Recruitment & Retention for Tier 1 Contractor – Hinkley Point C (New Nuclear Build - NNB)
Key Results: Cost Saving of over £¾ million whilst maintaining labour turnover of less than 4% against an industry norm of 30% +
1. What was the issue?
Our Client had a lot of recruitment to do in a very short space of time!
During the planning stage (under the PSC Contract), recruitment was identified as the biggest risk to successful mobilisation of the contract. The Client needed to recruit in large numbers whilst simultaneously creating a company identity and culture which truly embodied the values Customer Service decided upon whilst the company was in creation.
The Subcontractors affiliated to the main Tier contract also required to recruit in order to man their contracts. The complication with Subcontractor recruitment was that our Client needed the Subcontractors to buy in to the Clients’ culture and values, whilst not actually being in contract yet (another large wave of work with short timescales to complete). Simultaneously, our Client was negotiating competitive Subcontractor’s prices and trying to reduce the tender allowances for items like recruitment as each Subcontractor had made an allowance in their price for recruitment. Our Client had to convince their Subcontractors that they wouldn’t be out of pocket.
2. What was the impact?
Our Client was awarded their Term Service Contract in December 2017. Until that point, the Client had only been given approval to recruit 1 permanent member of staff (The Operations Director) who was recruited by Nirm Bassi of HRSS as his companies services were engaged in October 2017.
At the point of contract award (beginning of April 2018) the Client and their subcontractors had the best part of 250 positions to fill in 3-4 months.
With numbers for recruitment approaching 250 positions, the commissions that were envisaged were eye-wateringly large. Our Client & NNB did some calculations based on an average commission of 16%, which is standard in the recruitment industry and came up with the following:
Number of positions to recruit 240
Average salary 28,000
16% commission on £28k 4,480
Total commission for 240 positions £1,075,200
It seemed like an ideal area to target for combining the recruitment volumes and approaching one provider only to get the best deal possible.
3. How did HRSS fix it?
The Client was recommended the service of Nirm Bassi (HR Services & Solutions – HRSS Recruitment Specialists) as Nirm had already delivered a highly successful quality volume recruitment contract for another Tier 1 contractor over 2016/2017 so HRSS already had a proven track record. An agreement was made with Nirm where HRSS was paid only on results (successful recruitment and induction). A flat rate of 10% commission was negotiated on the basis of exclusivity which meant that HRSS would get the first opportunity to recruit for each position. In addition, HRSS agreed to refund any placements that didn’t work out within the first 3 months on a 100% refund basis.
A quick round of calculations revealed the savings to be made:
Number of positions to recruit 240
Average salary 28,000
16% commission on £28k 4,480
Total commission for 240 positions 1,075,200
Number of positions to recruit 240
Average salary 28,000
10% commission on £28k 2,800
Total commission for 240 positions 672,000
Saving or ‘cost avoidance’ 403,200
Below is what has actually been spent to date by our Client on recruitment:
Since October 2017 the Client has spent (ex VAT):
HRSS Recruitment Specialists £219,238.60
Other agency costs £26,441.31
Adverts £3,689.89
Total £249,369.80
Saving due to 10% £825,830.20
Saving if client paid 16% £422,630.20
Recruitment commenced in Jan 2018. By Mar 2018 HRSS had recruited the entire senior leadership team. By Apr 2018 there were 240 staff in positions via a variety of recruitment campaigns led by HRSS and supported by our Clients.
Staff turnover levels in the hospitality industry are usually around 30-50%. The Client has a staff turnover of around 3-4%. Therefore, the recruitment strategy has been borne out by the low staff turnover rate after just over 12 months of operating/recruitment.
4. Pearls of wisdom!
Full use was made of own recruitment consultancy service and of recruitment events managed by HRSS to ensure that all personnel came through an agreed competency based behavioural and technical framework (Implemented by HRSS) ensuring the behaviours and values required of the personnel recruited were being maintained.
Mass recruitment using only one recruitment consultancy (HRSS) – learnings:
• Meant that initial screening of candidates was consistent – looking for alignment with Client values and culture was done by the same person/business. Crucial in initial stages especially when establishing the senior leadership team as it is much easier to reciprocate!
• Cost effectiveness of this approach was demonstrable.
• Took burden away from the Subcontractors – who were already negotiating their contract price, getting into an NEC3 subcontract, planning mobilisation and buying equipment.
In Summary:
1. HRSS had been recommended as they had proven success in delivering for another Tier 1 Contractor on a large scale in 2016/2017 where they had successfully recruited over 250 personnel within 12 months.
2. HRSS delivered on their commitments and quickly assembled the senior leadership team who in turn were the hiring managers for their direct reports ensuring candidates with the right behaviours and values were being hired across a multiple of functions. This was a contributing factor in keeping labour turnover low.
3. HRSS recruited 240 personnel within 7 months whilst ensuring labour turnover was as low as 3-4% by ensuring they didn’t compromise or take short cuts in any of the selection processes they established. Every candidate went through an initial robust telephone or face to face screening process before attending a competence based interview.
5. The client would be happy to recommend HRSS to any small or large scale recruitment requirements as they have been extremely impressed by the high calibre of staff who are delivering an excellent 8 year contract for the Nuclear New Build.
Commercial Director of Tier 1 Contract for the Nuclear New Build (May 2019)