Strategic Review

Client Overview

This project was carried out for a leading global outsourcer of HR services. By the nature of its business, this company had many years of outsourced services experience to its own client base and knew what a good quality and cost effective outsourcing service should offer.

Challenge

The client had a service delivery model for its Small Business Payroll customers that used twenty-one 3rd party affiliates to process its customers’ payrolls. The client had effectively lost control of this valuable customer base and believed it ought to bring control back in-house. The initial driver some years earlier to use affiliates was a cost saving exercise and many ex-employees of the client had set-up as affiliates. The client explored using its own offshore facility to process the bulk of the payrolls involved. The client was aware that, for contractual reasons, some of its customers would be unwilling to be processed out of the UK. Furthermore, as many customers had a long term relationship with their affiliates, there would be challenges in persuading them to make the change. A target or 80% was set to process offshore. The other 20% would process with a newly established team in Scotland.

Solution

A 12 month project ensued and was completed in 12 months to create a Shared Service Centre for these F&A services. Approximately 120 new employees were to be recruited offshore and put through a rigorous 8 week UK payroll training programme. A specialist training programme was constructed, covering general company induction, data protection, payroll legislation, payroll systems training and customer service skills. Additional management training was provided to Team Leaders. The overall programme was tightly managed, covering document transfer and processing, customer communication, scheduling and post transfer satisfaction surveys. Some 3,500 customers were migrated over 9 phases.

Benefit

The end result was that very few customers were lost due to the move and the client saved 60% from a cost base of £1.2m. 86% of all customers were ultimately processed offshore. The product itself was improved and standardised, as many affiliates had come to provide bespoke solutions for their customers. Operations management were also able to implement performance tracking mechanisms that meant reducing the target headcount to circa 100.