BW – So Vicki, we are nearly a year to the day since our last Q&A and I’m really keen to understand how things are going from your side of the fence. Can you start by providing an update on where you are on your “Digital Transformation Journey”?
VD-: It’s been challenging, due to there being so many considerations that are impacting the labour supply market. Brexit, Covid, legislative reform, cost of living and so much more. However, by and large, I am delighted with the progress made and I am very confident that we are ahead of the curve in terms of developing a future proof model to best manage all aspects of temporary labour supply to the Group. We have yet to complete phase 3 of our plan, which is to have a fully integrated eco system, but that is now progressing, with the support of ENGAGE and our other technology partners.
BW: That’s good to hear. So, having successfully achieved Phase 1 & 2 of the ‘Plan’, can we focus a little on what Phase 2 has been like?
VD: Sure. We applied the same methodology for the Payroll Intermediary (Umbrella) PSL – ‘Phase 2’, as we did with the Agencies in Phase 1.
However, we have never needed to dive so deep into the supply chain before, so we first needed to understand what ‘good’ looked like for an Umbrella provider and set our benchmarking criteria. We took advice from our legal and tax team, as well as specialist 3rd party providers including the FCSA. Without this process, we simply would not have been able to make the necessary steps in selection, or indeed providing a framework of governance that was respected by all our suppliers.
We then asked all our Agency PSL to provide us with a list of all their individual Umbrella PSL suppliers, so we were able to understand the landscape in our supply chain. This was important for a number of reasons: a) Providing us with an understanding of just how many Umbrellas we were being exposed to b) How many we may need to consider on our own PSL to allow a good breadth of choice for all Vendors and c) Identifying any potential issues for suppliers where they may need to change their PSL.
From then we worked out a shortlist and began our due diligence process for selection. It took us a few months, but the final PSL was agreed. We made a real effort to keep all Agencies and Umbrellas informed through the process, whether they made the final cut or not.
We then embarked on a process of ‘Onboarding’ them to the system and integrating them to the supply chain on ENGAGE. There were commercial implications, but ENGAGE worked closely with us and we had a great deal of engagement from all of our chosen Payroll Intermediaries. It was encouraging that they were all excited and keen to be part of this process, given we were breaking new ground.
BW: Sounds like a lot of work up front?
VD: It was a mini project that we absorbed in the team and were lucky enough to have good support from our partners and yes Ben, I include you in that!
It was well worth the effort, for so many reasons. We now have a complete understanding of all working practices within our supply chain, which we needed to be able to make the right decisions moving forward.
The biggest surprise through this process was uncovering the extent of the potential exposure to risks, through the volume of different Umbrellas within the supply chain, as well as the varying payment models being used. We have a very clear picture now and a robust process of audit, so we can keen this in check with the minimum amount of effort moving forward.
Time very well invested!
BW: Thankyou Vicki. Always a pleasure. So how was the onboarding of the Umbrella PSL?
As we had a very good understanding of the workflows through our initial training with ENGAGE, we were confident that this would be relatively straightforward. Honestly, it was. Relatively speaking.
We knew we were the first client with ENGAGE to use the end-to-end workflows and IR35 logic in the platform, but were confident that it would work if all parties bought into it. We therefore worked hard to ensure that everyone was included and communications to Agencies as well as the Umbrellas were clear. As a result, with the exception of a few small bumps, it all went very smoothly.
The thing that was most surprising was the manner in which all the suppliers really bought into the project and were willing to go that extra mile to make it work. This was possibly due to the fact it was something new and exciting for the market.
BW: Having been live since April 21, with all your suppliers on one platform, how has this impacted the business?
VD: It’s been incredibly positive. To change the status quo and implement systems and processes that impact the whole supply chain for the better has been a real driver for myself personally as well for the business as a whole. ENGAGE has been a big part of that, as have all our suppliers – including he Umbrellas in our PSL.
After a few months of just letting things settle, we began to create a framework for audit, so we could start to validate the data and quantify the performance of all suppliers.
This is where it began to get a little arduous to be brutally honest. We identified a number of suppliers that were behind in their admin on the platform and so there were gaps in the data, as well as inaccuracies.
However, having real time data and instant access to it makes it so easy to see where these gaps and issues are. As an End hirer, or Agency supplier, you can quickly produce a report that provides every bit of placement data, including the IR35 status, risk level, payment method and Fee Payer.
The system provides real time information with visual cues and narrative in the UI. In addition, the Placement reporting is simple and instant. This is available to all agency suppliers too, so there is really no reason for the data to be missing or inaccurate.
BW: You’ve been conducting audits of your entire supply chain for some months now. How has that been?
VD: Enlightening! I expected that it may take time for the data set to be complete and for some of the data to be inaccurate. However, having built a model that pulls together systems, people and processes in a way to efficiently audit end-to-end through our supply chain, it has amazed me at what practices have been uncovered.
BW: Really? Like what.
VD: I’m not going to expand on that Ben, but suffice to say, we are now able to check every aspect of how workers are ‘engaged’ (no pun intended) with relative ease and do so systematically every month. As such, we can spot where workers do not have the required RTW/ID documentation, tickets, qualifications, or are not being paid in the right way, for the right amount.
Our audit process is robust. That said, we do what we can to support our suppliers and give them all every opportunity to ensure that errors are corrected. However, since starting the audits in August 2021, we have had to make some difficult decisions, with Agencies and Umbrellas having been removed from the PSL and others being monitored closely
BW: How have the other suppliers reacted to this?
VD: Very positively to be honest. We have given clear advice, communicated with all suppliers at every step of the way and given all the support we can. So, we are confident we have done all we can to make this a success for all involved.
All our suppliers understand what’s expected and that if obligations are not being met, there are consequences. This has been made evident now and as a result, we have all our partners on the same page and pulling in the same direction, for the good of all.
The bi-product is that we have much improvement in the data we have, as well as smoother audit process, with less areas of risk. In addition, we have a cohesive labour supply chain from top to bottom, with collaboration between all parties in the chain. It’s been revelatory and great to be part of.
BW: So, after successful completion of Phase 1 & 2, what’s the feeling within the Group about what you have achieved?
VD: Well, as an End Hirer, our objective was to take the initiative, ensure we were not only ready for the IR35 Private Sector Reforms, but also to have something that was fit for the future of labour supply chain management.
The consensus across the Group is that by implementing what we have so far has gone a very long way towards achieving this. I am incredibly proud of what we are doing and where we are at, as is the team and the Group.
We are in regular communication with our peers and it’s safe to say that there are varying approaches in the market, but we are confident that we have a solid model to safeguard the Group and a framework that is suitable for all suppliers willing to participate in a transparent environment.
BW: What’s next for Countryside on your programme of ‘Digital Transformation’?
VD: We will evaluate where we are and continue to optimise. However, ENGAGE ‘Phase 1 & 2’ has been a great success, so we are now fully focused on Phase 3. We continue to have regular meetings to discuss how to get the best out of the system and achieve our end goal of a fully automated, digital, integrated technology stack that removes as much of the operational costs in our management of temporary labour.
Our aim is still to have a market leading risk management model around worker compliance and complete transparency with a fully engaged and collaborative labour supply chain.
BW: And finally, any advice you could offer any other businesses looking to achieve this?
VD: Take your supply chain with you, engage with them early and talk them through your vision. When they understand the end-goal and agree to be part of your evolution, you can really start to add value and make a positive change.
Things will be rough at times, as you are making fundamental changes to how you operate, but these are small ‘teething problems’ in the big picture, so strong will, focus and determination, coupled with a solid communication strategy helps keep all involved focused and pulling in the same direction.
Fundamentally, the systems and processes should benefit all your suppliers as well as internal stakeholders, so keep it as simple as possible and chose your technology partners wisely.
They must be part of the vision and journey too, so it’s really important to invest in the right partnerships – and definitely speak to Engage!
