A debate’s been raging, with both sides entrenched with conflicting objectives and opinions. Both are certain that they have the right perspective. In many ways, both sides are 100 percent right. I’m not talking about presidential politics; I’m talking about who should run a contingent workforce program — procurement or human resources? Having spent the bulk of my career in procurement, obviously I have an opinion, too. But you might be surprised because it’s not what you think.
Staffing Industry Analysts’ data has shown that over the past several years, procurement has taken a larger and larger role in managing the contingent workforce. According to our most recent survey, procurement is in charge more than 53 percent of the time. Surprisingly, HR is in charge just 35 percent of the time, with operations, IT or finance rounding out the results.
Obviously everyone who has a stake in the contingent workforce needs to be involved. To build a strong team, you must include perspectives from everyone. But at the end of the day, one group or person needs to be accountable and lead the team.
As you’re assembling your team — for any initiative — you need to consider your goals and objectives. It’s those objectives that should help determine who should be on the team, and who should lead it. Often, program owners pursue an initiative simply because they read that they should do it in this blog or that magazine or by attending this particular conference, whether it’s implementing a managed service provider, a vendor management system or instituting a policy change. In my opinion, few mistakes are greater than that.
Are you considering an initiative because of cost savings or are you considering improving your access to quality talent? Maybe you are looking at your contingent workforce as a strong source of new employees and your high conversion rate from temp to perm speaks to that effect. Or, perhaps you have a high usage of lower skilled labor critical to your manufacturing operations and maintaining the supply-chain depth costs of that labor is important. Understanding the fundamental reasons why you are engaging a contingent workforce policy or program will go a long way towards determining who should be in charge.
Those of you whom I’ve spoken with in the past may know that before addressing any issue, we start with one question: “What is the fundamental problem we’re trying to solve?” In most contingent workforce programs, the answer is different at different stages in different companies. In the beginning, most companies have a disorganized or technically deficient environment. Contracts are often poorly negotiated and implemented. Rates are often managed with minimal transparency and very little correlation to market. This is a problem that requires a strong procurement process to resolve. Consolidating supply base and implementing operational controls as well as cost containment measures is something that is best done by confident procurement professionals, using a disciplined process.
On the other hand, if you have a more mature program or you are focused on issues such as candidate quality and have a long-term plan to incorporate contingent workforce issues into your overall labor strategy, that is certainly the purview of competent HR professionals. I have a hard time saying that disciplined and experienced procurement professionals, as excellent as they may be, have any business driving an integrated talent management strategy.
Procurement and HR have an equal obligation to manage this important category. It is also true that both units need to work together to be successful. Those are critical considerations. But when you look at the long-term trajectory of contingent workforce management and take into account that the highest evolution of a contingent workforce program is one that integrates all labor under one unified talent-based strategy, one can only conclude that eventually, human resources should be the ultimate owner of the contingent workforce. I’m sure some people may feel differently, and I certainly hope that the comments left at the bottom of this page bear that out, but in the long term, maximizing the contribution of talent to the bottom line in ways that are not related to costs or process but to policy and corporate practice are without a doubt more a function of a competent and experienced human resource professional.
That notwithstanding, there is a new breed of program manager evolving in the space. It’s a role that’s neither HR nor procurement, but a position that integrates the best of both roles. Here at SIA, we think this new role will be taking on greater strategic importance in the coming years and we look forward to a day when procurement and HR can live together in harmony.