Contingent: The Flexible Workforce Conference - Building and Managing a Contingent Workforce Resourcing Model - ATC Events

Building and Managing a Contingent Workforce Resourcing Model

Sonia Tammaro – National Resourcing Manager, Origin Energy

Tara Knobel – Client Relationship Director, Alexander Mann Solutions

27 August 2013

© This information is the property of ATC Events and may not be reproduced or used without attribution

Origin Energy SnapshotASX Top 20 by

market capitalisation

5,200+ employees

150,000+ shareholders

52.8% interest in Contact

Energy

4.5 million Gas, electricity and LPG customers across Australia

Market leading green energy

retailer

5,900 MW owner or

contracted generation capacity

Wind development

portfolio

Origin Energy is Australasia's leading integrated

energy company focused on gas & oil exploration and production, power

generation and energy retailing

With a 37.5 per cent interest in Australia Pacific LNG, Origin is

developing one of Australia's largest coal

seam gas (CSG) to liquefied natural gas

(LNG) projects

About Alexander Mann Solutions

As a talent management company AMS is passionate about delivering adaptable, world class, talent solutions in partnership with our clients; believing people are the foundation of success.

We blend powerful insight & great people, measurable innovation & operational rigor, to deliver impactful business outcomes. Unique blend of services and consulting

propositions Working with world-class brands across the full

talent lifecycle Over 1,800 specialist staff, with delivery into

over 75 countries in 30 languages Five global shared services centres allow 24/7

delivery …highly values driven

Origin Group Resourcing Overview


• We deliver and manage the following services:• Permanent and contingent recruitment• Contractor payrolling and management (CXC)• Graduation and vacation recruitment• Volume recruitment for Contact Centre and Greenhands• Redeployment services• Agency management

• Our team consists of:• Supported by a small team of 5 Origin resourcing specialists

that provides oversight and governance.• Outsourced recruitment model via Alexander Mann Solutions -

60 specialists (on and off site) • Contractor management and payrolling via CXC - 16 dedicated

CXC specialists working

• We deliver around 2000 permanent hires per annum and have over 1100 contractors. We manage approx. 1200 contract hires per annum and 950 extensions.


The key skill sets we recruit include:

• Engineers (mechanical, technical, electrical, construction, chemical, petroleum)

• Drilling and Completions specialists

• Commissioning specialists

• Health, Safety and Environment (HSE)

• Land access specialists / community liaisons

• Professional (Finance, IT, Marketing, HR)

• Contact Centre

Origin Group Resourcing Journey

Pre 2009HM Driven / Talent 2 Trial

2010Hudson Perm

RPO

2011 AMS/CXC

Contingent RPO/CMO

Objectives: Reduce costs, create efficiencies, manage risk,

improve quality of hire, improve candidate experience

De-centralised Centralised

Agency Direct

Ad hoc processes Process Driven

Manual Automated

Why did Origin need a contractor resourcing model?

Rationale for Reviewing Contractor Resourcing

Lack of VisibilityContract governance

Decentralised infrastructure

Potential tax / co-employment liabilities

Health and Safety

Inconsistent / high marginsPoor cost

managementUncontrolled pay

ratesContractors engaged on consulting rates

Inconsistent approval processes

Lack of talent poolingInconsistent onboarding procedures

Lack of HM support

What Models Did We Consider?

Page 10

1. InsourceAll

2. OutsourceAll

3. Insource Strategy & Outsource delivery

Outsource the end to end

recruitment, sourcing,

screening and selection to an

RPO

Outsource payrolling and

contractor management to a

CMO

We did this

Origin Resourcing Team

Contractor Management

Team(CXC Global)

Manages /Payrolls

contractorsABN /PAYG/Sole Trader/

Pty Ltd /Trust/

SOURCINGDirect sourcing/ Talent Pools/ Referrals/

Approved Agencies

Contractor Resourcing

Team(AMS)

Permanent Resourcing

Team(Hudson)

ORIGIN RESOURCING •Strategic Focus•Own Talent Pool•Governance (manage SLAs)

What Was The Solution?

Scope of the Contractor Resourcing Model

In Scope

• Contractor - A person who is supplied to Origin via a 3rd party i.e. recruitment agency, pay rolling company or consulting firm. Typically they stay at Origin for 3 months +

• Independent Contractor - A self-employed contractor who operates through a company with a unique ABN that has a contract directly with Origin. Typically they stay at Origin for 3 months +

• Temporary - A person who is supplied to Origin via a 3rd party i.e. recruitment agency. Typically they work at Origin is short intervals of less than 3 months

Page 12

Out of scope

• Consultants – Professional specialists engaged for the specific purpose of producing/ providing a fixed piece of work for a fixed price, or set daily rate (daily rate Contractors to be moved into scope after 6 months of implementation)

• EPCM Contractors - Engineering, Procurement, Construction Management. Contractors working for a Consulting (Engineering) firm engaged to deliver a specific project to Origin.

• Contractor Workforce payrolled by Origin - Fixed Term Employee / Casuals

Benefits of This Model

Tangible Benefits

• Lower overall contingent recruitment costs

• Reduction in margins

o Lowering rates

o Substituting pay rolling

• Reduction in payroll charges

• Reduction in taxes and charges e.g. workers compensation payroll tax

• Elimination of errors over charging

• Reduction of administration effort

• Reduced reliance on recruitment agencies

• Reduction in contractor/temp numbers

• Elimination of time sheet theft

• Reduction in asset theft

Intangible Benefits

• Reduction of legal risks

• Visibility and management of the total contingent workforce

• Improvements in safety compliance

• Increased competitive intelligence

• Faster time to contractor productivity

• Streamlining on boarding and exiting

• Transfers between permanent and contract

• Improvements in productivity both contractors and hiring managers

• More accurate and faster reporting

• Scalable contingent recruitment to support growth

• Improve hiring manager and candidate experience

Implementing and Operating the Contractor Resourcing Model

AMS and CXC Responsibilities

15

Role qualificationEnd to end recruitment process management including direct

sourcingContractor talent pooling

Agency liaison and management

Candidate verificationExtension and termination

managementManagement of CMO

Contractual engagement of workers

Payrolling of direct and agency workers

Management of tax payments and statutory contributions

Risk mitigation including insurances and HSE

managementPerformance management and

disengagementsBilling agent for RPO and

agenciesContractor services including

financial advice, salary packaging, EAP and tax

Implementation

16 | Building and Managing Origin’s Contingent Workforce Model

Discovery4 weeks

•Process and policy•Invoicing and payment•Third party suppliers•Hiring managers•MI/reporting•Risk & compliance•Sourcing channels•Branding•Recruitment system

Design2 weeks

•Process design and mapping end to end processes•System configuration specification

Deploy6 weeks

•Team resourcing •Operations manual•Governance manual•Systems configuration and reporting build•Performance management framework – SLA’s and surveys•Training design and development•Communications roll-out

Team Mobilisation and Training

2 weeks

•Team onboards•Process and technology training•Origin specific induction and training•WIP transition

Implementation Challenges

Due Diligence

Using Existing Technology

Infrastructure

Working Arrangements

with Permanent RPO

Parachute Solutions

Low Touch Change

Management

17 Building and Managing Origin’s Contingent Workforce Model

Results - How the Model has Made A Difference

Wasted line management time Contract management overheadInvoice processing costs Worker fees or wagesEmployment costs + Social taxes

Vendor MarginsInvoice calculation errors Contract production and maintenance Wasted HR/ Procurement Time

Origin has now created efficiencies and managed risk at every layer

Results


Results

• Savings in excess of $6.5 million

o Reduced reliance on agency channels

o Reduced cost of payrolling

• Calendar YTD model cost expressed as a % total contractor spend = 9.49% (Agency, AMS, CXC, WC, PI+PL fees – excludes payroll tax)

• Consolidated spend management – visibility of all cost inputs

• Over 80% compliance to the model

• Implementation of Origin-specific contractor rate card

• Reduced hiring manager time spent on contractor resourcing

• Improved process efficiency – purchase order creation and receipting support, enhanced admin processes

• Strong partnering between RPO and CMO to deliver seamless service to Origin business


Continuing the Origin Group Resourcing Journey

Pre 2009HM Driven / Talent 2 Trial

2010Hudson Perm

RPO

2011 AMS/ CXC

Contingent RPO/CMO

2013AMS

Perm & Contingent

RPO

Objectives: Reduce costs, create efficiencies, manage risk,

improve quality of hire, improve candidate experience

De-centralised Centralised

Agency Direct

Ad hoc processes Process Driven

Manual Automated

22 |

Client and Candidate Engagement Team(Permanent and Contingent)

Contractor Management

Team(CXC Global)

ORIGIN RESOURCING(Group Leadership, Agency Management, Candidate Attraction Strategies,

Metrics and Reporting)

Evolving the Operating Model

Sourcing Team(Permanent and Contingent)

Admin Team

(Permanent)

Admin Team

(Contingent)

• Single RPO provider

• Segmentation of roles and responsibilities

Lessons Learnt

Lessons Learnt

• Ensure internal processes are robust and fast enough to meet the requirements of a “pay when paid” modelProcure to Pay Process

• Focus equal effort or Exec team, Finance, Procurement and Legal as well as HR, Hiring Managers and Contractors

Comms & Change Management

• Streamline systems / ensure they are “fit for purpose”• Design manual workarounds & a plan to migrate away

from them• Seriously consider a VMS

Technology

• Ensure outsourced vendors and internal functions are aligned and work cohesively

• Processes need to work in with Finance and HR and Business Units with unique needs

Alignment of Partnerships

• Walk through the process as if you were a contractor• What and how much information do you get and from

who?Contractor Experience


Building and Managing Origin’s Contingent Workforce Model

The Steps to Success

Step 1 Create a compelling business case

Step 2 Influence and secure stakeholder buy in

Step 3 Design a relevant model, fit for needs

Step 4 Operate as an integrated and engaged team

Step 5 Listen, measure, review and optimise

Building and Managing Origin’s Contingent Workforce Model

Thank you