“You can’t really understand another person’s experience until you’ve walked a mile in their shoes.”
As procurement continues to gain traction within the enterprise and manage more spend, Chief Procurement Officers and their teams must become stronger collaborators. Our research has shown that over the past few years, procurement has made great strides in improving collaboration with finance and AP and we see the results of this collaboration manifest itself in many ways.
The Procurement-Human Resources (HR) partnership is one that is much newer and frankly, not considered or discussed very often. But, it is one that will play an increasingly important role in the “future of work,” a concept that will require the capabilities of both functions to evolve beyond their traditional roles and adapt to the changing landscapes of the business world. The 2016 Contingent Workforce Management Strategy Guide: Conquering the Great Divide Between Procurement and HR (available for download here or here), provides procurement and HR leaders with the experience of “walking in their shoes” without looking like Forrest Gump at the end of the journey. Here is a preview from the report.
HR-Led Contingent Workforce Management (Putting “People” First)
The HR and human capital management (HCM) functions have undergone a resurgence over the last decade, coincidentally as the greater business puts more emphasis on “people” and “talent.” Talented workers are competitive differentiators; they improve execution, propel new ideas, foster innovation, and help businesses build a bridge to the future. The HR function has long been a proponent of “putting people first” and ensuring that the greater business acquires and develops top-tier talent, integrates that talent with enterprise goal alignment in mind, and ensures that long-term HCM strategies (such as succession planning) are in place to avoid future talent disruptions or gaps. In a corporate world where talent is such a prime factor in how a business develops its future, HR is in an ideal position to use its strengths (highlighted below) to develop organizational assets that are built on deep skills and expertise:
- HR has long been adept at truly understanding the talent-based needs of the greater organization, and often has the skills and capabilities to gauge exactly what the company needs in regards to skillsets, experience, and expertise.
- Core human capital principles, such as succession planning, learning, and enterprise training, form the foundation for how a business manages its workers. As the non-employee workforce industry continues into its talent-led future, these attributes become more critical.
- Most importantly, talent acquisition is a foundational aspect of the human resources team. Strict talent acquisition capabilities are fundamental in shaping how the greater organization engages contingent workers.
However, as much excitement that there is around the innovation and disruption in talent engagement strategies (i.e., online talent platforms, the rise of social media/networks, etc.), the hard truth is that putting people first is not enough to truly drive ultimate value from CWM programs. As the industry continues to evolve, and more and more businesses get wrapped up in the enthusiasm of a “new world of talent,” there are specific gaps in HR-led contingent workforce management:
- While the non-employee workforce industry is indeed becoming more talent-led, there is an aspect to contingent workforce management that too many enterprises ignore: statement-of-work (SOW) management. Long touted by Ardent as the “next frontier” of CWM, SOW-based projects are the biggest pieces of the non-employee workforce from worker and spend perspectives. With supplier management principles at the heart of SOW management (along with project management), this is an area in which HR lags.
- While the utilization of “self-sourcing” models (such as online talent platforms) is rapidly growing, there are still many organizations that cite more traditional sources of contingent labor as their main groundswell of talent. Historically, the procurement function holds the capabilities to manage the supplier management components of staffing vendors and suppliers, an attribute of contingent workforce management that has been in place for decades.
- Compliance has become a primary challenge for organizations today. With more and more self-sourced workers coming into the enterprise, federal and regulatory labor guidelines become even more critical. Procurement has long been a function that experiences success or failure based on contract compliance, and while independent contractor and labor compliance are varied in nature, this unit already holds the mindset that is needed to prioritize compliance in this regard.
Are you a CPO or procurement executive looking to better understand the motivations, interests, and drivers of your HR peers? Then consider reading our Contingent Workforce Management Strategy Guide (available for download here or here). This new research study examines how on-demand talent and real-time engagement are pushing the boundaries of the “future of work.” The report also provides CPOs, procurement executives, and HR leaders with a set of strategies and recommendations that will help them prepare for the “future of work,” which is, in many cases, already here.