This current period of instability and uncertainty has come as a bit of shock to our industry, with many sector analysts taken by surprise by the speed of the oil price drop and the market reactions to it. During this period of contraction in our sector, companies are looking for obvious cost saving strategies. With manpower costs being a large element of a project’s cost, businesses often look to cut costs in these areas, both in staff and contract roles.
Cutting costs does not always have to come from losing people, as many companies have spent several of the last few years building up their talent attraction and retention strategies. When demand for people increases, companies will have to reverse their current strategies and work on attraction and retention to get their projects back on track. There are a number of strategies that can be applied to control overall manpower cost, working with your manpower and recruitment suppliers.
Consolidate manpower supply base
Many companies use multiple agencies to supply contract workers, either in specialist sectors or in geographical locations. This has led to complexity in the supplier base which can be difficult to manage, especially for central corporate contract holders.
One strategy to consider is consolidating suppliers and appointing just one supplier, with one set of terms, through one contract holder which can deliver exceptional cost and time savings. This type of strategy can often strip out the complexity of global working and give one point of contact for the entire supply of contract workers. Working with one supplier does not mean that service levels are diminished, it is quite the opposite; one supplier will often utilise several secondary and / or specialist suppliers. This leads to an increase in the level of service and an ability to supplement where different skillsets or volume are required.
Market intelligence (including contractor rate benchmarking exercises)
Transparency of contractor rates and knowing the exact and correct levels can control costs through management information of global pay rates, providing transparency across the business. This type of transparency can be delivered by one supplier, who can have the knowledge of both the local and global markets, especially in this time of uncertainty.
Regular benchmark rates can be used in this way for hiring managers to have an understanding of a benchmark rate on the ground, in order for them to control costs at the very start of the recruitment process.
Retention of skills – Flight Risk Model
Knowing the market is a key skill for any business and utilising a global recruitment supplier with a global footprint allows companies to access independent knowledge to who’s doing what and what projects are ramping up or slowing down. Being aware of this type of market intelligence informs companies of the possibilities of skills shortages and/or timings of increased demand, helping with workforce planning.
Companies must include this type of external knowledge and understanding when developing initiatives to retain their top talent, which is even more important in today’s market climate. Independent and outward focussed information can supplement the work being undertaken within organisations and should cover all types of workforce planning for a project, including staff and contract workers.
Managed Service Solutions, Process efficiencies and Technology
Technology and the application of technology is the key to delivering time saving efficiencies and cost savings. Suppliers of Managed Services have the ability to bring in specialists with experience, allowing the whole recruitment process to be managed externally; in addition this allows oil companies to concentrate on their core business. The key to this successful application of technology is engagement with people involved in the recruitment process. This involves such things as online signing off of open vacancies, online timesheets, expenses management and management information on all the data from the entire recruitment process.
Using compliant and stable business partners
In times of uncertainty it is important to use suppliers that have an understating of how to operate in complex environments, especially taking into account the global move to localisation in many oil producing countries. Having suppliers that operate in a compliant way can safeguard companies from the legal ramifications, such as incorrect management of worker and / or company taxes that can happen when using less experienced suppliers.
It is also important to make sure that recruitment suppliers can support manpower solutions into the future, and the best way to safeguard against this is to only use established and stable suppliers that can sustain operations in periods of slowdown.
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