Kate,
This is such a variable way of pricing, and very dependent on risk profile
of industry, and management expectations of service. When I was at
Rolls-Royce with David Leitch we priced anything from #35 to #150 per head
for supposedly the same service to similar parts of the business. It was a
poor benchmark for the quality of the service also.
It may be helpful to quote overall prices per capita - so customers can
compare it with other types of spend such as Canteen subsidy or laundry of
overalls, supply of uniform etc. (usually OH is less than all of these !).
We find per capita a fairly poor way of pricing if you want to make profit
(or NOT make a loss sometimes !), you are better to FULLY cost, and then
look at discounting if you believe that your full overheads need not be
applied to this contract or service.
Another risk of per capita pricing of services is that the customer can
demand virtually anything, and expect you to provide it unless you have a
Service Level Agreement that is written in volumes rather than pages. You
are better to allocate reasonable agreed resource to a service and then cost
accordingly, if the customer needs more resource, they ask, you resource and
they pay.
If you want some examples of per capita benchmark data, have a look at "Fit
for Duty ?" the Fire Inspectorate's report on OH (and really about Ill
Health retirement (costs!)) in Fire Services :
http://www.safety.dtlr.gov.uk/fire/fepd/pdf/trsillhr.pdf (635KB as Adobe
Acrobat pdf)
Exhibit 14 on page 44 has the spread of per capita costs for Fire Brigades
(for supposedly the same service) ranging from #16 to #169 per FireFighter.
This is living proof of how useless this is as a benchmark or comparator.
You should be looking at content and outcome measures, not process measures.
You would never catch us, or I suspect any other commercial provider,
costing using per capita costs - why should you ?
Geoff Helliwell
-----Original Message-----
From: This list will be of interest to all practitioners of occupational
and envi [mailto:[log in to unmask]]On Behalf Of Kate Venables
Sent: 07 October 2001 20:38
To: [log in to unmask]
Subject: OH costs per employee
Dear list - revisiting this topic - is there a way of discussing this matter
without releasing commercially sensitive information on pricing? After all,
it is important in understanding if a service is cost-effective. If we
were, say, NHS surgeons we would happily discuss the provision of surgical
services per head of population - which is costs under another name. Should
we, as a specialty, be defining what OH services are required per employee?
It should be possible to make some reasonable assumptions about what is
required for organisations with different hazard profiles and personnel
profiles. It might become rather important to do this, if we are moving in
to another recession - best wishes - Kate
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