Lapinlahti and Varpaisjärvi make huge savings by outsourcing

The local authorities of Lapinlahti and Varpaisjärvi have signed a five-year agreement with Pretax, the first of its kind in Finland. The financial management and payroll administration of the municipality of Lapinlahti was outsourced to Pretax from the beginning of 2006, and Varpaisjärvi followed suit in April. The financial management employees of both local authorities were transferred to Pretax.

"Outsourcing to Pretax brought us clear benefits. Pretax has taken over the routine work, and we can focus on improving our basic services. We have also made huge savings, an estimated 10% to 15% in real costs, or approximately the cost of employing one full-time person. We would also have had to replace our IT applications soon, and that would have meant investment in new technology and personnel. It is also difficult to hire local government finance experts. For all these reasons, outsourcing was an excellent solution for us," says Matti Sollo, municipal secretary of Lapinlahti.

Heikki Airaksinen, municipal manager of Varpaisjärvi, estimates that the local authority will save 11.4% on financial management and payroll administration costs over the agreement period. "We also benefit from having the largest player as a partner. Their volume in itself brings benefits and terms and conditions that no individual local authority would be able to obtain. Also, the work is never down to just one employee. Local authorities cannot afford to employ backup personnel, so no one could really be off sick, ever. In the busiest periods, our employees were really stressed with the workload and time pressures," explains Airaksinen.

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