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Europe's largest HRO providers call for a new approach to 'procurement driven' tender process

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A debate last week from over 250 HR professionals highlighted an urgent need for organisations to review the tender process when selecting an HR outsourcing (HRO) provider, paying particular attention the role that procurement often plays.

The debate hosted at the HRO Today Forum Europe in Dublin was attended by a host of senior representatives from some of Europe's largest HRO providers, including Randstad, Bank of Ireland, Rolls Royce, Marks and Spencer and Capita.

They looked at major flaws in the role that procurement professionals are increasingly required to play during the tender process.

Concern was raised that a cost-driven, 'sticking plaster' approach to HRO has been adopted by some companies which will result in serious cost implications further down the line.

The attendees came up with a wish-list for procurement professional to make the tender process more effective for both parties involved:

  • Seek vital input from HR before, during and after the tender phase
  • Beware of providers that offer 'bargain basement prices'
  • Assess proposed outcomes over outputs
  • Allow colleagues from across the business to engage with the provider before the RFP process
  • Quantify the cost of hiring the wrong people

David Green, development director at Capita said: "It's not a case of working around those individuals responsible for procurement within an organisation, as they play an invaluable role during the tendering process and cost is naturally a major deciding factor.

Green added: "Instead, service providers need to have free rein to also be able to strike up a dialogue with other representatives from across the organisation and especially with those who have direct experience of the service in question. It's only through this kind of engagement that sound partnerships can be formed and, further down the line, true return on investment can be realised."

Eamonn Eaton, head of group learning and engagement at the Bank of Ireland, told HR magazine: "Building a strong relationship with your procurement team is critical in achieving the desired quality and value balance.

"Within Bank of Ireland Group, learning and procurement work together as equal partners when identifying and negotiating contracts with external suppliers."

He added: "This shared understanding of what we both need to achieve has resulted in us being able to get the quality services we require to deliver business results."

Margriet Koldijk, executive vice president and managing director, Randstad concluded: "We work with many procurement professionals who see the bigger picture and don't just go for the lower cost option on a spreadsheet.

"They get that outsourcing is a complex process, that it's a relationship and that it needs to be a decision which involves HR. Let's try and put a money saving amount next to each aspect of the decision and work out the cost benefits that way."