HR must collaborate with procurement on contingent workforce management

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Really interesting article on an important topic and I'm glad there's a conference on it! So a few observations: 1. getting HR and procurement working hand in hand is obviously key. I'd suggest ...


Read More Jon Ingham, The Social Organization
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Speakers at ProcureCon HR spoke on the gaps in HR's capability when it comes to managing temporary and freelance workers

HR must collaborate with procurement on contingent workforce management, according to speakers at ProcureCon HR in Amsterdam, for which HR magazine is media partner.

Speaking on a panel entitled ‘How procurement and HR can propel their organisation towards total workforce management’, Tom Bissenden, global supply manager – professional services and travel at Anglo American, said that the two functions need to work “hand in hand as partners to develop solutions” for the future of total workforce management. “We need… clarity of vision and purpose for the organisation,” he said.

“Collaboration goes without saying,” agreed Madelyn Abreu, global category lead – temporary labour, professional services at Roche, adding that a common vision is key. “All parts of the business have different views of what talent is,” she said. “Talent comes in different forms.”

One attendee pointed out that when it comes to strategic workforce planning HR can’t decide whether to hire permanent or contingent labour without first gaining input from other parts of the business.

Yet, while collaboration is key, the audience also agreed that HR should ultimately be accountable for the organisation’s talent strategy. Almost all (91%) respondents to an audience poll said the total talent strategy is HR’s responsibility.

Bissenden agreed that HR should “own the space” of talent management. But he said that the “journey” is both a commercial and an HR journey, with the commercial element gained from procurement expertise. At some firms this may mean building a separate function for contingent workforce management that doesn’t report to procurement or HR, so the function doesn’t get pulled into operational tasks by either team, he said.

However, HR isn’t currently equipped with the skills to manage the contingent workforce, many procurement professionals warned. One audience member said they “don’t think HR is equipped to have that conversation” on freelancers or the gig economy.

HR looks internally at employees rather than externally, so the contingent workforce isn’t within HR’s expertise, Martin Thomas, global head of total workforce strategy at Philips, said.

“When you start to bring internal talent management into this as well then we’re moving towards total talent – at the moment it’s workforce,” he said, pointing out that there is a key difference between talent management and workforce management.

“My job title is head of total workforce strategy and we chose that title as it was about bringing HR and procurement together,” he said. “We didn’t call it total talent as for us talent refers to internal employees – which is the world of HR.”

HR's current limitations in managing freelancers and temporary workers come down to three elements, another attendee said: “Do they have capacity to do it – lots of HR people are doing operational things and need to be strategic. The second is capability – I don’t think HR people are any dumber than anyone else so they just need training. The third is commitment – are they committed to doing a strategic role or just prefer to do operational tasks?”

Also speaking on the panel was Jyothi Hartley, global head of HR procurement at Smith and Nephew. She said that senior-level sponsorship is key to overcoming the challenges of managing the contingent workforce. She said that without C-suite buy-in her programme “wouldn’t be where [it is] today”.

“The programme is spoken of at least once a week at C-level,” she said. “We’ve been able to accelerate in the past eight months something that we should have years ago – because we got the drive and sponsorship and accountability.”

“Sponsorship is right,” agreed Thomas, but organisations need to understand why their teams are hiring in a particular way. He gave the example of a survey of the biggest hiring managers across his organisation asking why they chose a particular type of worker. It found that, for most hiring managers, the reason for hiring contingent workers was because they were faced with a headcount problem.

“In the future of work, what a bonkers way of looking at it,” he said, adding that this shows there is a need for the C-suite to provide policy around when to hire permanent staff and when to hire contingent workers.

“It’s bottom-up,” added Abreu, explaining that organisations may have support from senior leaders for workforce planning, but might also have hiring managers who don’t see its importance. “When you look at day-to-day decisions you need to have the heart of every hiring manager,” she said.

When asked what HR and procurement both need to do differently on a practical level to manage the contingent workforce, Thomas encouraged organisations to get greater visibility of HR data.

“Get total visibility and bring in total workforce data,” he said. “Then speak the language of the business.”

Further reading

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HRD's pocket guide to procurement

The new outsourcing landscape: Top tips

What HRDs can learn from NHS locum panic buying

Comments

Really interesting article on an important topic and I'm glad there's a conference on it! So a few observations: 1. getting HR and procurement working hand in hand is obviously key. I'd suggest vision and purpose are the most important enablers for this, rather than the organisation, but please don't wait for the C suite to provide a policy - create one and take it to them (you want to be proactive as well as strategic). 2. In a functional organisation, you need someone accountable for having the right people working for the organisation, wherever they come from - that doesn't matter that much, but they probably need a foot in both HR and procurement, and with both functions having delegated responsibilities for their own parts. But I agree the role with accountability will probably sit in HR. I don't understand the comment that HR looks internally - recruitment is already external too. 3. But the broader point is that this article demonstrates the problem with a functional organisation. Innovating the way the workforce works, ie the organisational groups we use, is increasingly important, alongside innovating who makes up the workforce. Increasingly we're going to need to move away from functions and towards melded network organisations (more on this from me soon).


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