Credit crunch prompts waste industry to get smarter
By examining labour spend, waste companies can make big savings during more testing economic times, as Alison Harter, from de Poel Consulting explainsThere is little doubt that the current economic slowdown has started to impact the waste industry. Now more than ever before, we are witnessing a need for businesses in the sector to get smarter and streamline a wide range of their operations.
Meanwhile, sustained public interest in the waste industry continues, the upshot of which is that companies are under more and more pressure to reduce overheads without compromising the rate and quality of their work.
One area which often comes under scrutiny at such times within the industry is businesses' labour spend - perhaps an obvious area to examine in such a labour-intensive industry. But as such a labour intensive industry, reducing workforce numbers is simply not an option for many companies.
So what is the answer? Well, it's not a simple off-the peg solution. Every company has its own unique requirements and demands, and every business has a different approach to its spend on its workforce. But increasingly, top waste companies are working to gain a better understanding and more in-depth analysis of their spend in this area, ultimately looking to make their budgets work harder and indeed, there are a range of ways to achieve savings.
Increasingly companies are more reluctant to commit to permanent staff at these times, and whilst we have witnessed a downturn in the amount of permanent recruitment in the sector, temporary labour has rarely been more in demand in the industry.
The benefits of using temporary labour in this sector are invaluable; flexibility and responsiveness being a huge factor in the current climate. Staff can be provided by agencies quickly, as and when they are required. In the current economic situation, it's difficult for companies to predict staff usage and requirements beyond a certain date; therefore using temporary workers makes better business sense.
Even with a more temporary labour force there are still ways of making much more effective use of spend and effort.
Standardisation of service level agreements and costs is crucial, particularly for many of the big firms operating across different locations. A good relationship with a labour provider in one area may not translate to a great relationship elsewhere in the country. It's also crucial to ensure that all suppliers adhere to the same terms and conditions, to ensure that as a waste company, you can rest safe in the knowledge that staff are appropriately skilled and permitted to work.
Without careful management and agreement up front, temporary workers can also cause problems for HR and procurement departments, particularly when you consider the sheer amount of legislation involved. Similarly for finance departments multiple and incorrect invoices are constant headaches. But there are tools available to prevent the common pitfalls and with careful management and the right tools and advice, some impressive savings can be achieved.
Our work with major waste industry clients has resulted in direct cost savings of between 6-12% of total labour spend - several million pounds. With a UK-wide spend of £26 billion on temporary and permanent labour, the potential to streamline and save is enormous, not least in the waste sector.
de Poel Consulting www.depoelconsulting.com
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