Achieving the best outcomes for your pupils is central to every school and academy trust, so your focus is on their education and wellbeing. But, like many organisations, it takes more to run a school: estate management, technology, human resources, financial management, catering etc. Your existing staff may not have expertise or the time to cover this wider operation alongside delivering excellence to pupils.
Our previous blog ‘Insourcing or outsourcing?’ considered some basic pros and cons of insourcing versus outsourcing. It also highlighted that while value for money should be your first consideration, it doesn’t necessarily mean the cheaper of the options.
As a standalone school, with the budget of one school, your support and ancillary teams are likely to have resembled those of many small organisations – many of their members will have covered multiple part-roles and few will have been specialists. External contractors could be called upon to provide specific expertise, expensive equipment or a comprehensive package of work if and only when needed.
As a Multi Academy Trust, the deciding factors on whether to insource or outsource are probably changing. You may have started finding the growth in the central workload and the larger estate makes it economically more viable to now employ in-house specialist services. The increasing complexity of the central workload may be requiring more dedicated focus. Consistency in processes across the schools will have become more important, so more and more of your support function will have been centralised; consolidating best practice and expertise is one of the benefits of being a MAT and this applies across central functions as well as teaching.
Benefits of bringing services in-house
It is often considered that bringing services in-house will lead to cost savings and greater efficiencies. With budgets tightening, trust will want to consider whether it is cheaper to employ staff directly to fulfil a role. Having internal staff can bring a greater degree of flexibility in how staff are deployed, supporting in a number of different areas across the trust as needed rather than having an outsourced function working on specific remits.
Bringing teams in house can also enable trusts to offer developmental opportunities for staff, with new opportunities and roles within the trust. As Trust teams grow and expand, the opportunities for more senior positions and advancement can provide good opportunities for CPD for current members of staff, supporting retention and avoiding trusts having to go out and recruit new members of staff.
Having roles fulfilled by central team members can provide a degree of control that may not be possible with outsourced contracts. The Trust can work with its internal members of staff to develop its trust vision and strategy, and ensure that as it grows it has created a strong culture and values for all staff.
Cost considerations
Whilst it is often seen that insourcing can lead to greater efficiencies and cost savings, there are a number of considerations and hidden costs to consider:
- Employer on-costs: national insurance, pension contributions, apprenticeship levy.
- Holiday pay.
- Any employee benefits and perks per your trust’s policies, e.g. professional subscriptions.
- Premises overheads to accommodate additional members of staff.
- The cost of time of existing staff to provide line management.
- The cost of time of existing staff to provide training. Different grades of recruits will, of course, require different levels of training. An apprentice or intern may mean attractive wage costs as well as the opportunity to help a young person on their career journey but do factor in the cost of your existing expert staff providing in-house training, e.g. in IT, finance or HR. And how much of your training will be learning about your trust/school’s systems and ways of working, in which case who would you rather invest that training time in?
- Subscriptions, payroll fees, insurance premiums etc which are based on number of personnel.
- Investment in equipment for your in-house function, e.g. grounds maintenance – not just how long it will take to recuperate the outlay, but ongoing maintenance, storage and insurance costs.
HR considerations
Using a contractor relieves your organisation of the employer responsibilities and application of employment rights that accompany employment, so these will be a big factor in deciding whether to insource or outsource. Do your existing staff have the capacity and an appropriate level of high-level subject knowledge in the area to line manage the new recruits, to schedule shifts, organise sickness cover quickly when needed, oversee retention, etc. as well as performance manage them, or will the recruitment need to include managers too? Additional staff will mean additional payroll processing resource – the additional cost of this and per capita insurances are mentioned above.
It will take time to advertise and recruit new members of staff, although there would also be time and management associated with researching and sourcing a new external contract. Similarly, there is a risk of unsatisfactory output with both employees and external contractors.
Why outsource?
The requirement for specialist and professional expertise may remain one of the main reasons for outsourcing certain functions. The technical requirements placed on academies in areas such as finance and governance are high and can be demanding. Filling the roles that will deliver on these fronts with the right level of skills is key. Your Board may include members who can bring high level ideas and guidance to the table in areas such as law, HR and finance, but you will still need suitably qualified people to plan and deliver the actual work.
Professionals working in the central office will need the expertise and skills to not just ‘do a job’ but to advise their extended teams across the schools on technical matters, be seen as leaders to these teams and design the processes that will deliver the necessary outputs.
So, will you be able to recruit the right expertise? It can be lonely being the sole professional for a particular function in an organisation, so is it an acceptable level of responsibility that would fall to that person if you can’t afford a qualified team around them? How (easily) could you cover a temporary vacancy in that role if they leave? Some things are time-sensitive, e.g. payroll. If you used in-house staff to fulfil a function, would they have the capacity to commit to delivering on such deadlines? Can confidentiality or data protection requirements be met in-house?
External suppliers deal with multiple customers and clients. By outsourcing to them, you benefit from their constantly broadening experience as well as their increased exposure to current issues and fixes. Finally, your growing negotiating power will apply to your outsource deal too.
With so much to consider, the message remains: the value of each option is in more than just its cost.
Blog authored by Louise Shaw and Genevieve Wilson.
