Especially in the electronics industry, businesses have become infinitely more dynamic and competitive in the past decade. Technology has shattered the barriers to competition so that smaller, more nimble firms can now compete in same market as large multinational organizations.
Emulating the success of others can be done more rapidly than ever before. Even the smallest firm can now source cheaply from overseas, replicating bestselling products quickly. The cloud and software as a service offerings allow these competitor firms to leverage a suite of tools and processes previously only available to the largest organizations.
As manufacturing becomes more generic, many firms are seeing HR as the last true bastion of competitive advantage. “If we have better employees, we'll do a better job” is a mentality permeating across leading electronics industry firms such as Apple and Unilever.
With the marketplace as open as it is, buying cheaply is no longer the source of competitive advantage it once was. Leading firms are realizing that innovation is the key to ongoing competitiveness.
This increased focus on innovation and in turn, talent, has brought the human resources (HR) function into the spotlight in recent years. Companies, eager to ensure they are getting the best possible results for their HR dollar, are encouraging increased linkages between HR and procurement.
Many HR teams have already seen the value in involving procurement in their operations and now actively seek procurement advice and engagement when looking to attract and retain talent. In fact, the development of these partnerships is often used to exemplify procurement’s transformation from a transactional function to a strategic partner.
Below are a series of tips procurement professionals can look to utilize to grow and ensure their relationship with the HR department generates positive results.
Talk the talk
Understanding the hot issues in HR will help you collaboratively address the function's problems. Before meeting with your HR team it pays to read up. The HR landscape is constantly changing, today we see more people working from home, relationships with consultancies have changed greatly and a for the first time we are witnessing generational shift that now sees millennials out numbering baby boomers in the workforce.
Procurement teams have been criticized in the past of forcing their own language and operating processes onto other functions. To encourage engagement, try to avoid the procurement lingo. If you can express your opinions clearly and pragmatically, your HR colleagues will be more likely to understand your point of view and will see the value in your position more easily.
Explain what you can offer
Procurement's role in HR management will vary from firm to firm. However, it is important to understand that initially, procurement involvement in HR activities can be seen as a threat or as a force that will negatively impact the HR team's ability to effectively carry out their role.
However, if you spell out the benefits you can bring to the table and the problems you can solve for their team upfront, HR will be less threatened and much more likely to engage with you.
This can be as simple as explaining that you aren't necessarily chasing the lowest cost option and just want to ensure that any decision they make is covered off from a commercial and contractual point of view.
Other levers to use here include utilizing spend management tools to help HR understand where they are spending their money or using supplier management to provide an insight into how their current providers are performing. Bringing solid, actionable data to the conversation and showing how you can make their job easier will help to open the door for a collaborative relationship.
Show procurement's depth
Procurement can obviously get involved in traditional areas of HR sourcing such as the management of recruitment vendors, but we can also add significant value to other areas of HR's remit. For example, the negotiation skills procurement teams possess, can go a long way when it comes to establishing great deals on employee benefits programs such as health insurance.
By providing advice to the HR team around how to effective negotiate in these areas, procurement provides value for all employees and helps the HR function offer the business more.
Let us take care of the tricky stuff
Perhaps the greatest benefit that the procurement function can offer its colleagues in HR is an insight into the corporate rigor that is required to ensure their supplier relationships, whether with recruitment firms, temporary labor suppliers or providers of employee benefits, stay on track.
Procurement teams bring tools and optimized processes that provide HR staff with visibility into their operations.
Supplier management software can provide HR teams with critical statistics that will help them understand the performance of their current providers as well generating insights into the external supply landscape.
Furthermore, contract management platforms can ensure that the terms and benefits agreed during negotiations with HR suppliers are actually being put into practice across the organization.
Create an open, transparent environment
If you can keep communication lines open, there are huge commercial benefits to be reaped from a collaborative HR/procurement relationship.
By actively listening to your colleagues in HR and leveraging procurement know-how and technologies, the two functions can work together to produce creative solutions that will redefine the way the HR function operates.
Let us know how your procurement organization empowers the talent search in the comments section below.