29 November 2007 | Antony Barton
Buyers at Npower expect to save more than £2 million over five years, after finalising a £55 million recruitment outsourcing deal.
The contract will cut Npower's recruitment supply base by two-thirds and halve the volume of invoices it processes.
Daniel Powell, strategic buyer and project manager, said when he joined the company two years ago it was using about 60 recruitment suppliers in addition to the 10 sanctioned under its 2002 master vendor agreement.
"No Npower department took full operational responsibility for the agreement, so it had a great deal of time to fall into disrepair," he said. "Reviews into how we had accumulated so many extra suppliers found that geography, lead-times and skill requirements led to business units taking their own initiatives."
Powell set up a project management team with staff from procurement, HR, finance and metering to streamline the process.
Now all managers who need temporary workers submit an electronic form to the provider Hy-phen. It passes them on to a preferred supplier list. Detailed specifications are designed to streamline candidate selection, therefore reducing attrition and increasing the rate of temporary to permanent recruitment.
Around 5 per cent of Npower's 11,500 staff are temps. Powell said the initiative will end maverick spend on temporary staff and ensure appropriate legal cover for the business. Compliance will be achieved via a corporate mandate and technology that prevents temps being hired without due process.
Hy-phen will also ensure all suppliers are contractually obliged to carry out security checks on staff.
Powell said: "There are background checks completed within the outgoing master vendor agreement, but with the other 60 suppliers that are being used across the business there have been incidences where perhaps processes haven't been followed as thoroughly as they should have been."
Powell added invoice consolidation should mean the number of invoices drops from 30,000 per year, or 50 per cent of accounts payable's entire workload, to no more than 24.
He also said the process has brought procurement and HR closer together.
All business units will be expected to use the new model by next spring, when the current contract ends.