HR AND procurement will be in direct conflict unless someone above them drives a “best value for money” strategy which will usually see the cheapest suppliers knocked out in favour of the higher quality, but perhaps more expensive suppliers
HR AND procurement will be in direct conflict unless someone above them drives a “best value for money” strategy, which will usually see the cheapest suppliers knocked out in favour of the higher quality, but perhaps more expensive suppliers.
There are ongoing conflicts between the two functions, according to Stephen Cartwright, managing director of Chandler Macleod, since HR is dedicated to quality of hire and the impact on its client – a company’s operations – while procurement is dedicated to saving money for its client – usually the CEO.
“If HR is not given a seat at the table by the CEO – not viewed as a valuable strategic contributor – then its ability to influence this debate is limited,” he said.
“Procurement can make short-term savings by reducing supplier costs, but if the outcome delivered to operations is poor then the actual longer term cost to the business could be enormous.”
Another problem is that procurement, or even worse, an external cost cutting consultant with no skin in the long-term game, drives predetermined selection methods through standard tenders which eliminate the potential for innovation by respondents, according to Cartwright.
“Many HR problems can really only be overcome by partnering with a supplier capable of ‘buying into’ the client’s longer term strategic HR challenges and developing smarter solutions – this can’t be pitched for in a standard agency panel supplier tender where the cheapest bid wins,” he said.
If HR can involve itself in setting the minimum required quality standards as part of the tender process, then this should assist in knocking out the low price/low quality players, Cartwright said.
“Be more strategic – there is nothing like facts to sway a CEO, so being able to demonstrate that the current approach is harming the business will also be well received if a better alternative, which is fully costed, is presented at the same time,” he said.
“Be more politically active and align with influential senior managers in operations to present a united front to the CEO on HR issues,” he added.
Cartwright also noted that some companies were taking too much of a short-term approach when it came to internal hiring pressures in a externally tight labour market.
“Many are taking a short-term view, but some more enlightened employers realise that it is better to wait for the right candidate than to fill with the wrong one because they will simply be out looking again in six months’ time anyway,” he said.
“The big problem is most hiring is done based on a candidate’s skills, knowledge and experience whereas most firing is done based on an employee’s attitude, motivation and fit.”
Cartwright underlined the importance of “hiring attitude, training skills and rewarding behaviour,” or when it came to recruitment, ticking the boxes of can do (skills), will do (attitude) and will fit (culture match).
He recommended developing a focused multi-channel sourcing strategy so companies don’t have all their eggs in one basket for finding new staff.
