How an example company (120 employees) saved $192,000 in the first two years, decreased risk and increased flexibility using our services
Company X had a traditional HR model. They employed a mid range HR manager, who had resigned leading them to review their HR structure, and an administration support person. They occasionally brought in consultants to assist on specific projects and had never been audited.
| Costs |
Administrator |
$45,000 |
| |
HR Manager |
$130,000 |
| |
Consulting |
(Not including training) $20,000 |
| |
Total Costs |
$195,000 |
|HR Outsourcing Audit
An audit was conducted which resulted in a gap being identified. Company X was not compliant with WorkChoices, their pay slips were in breach, their time recording was in breach and their award employees were not being paid correctly for penalties and allowances. They thought because they paid over award that the award did not cover their employees.This exposed them to union involvement and backpay issues. Their OH&S systems were not compliant exposing them to fines from WorkCover and their management practices were exposing them to potential EEO claims. They did not have a 3 year HR strategy, leaving them exposed to market forces for attraction and retention of employees increasing their cost base of their business.
|Solution
Company X decided on a completely outsourced HR model. This solution involved a contract HR Officer/Consultant sourced and pay rolled through HR Outsourcing, the costs associated with the audit (two weeks) and implementation of systems and processes (a four month program), partial automation of processes decreasing administration requirement. HR strategy, Change management and Industrial Relations services were provided through the outsourced maintenance contract.
| Year 1 |
HR Officer/Consultant |
$75,000 |
| |
HR Outsourcing Audit and implementation |
$57,640 |
| |
On Line Forms and Tools |
$15,360 |
| |
Total Costs |
$148,000 |
| |
Savings in potential fines, litigation and associated costs |
$88,000 |
| |
Total Savings actual and potential |
$135,000 |
| Year 2 |
HR Officer/Consultant |
$75,000 |
| |
HR Outsourcing Maintenance Contract |
$43,000 |
| |
Total Costs |
$118,000 |
| |
Savings |
$57,000 |
| |
Total Savings 2 Years |
$192,000 |
Note: The maintenance contract provided for support from the following specialists: HR Strategist, OH&S Specialist, Industrial Relations Specialist, Compensation & Benefits Specialist, Employee Relations Specialist, Change Management Specialist.
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