Saving £25,000 in Indirect Costs Through Fairer Pay
Company Background
Our client is one of the top food retailers in the UK, employing 70,000 people across the country. Their warehouses supply 2,500 stores nationwide, ensuring that daily and seasonal peak demands are met across Summer and Christmas.
Client
Contact
Sector
Staffing Type
Recruitment Challenge
Our client was experiencing difficulties recruiting and retaining temporary warehouse staff. During a thriving UK economy, with record levels of employment, our client experienced an increase in employee attrition, reaching a rate of 24%. This was, in part, due to the changes in National Minimum Wage levels compromising our client’s competitive position.
Increased attrition meant additional strain on the remaining workforce. With seasonal peaks to account for, including Summer and Christmas, our client needed to ensure that they were recruiting the right candidates with high enthusiasm and morale to avoid attrition and ensure customer demand was met.
Recruitment Solution
To reduce attrition and attract order pickers of a sufficient quality, the pay rate of temporary workers needed to be increased. However, our client’s budget didn’t allow for this increase at the current rate of attrition.
Our Blue Arrow team set out to prove how an increase in pay could offset the indirect cost of attrition and additional need for recruitment and training, without stretching the budget. We did this through a benchmarking and analysis exercise.
Recruitment Journey
Pay rates were measured using a variety of sources, including ONS reports and statistics, combined with a “live” local competitor analysis. This was backed up with our own market intelligence as one of the sector’s largest recruitment suppliers. Our team looked at the indirect costs of attrition, considering training and onboarding, and the loss of more productive staff, resulting in a cost of £0.60 per hour.
End of contract surveys for temporary workers and their managers were revisited identify specific reasons for leaving. This additional research focused on early leavers (within the first 12 months of employment) with the main cause being competitive pay elsewhere – encouraging our work on realigning the budget.
Through local market insights and quarterly benchmarking exercises we are able to help our client shape a competitive proposition to attract the best talent during recruitment drives.
Blue Arrow Director
The Results
Following the full cost assessment and provision of market analysis, a £0.60 per hour pay lift was implemented. Through our work, we achieved:
- £24,000 in savings from indirect costs
- 70 temporary workers recruited
- 9% increase in productivity from improved retention rates
