Established in the 1960s, our client has grown to become the largest provider in the UK of workplace services – hygiene, waste management and many other diverse, office services.
It employs more than 5000 staff, has 90 regional service centres and annual sales of over £460m. The operating divisions are supported by central overhead functions primarily focused on service, sales and administration. Collinson Grant was asked to review these central costs of the Group.
Our approach centred on two scenarios:
- a 'zero-based case' to determine the minimum infrastructure necessary to support the current demand on different teams
- a 'growth case' to assess to what extent the current organisation could accommodate increases in demand.
About 400 people were covered by the review: some engaged on high volume processing of transactions with specified outputs; others with more varied tasks at lower volume and less well defined outputs. Some of the work was organised to provide shared services to the operating businesses. The total central costs under review were £19m, of which about £8m were costs of employment.
We used a number of analytical techniques to review the work of some 40 teams and many other sub-groups of employees. Some of the work contributed directly to the flow of work for customers, whereas others were engaged on more 'traditional' back-office functions. Process Activity Analysis (PAA) assessed how indirect staff actually spent their time. A separate review of 'work' determined capacity, productivity, rework and redundant output. These measures combined to calculate Overall People Effectiveness (OPE) – which factors in utilisation, performance and quality. A separate Organisational Structure Analysis examined managerial layers and spans of control.
Our work revealed opportunities in four particular teams:
- the teleappointing and credit management teams were large and had significant untapped capacity
- the frontline and contracts administration teams had highly variable demands placed on them, but were staffed permanently to meet 'peak' demand.
Overall, the capacity of different teams to absorb more work at current staffing varied considerably. The 'growth' case found that certain teams could absorb up to 70% to 100% more work. Others were already operating at or near capacity. The 'zero-based' case revealed the potential to reduce employment costs in the order of 17% (£1.4m). Six months after the assignment it was reported that the output of the 'teleappointing' department had increased by 30% as a result of work.