Clients often approach our temporary managed service specialists with the question “how can I reduce agency spend?”

Depending on the size of your business this is no mean feat, you need to adopt a strategic approach and get everyone on board. It may seem like an unmanageable task, but I assure you, it isn’t. There are many ways you can reduce agency spend – all you have to do is look.

Here are 6 steps on how to reduce agency spend:

1. Visibility is key 

Getting to the root of the problem is where you need to start. A data discovery exercise is a great way of doing this. Gather internal data and talk to your employees and your suppliers. By surveying all of your stakeholders you’ll gain visibility over what commission and pay rates are in place across the organisation. Chances are that they’re very varied.

2. Set commission rates 

Have set commission rates that you will use across the organisation. This will not only save money on agency spend, it will increase visibility.

3. Standardise pay rates 

Many organisations do not do this and it’s a simple step to take when it comes to reducing agency spend. Why should one administrator be on £8ph and another be on £12ph for doing the same job? Clear rates must be set! A benchmarking exercise will allow you to know what the market rates are for a particular worker, set the rate and don’t budge!

4. Be ready to negotiate

You and your staff will need to negotiate new rates with suppliers. Ensure that whoever is dealing with agencies has the ability to challenge and ensure that agreed commission and pay rates are stuck to. This is extremely important.


Strong negotiation skills are imperative when dealing with agencies

5. Only use temps when it’s essential

One person has called in sick, they are likely to be off for 2-3 days, do you really need to call in a temporary worker? Is there someone else on the team who can help out? Instill a culture whereby your employees are really questioning whether or not that they need to spend money on getting someone else in.  

6. Consolidated invoices

If you’re working a Managed Service Provider (MSP) you should be able to request one consolidated invoice- this will save you time and cost on processing a number of invoices at any one time.

Taking these steps will help you to reduce agency spend. We often carry out data discovery exercises for clients whether they would like to outsource their recruitment to us or not.

We offer to carry out data discovery exercises, producing powerful data and making recommendations so that HR teams can come up with a DIY solution. However, those who have outsourced their recruitment to us (permanent or temporary) have saved money on agency spend.

We saved St Mungo’s £830k in the first two years of the contract, halved Midway Care’s agency use in the first six months of our partnership and the savings we made for Metropolitan Housing equated to over £3M within the first 5 years of working with them.

To find out more about getting the most out of your temporary workers and how Cohesion can assist you with this, call Lee Burman now on 0121 713 6956

Or download our Temporary Managed Services ebook.