their location provides challenging issues with agency supply.

Understanding the Challenges at North Yorkshire

Before partnering with Matrix SCM, North Yorkshire estimated that they had around £4 million of temporary staffing spend that they were able to identify. Recruitment was Hiring Manager-led. They would choose which agencies they wanted to work with, meaning suppliers fronted the approach. Without a strategy or framework, there was a problem with high agency margins and long contracts. As an example, one worker had been in a contract placement for 7 years.

This was not good for the Council, as agency workers were on preferential terms compared to their long-term staff, earning significantly more and having the freedom to choose assignments meant that it was harder for North Yorkshire to recruit permanent long-term employees.

With a temporary recruitment strategy that was not complimenting the overall strategy, Managers were experiencing low levels of satisfaction from the hiring model with low quality staff being provided by agencies. On top of that, with a lot of the counties economy relying on small enterprises, they found that large agencies were earning a lot from North Yorkshire. This left a numer of the local smaller recruiters not getting access to engage with the authority.

This supplier-led approach to their recruitment meant that North Yorkshire had limited visibility over their workforce’s compliance; putting them at risk. This also had an impact with safeguarding obligations, statutory requirements and dealing with FOI requests.

Making the Decision to Change:

Drivers

As mentioned in the section above, North Yorkshire Council were aware that they could not continue without a strategy or framework in place for the recruitment of temporary staff.

The first step to solve this issue was to look at what the goals of the new contract were. They needed to reduce costs, increase fulfilment, ensure the model was compliant and have a strategy that complimented their permanent recruitment.

Options

Sarah identified that there were 4 main approaches they could take to manage their temporary staffing; free choice, Preferred Supplier List (PSL), Master Vendor or Neutral Vendor Managed Service model.

Free choice: involving Hiring Managers hiring as single entities meant that this model would not leverage the economies of scale that the Council needed to drive down costs and increase fulfilment.

PSL: being such a big entity with diverse requirements, the PSL would have to be big to ensure that all categories and locations are covered. This then dilutes our spend into the different locations and categories; becoming time intensive and a high-cost model.

Master Vendor: for this approach to work, North Yorkshire would need a single agency to fulfil 95% of the requirements and have strong relationships with other agencies to manage the last 5%. This really would put ‘all eggs in one basket’, which would not have helped the economic balance of supply and demand.

Neutral Vendor: this model drives competition to increase fulfilment and reduce costs with added benefits such as engaging local suppliers and having full visibility of costs, as well as control of their workforce through CR.Net.

Engagement

Speaking to key service leaders, Sarah created a working group of those who were using the most agencies. From there, they began analysing current and future demands and reviewing the options identified above to understand which approach was best to support them to meet their goals. This was essential to identify the new approach as it helped them to make the decision as a group and a consensus. Led by HR, this program meant that the final choice was being made by the consensus before being signed off by senior leadership. As a collective, North Yorkshire Council went ahead with a Neutral Vendor model as it was the best option for them to get the best value and drive fulfilment.

From Supplier-led Approach to Neutral Vendor Managed Service

Phase 1: Migrating Suppliers and Utilising Local Agencies and Local Workers

When North Yorkshire Council confirmed they were moving to a Neutral Vendor model, agencies got in touch to say they would not be supplying the council through the approach. In the end, during implementation, only one agency opted not join the supply chain. During this migration, all suppliers came across to the new contract on equal or better terms for the Council. In situations where there were problems with agencies, the Council honoured original prices.  

For the one Driving agency that did not migrate across, North Yorkshire Council let assignments run to a natural end before stopping engaging with them for new roles. Releasing all orders through Matrix SCM was key to ensure that off-contract spend was minimum; they could not say this is the approach then let Hiring Managers procure off the contract. To get the best value out of the Neutral Vendor model, they had to create the market competition by releasing the roles through CR.Net.

With CR.Net, North Yorkshire Council now have full visibility over all their temporary workforce so they know exactly who is on-site, what agency they are through and the costs. On top of that, CR.Net holds all compliance documents, meaning safeguarding and compliance checks can easily be found.

The model has also changed the type of suppliers they are engaging. 60% of agencies they are working with through Matrix SCM have operations in North Yorkshire and 80% of the workers are local. This is great for the Council as they can see they are supporting local workers and local businesses.

As a Council, they have been looking at ways to utilise digital as much as possible. CR.Net therefore also provided extra benefits such as automated invoices, coded invoices and reduced back-office costs.

Phase 2: Saving 30% on Agency Rates

Throughout the first phase, candidate quality and role fulfilment were maintained. At the 3-month stage, together, we could start to see which agencies were providing quality, who were filling roles quickly with the best candidates and rewarding them with more roles; mutually benefiting them and the Council. Alongside this data, we started hosting supplier events to further improve quality through the contract.

To further drive savings, we created a paid policy which meant that when a Hiring Manager requested a worker, we would set the pay rate at the bottom end of the permanent rate. They knew workers were expecting more, but they would not go above the pay rate. This was vital to ensure that the temporary workforce strategy supported the permanent workforce; showcasing the benefit of a worker transitioning onto a permanent contract.  

Through CR.Net, they also put a limit on how long a Manager can recruit a temporary worker to 8 weeks. This meant once the contract was over, they could either review and create a short extension, or if it needed to be longer term, they could explore taking that worker on directly and permanently.

Impact of the Neutral Vendor Approach

In the short term, North Yorkshire Council reduced costs by 20%. In the long term, having been on a Neutral Vendor Model for over 10 years now, their costs have not increased even with inflation. When it comes to contract reviews with suppliers, they have actually seen costs continue to reduce.

Now, North Yorkshire Council’s workforce is less than 1% agency. The suppliers they use have moved from a few agencies to over 40 regular suppliers that are proven to provide quality (60% of which are local SMEs).

Overcoming Challenges

Hiring Managers’ mindsets were one of the largest challenges North Yorkshire Council faced when changing approach. The Managers want to ensure they are getting quality. After speaking to suppliers, they were under the impression that the approach would not work. So, the Council had to bust those myths and inform Managers that this approach would help them get best talent quicker.

Another challenge North Yorkshire Council faced was the worry of using a system and losing the human element of the recruitment process to a portal. However, the amount of interaction you have is as much or as little as you need. Managers that do not want to have a dialogue can simply release roles to agencies through CR.Net in a streamlined manner. If you do want to interact, there is a 24/7 Client Support Advisor team that are there to help Managers if they are having problems. On top of that, if we have big requirements coming up that are complex or niche, they can either arrange a supplier event to engage with agencies. Alternatively they can arrange conference calls and brief recruiters directly.