What we can all learn from City Link
Launched over 40 years ago, City Link has become a household name in parcel delivery and courier services, and their abrupt exit from the UK market place is sure to have a knock-on effect for many companies in 2015. Despite this, there is much that businesses can learn from City Link and their escalating troubles, as we head into the New Year.
Incurring losses since 2007, including a staggering £26m loss in 2012, City Link have been unable to turn their fortunes around after being bought for £1 by Better Capital, a restructuring specialist.
Just before City Link was sold by Rentokil back in 2013, de Poel approached City Link, offering them our services and expertise in managing temporary agency workforces and the associated costs. Despite much discussion, City Link declined to work with us, which was disappointing because we were confident that we could introduce structures and processes that would have significantly reduced the costs of their contingent workforce.
For any business, especially those that are experiencing financial difficulty, it is imperative that every cost line is managed effectively and continually, to ensure that the potential for spiralling costs is controlled and limited. Joe Tully, Managing Director at de Poel, comments: “Whilst temporary agency labour expenditure is an area unknown to many, businesses would do well to get to grips with their usage and spend on a contingent workforce in 2015 as it can incur high costs, both in monetary terms and compliance. With tighter restrictions being placed on the industry in recent years, the avoidance of high penalties is something that companies, especially those in difficulty, cannot choose to ignore”.
This message resonates throughout many other areas of business, areas that can often fall under the radar and end up costing businesses dearly. As experts predict a string of collapses at the start of 2015, Tully concludes: “What might not seem like a priority now can become imperative later down the line, and, with companies like City Link going into administration, the importance of having visibility across all areas of a business is clear for all to see”.