As a procurement professional, you know that these individuals have always played an important role in spend management. But the nature of your job is evolving.
As Gerard Chick pointed out in a guest post for Procurement Leaders, nowadays, the position requires less of a supportive role and more of a predictive and analytic one. You must also excel in risk management, especially in markets that are extremely volatile.
That’s because procurement is isn’t just about looking at the cost of transactions. Sure, it will continue to be a vital objective of your job, but it would not be wise to focus only on pricing when considering a new vendor. Instead, you are encouraged to take a broader approach. And when it comes to your staffing needs, you should take into account how to best source the professionals that your organization requires, and what long-term influence it will have.
Building stronger relationships with HR
One strategy is to facilitate better collaboration between your department and HR. There are a number of benefits to doing so. By partnering with HR, you get a better chance of making valuable investments because you’re able to integrate a wider perspective for finding the best candidates to fulfill a specific need in the company.
Improving the procurement-HR relationship can lead to higher ROI.
The decisions made on choosing a candidate won’t just be one made in isolation, based on pricing, reliability or quality of service. It will increase your ability to evaluate a vendor based on the opportunities that they will have for future growth in the organization. This will ultimately allow you to optimize your business’s talent management strategy.
Focus less on cost and more on innovation
It may seem counterproductive: attempting to reduce spend by turning your attention to areas aside from pricing. However, according to a group of A.T Kearney consultants who authored an article for Chief Executive, an increasing number of procurement departments are starting to look for ways to use suppliers for innovation, development and support rather than cost reductions.
The key is to consider what long term effects this strategy can have. For example, a study conducted by A.T. Kearney found that many organizations want more collaboration with suppliers and expect the value gained from supplier relationship management processes to increase. Put simply, this indicates that one of the ways to improve your procurement initiatives is to focus less on the short-term cost and more on the long-term value that a vendor offers.
However, as the study also pointed out, not all businesses possess the type of procurement professionals who are experienced in various spend categories, thus limiting their ability to make sound decisions that improve the objectives of other departments.
“Talent procurement can sometimes be more valuable when you focus less on the price.”
Reducing recruitment and retention costs
The job market can be extremely competitive, making it quite difficult for companies to recruit and retain highly skilled talent. One of the most obvious ways to attract trained workers and top-performing candidates to your organization is to raise salaries and benefits packages. However, it’s certainly not always the most cost-effective approach. You don’t have to exceed budgets or spend a fortune recruiting the best talent to your business. A more sustainable solution is to work with a consulting staffing firm. Working with one organization will make it significantly easier and more cost-effective for you to procure top talent.
Is it actually necessary to outsource talent acquisition and management operations to a third party if your company already has an HR department in-house? It depends. But, in most cases, the benefits of choosing one vendor that can bring the most appropriate and qualified candidates to you, while also managing other staffing and contract needs, much faster than a traditional HR department can is well worth the investment. When choosing a staffing partner, though, it is important to make sure that the firm specializes in a wide range of areas, such as temporary and contract workers, temp-to-permanent positions and SOW contracting.
The success of talent – as well as spend – management relies on a sound orchestration between procurement and HR. But it is also necessary that you are able to leverage the knowledge, connections and expertise of industry leaders who are able to match you with the right people and solutions, for the right price, at the right time.