Utility Industry Labor Sourcing Strategy Cost Analysis

Finding Quality Resources through Economically Feasible Means


Abstract

As the utility industry continues to change a more deliberate focus is given to the costs of goods sold.  The importance of finding the best labor sourcing strategy is becoming a key element of running a successful utility.  This study evaluates the three best fit labor sourcing strategies for utility craft employee work scopes from a direct wage perspective, total hourly cost perspective and finally across a recurring project scope perspective.  From an hourly total labor cost perspective the Crew Augmentation strategy is a 26% savings versus the Internal Resources strategy and a 15% savings versus the Outsourced Scope strategy.  The Crew Augmentation strategy had a project cost savings of 11% versus the Outsource Scope strategy and a 39% project cost savings versus the Internal Resources strategy.  The crew augmentation labor sourcing strategy is best aligned with the utility industry’s evaluation criteria.

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