Capita, the outsourcing firm, has increased its cost-saving target as it anticipates a reduction of about a fifth in staff who voluntarily leave, while also increasing the use of artificial intelligence (AI).
The major contractor for the Government and local authorities, employing approximately 41,000 people globally, raised its savings target from £160m to up to £250m on Tuesday. Part of this increase has been achieved through the expanded use of AI, including generative AI, to expedite certain tasks.
This includes using AI in its contact centres and for local government clients, resulting in an average handling time reduction of around a fifth, according to Capita. Early indications suggest that the adoption of this technology has assisted in securing new customer contracts.
Additionally, Capita stated that voluntary employee attrition – when employees choose to leave the company – of about 21% will contribute to the savings target and lessen the need for redundancies.
Capita also expects a yearly hit of about £20m due to the increase in employer national insurance rates next year, but believes these costs will be offset by other savings. The company reported that revenues, on a like-for-like basis, were approximately 8% lower in the 11 months leading up to the end of November, compared with the previous year.
This was partially due to contract losses announced last year and delays in initiating two new contracts, Capita said.