Challenges

To assess where staff costs could be made without impact on service delivery.  The organisation was split into functional departments, each of which had previously set its own pay levels, without reference to other departments and without transparency.  Consequently, the Registrars in say Breastscreen was being paid almost $40K per annum less on average than those Registrars in Oncology  even though they were doing the same tasks, and no-one was aware of this.
(this example is not accurate to preserve privacy)

Additionally, the payroll system was not organised in way that enabled wage reporting to be granulised on a departmental level.

Background

Royal Melbourne Hospital, is one of Australia’s leading public healthcare providers.  The CEO wanted to better understand the pay-ranges across the hospital with the view to rolling out cost cutting measures.

Solution

Established a framework to assess staff as being appropriately placed and/or appropriately paid:

• Fit – What was the correct skill level needed for the role
• Cost – what should that skill level cost
• Spend – what was currently being spent on the role

which then enabled the CFO to target key areas for re-organisaton, and or specific staff for redeployment.

Data was then extracted from several systems and a method of data interrogation built to cross-apply the fit, cost and spend criteria and create a very clear picture of the overall hospitals wage disparity areas.

This is a true client case study and only the names and images have been changed for privacy reasons.

Outcome – Staff Optimisation

The CFO created a taskforce addressing matters outside the ideal structure identified by the model

Made savings of approximately $20 million during the next two years with projected ongoing savings:

• • By enforcing wage parity, roles of a similar nature were paid the same across the organisation
  • By ensuring that the roles were not permanently filled with over-qualified staff being paid higher than necessary rate