Entwining Procurement and HR

The tipping point has been reached for the increased collaboration between HR and procurement -- but creating value is not as easy as bringing the teams together. A strong relationship starts with a foundation of mutual understanding and respect for one another's competencies.

The worlds of human resources and procurement have become increasingly entwined as the greatest cost to most organizations these days is that of human capital. To better manage this important and complex resource, HR and procurement professionals have had to collaborate and strategize more than ever before.

The traditional procurement organization has evolved into a "sourcing and procurement- service organization" or strategic sourcing organization." This elevated, more-strategic function of procurement is working closely with HR now more than ever before.

Sourcing professionals usually handle the high-value, high-risk, high-reward and highly complex types of purchases (mainly focused on services or specialty items) while procurement is focused on the operations side ("procure to pay" and "invoice review and recovery").

The trend is clear and is likely here to stay -- more HR services are now purchased with sourcing and procurement departments used as an intermediary. To be effective, HR and procurement teams must understand how to unlock value from one another by building a relationship that helps generate efficiencies and, ultimately, more effective acquisition of talent and other HR-related services (i.e., healthcare insurance) for their companies.

The Tipping Point

No longer new to one another, HR executives and procurement professionals are at a stage where their partnership has reached a certain level of maturity. HR executives -- once used to managing their own supply base, developing relationships with vendors and negotiating their own deals -- are bringing their procurement counterparts to the table.

Likewise, procurement teams are striving to add value and show that they are not just a formality that needs to be managed in the purchasing process.

Creating value is not as easy as bringing HR and procurement teams together and asking them to collaborate. The teams must establish a strong working relationship that starts with a foundation of mutual understanding and respect for one another's competencies.

Here are five ways HR and procurement teams can best collaborate to unlock their combined value:

1. Speak the same language.

Anyone who works amongst peers of the same discipline every day has a tendency to speak in their own language. To set clear objectives and manage processes effectively, HR/procurement teams must understand one another clearly.

Avoid HR/procurement- speak and, in instances where it's unavoidable, explain what terms mean. If you don't understand what something means, ask. For example, if the procurement team is discussing "aggregation" (combining buying power in specific categories within the various business units within a company), it may not be a familiar term or idea for the HR executives with whom they are working.

It would be important when discussing aggregation to be sure everyone in the room understands the concept so that they can provide input on where aggregation would be optimal.

2. Trust and value one another's expertise.

Procurement and HR teams must engage with one another without one side trying to dominate the other. Both parties must come to the table with the understanding that the ultimate objective is to meet the business goal (i.e., secure the right talent and HR services for the company's needs) and that, in partnership, they will deliver a more valuable solution.

Without this foundation of trust and respect, working together toward that end goal becomes increasingly complex and tedious, which can create detrimental results.

3. Remember your soft skills when establishing your partnership.

HR procurement is an area where a hard-skills approach must be balanced with a soft-skills approach. The procurement team must position itself as a strategic partner to HR, guiding the department in the direction it recommends vs. "taking over" negotiations or vendor relationships.

HR must remember that procurement's agenda isn't necessarily contradictory to its own, and should be open to other ideas and recommendations. Having a candid dialogue and leveraging the expertise, experience and knowledge of both parties will lead to a more effective solution for the company.

4. Create a consistent approach to vendor relationships.

Uniting HR and procurement has provided companies with a single view of their supply base, rather than each HR specialty knowing only about its own suppliers. This can lead to cost efficiencies due to scale/scope of services provided to the overall organization. However, most organizations that have procurement teams still have a large portfolio of HR services providers to manage.

Creating a consistent approach to vendor relationships not only helps the vendors come to expect a certain working relationship with your company, but can help ensure consistency in management of that relationship between procurement and HR as well.

A consistent approach to managing and negotiating with suppliers can eliminate gray areas between HR and procurement during the process, while also helping to generate efficiencies throughout the partnership.

5. Bring services purchasing expertise to the table.

HR procurement is vastly different from materials purchasing. Service purchases are more often based on relationships and are not returnable. Bringing a pure cost-savings mentality to HR procurement can hinder an HR/procurement team's relationship from the onset; value, not cost savings, is the ultimate goal. Staff quality and agency service levels are just as important as generating cost efficiencies.

At the end of the day, clearly defining roles from the onset and throughout the decision-making process is critical to a combined HR/procurement team's success. Who makes the final decision? Who has the lead on the decision timeline? Who is in charge of the process? Those organizations that get it right stand to improve in their efficiency, value and risk management.

Those organizations that allow ineffective procurement/ HR relationships to continue are missing a great opportunity to unlock value in their human-capital strategy.


[About the Author: Bernadette Kenny is chief career officer and senior vice president of human resources for Adecco Group North America. She is responsible for the human resources functions for Lee Hecht Harrison, Ajilon Professional Staffing, Ajilon Consulting and Adecco General Staffing.]

Is the Talent War Over?

Even in lean times, that elusive top 10 percent is not so easy to come by

By Elliot Clark

Is the war for talent over? Let me help all the doomsayers, naysayers, and soothsayers: No! The war for talent is not over. I have seen this sneaking into the press and economic conversation of late. We have seen more than 10 recessions and one depression in the last century, and during this time the “war” has been building.

Until McKinsey published its seminal study, “The War for Talent,” we had no catchy name for this phenomenon. Throughout the industrialization and the later shift to a service-based economy, specialized skills have been sought after. However, as we face the next recession, rising unemployment levels lead to another round of prediction about a truce in the ongoing battle for the best and the brightest.

To be fair, MBA salary growth has slowed, hiring is soft, and layoff reports mount, but hiring managers, CEOs and CHROs all know that even in an economic downturn, all companies are seeking the top 10 percent of the talent market in any specific job family. Arguably, productivity per employee is more important when the labor force reduces in a company.

The labor market is a cruel example of the march of time and the force of change. Twenty-five years ago, the most advertised job in the U.S. was keypunch operator. As computers shifted away from paper cards, this skill set vanished. Was this an end of the war for talent? No, it was merely a shift into other technology-driven careers.

In this article, we examine the world of pre-employment screening. Are these companies facing hard times as hiring goes soft? Yes, the transaction level will diminish, but their clients will still need to hire and will insist on pre-employment screening as a way to sift through the greater throngs of job seekers and identify the very best. For service-based companies, compensation is the largest line item in the budget, and this is true for some manufacturing companies as well. Pre-employment screening protects your human capital and production capital from the bad actors you may have hired.

Once again, the RPO industry will be affected by the clients’ uncertainty in predicting hiring volumes, but there is no probability that clients will suddenly drop their hiring standards. In fact, those of us who have lived through a recession have learned that hiring managers become pickier in lean times.

In every recession in the past 40 years, large companies shed employees in layoffs. A percentage of these disgorged employees start small businesses that begin to hire available talent. This process, in essence, allows small business to rescue the economy in a way that large companies cannot. The best and the brightest tend to be the business founders and do not reenter the big company labor pool after the recession. It becomes critical for companies to use good performance management and retention techniques to attempt to preserve this layer of talent rather than let it leave. It also becomes imperative following the recession to get as many back into the company as you can afford, identify, and recruit. The boom after a slowdown is always a scramble for that elusive top 10 percent. So, no, the war is still ongoing.

So while the next few quarters may be soft for screening and RPO companies, selectivity never goes away and the competition for the best players will be unabated. The War for Talent, regardless of what you may be hearing, is not ending and it probably never will.

Job-Search Efforts After a Layoff.

1 in 3 May Sabotage Their Job-Search Efforts After a Layoff
According to Right Management research, one in three people may sabotage their job-search efforts by acting with haste after a job loss. Right Management is a provider of integrated human capital consulting services and solutions across the employment life cycle.

Two-thirds (66 percent) of 1,029 survey respondents recognized that people who are displaced from their jobs should initially take time off to re-evaluate and develop a plan. Thirty-four percent indicated they would immediately jump into a job search, potentially sabotaging the very goal they set out to achieve by being unprepared and reactive.

"You should avoid rushing into the job market," cautioned Douglas J. Matthews, president and chief operating officer of Right Management. "Don't panic. Take time to think about what you want to do next in your career. You may wish to explore career possibilities such as changing functions, industries, or even a range of work-life options such as part-time employment, entrepreneurial and retirement alternatives."

Matthews recommends what NOT to do immediately after a job loss:

1. Don't make calls and send e-mails to networking contacts asking for job leads.

2. Don't contact recruiters, respond to ads or post to Internet job boards until you've carefully reviewed and updated your resume, set clear goals and developed a plan.

3. Avoid making negative comments about your previous employer. Try to project a positive attitude.

Matthews offers this advice to employees facing a new job search:

1. Take time off to reassess your career and determine what you want to do next. Immediately following the loss of a job, many people are not completely prepared, are still too emotional and have no comprehensive plan to launch an employment search. Assess strengths, identify goals, focus on the future and create an action plan before moving forward.

2. Continually build and maintain professional relationships in your network. Successful networking means gathering and sharing ideas and information. A helpful attitude and a genuine desire to be a useful contact or resource for others will make you a valuable connector. Right Management research shows that more than 50 percent of new jobs are found through networking. Leverage online professional networking to expand the reach of your traditional network.

3. Be prepared. Most employees can typically expect to be displaced from their jobs at least once during their careers. Keep your resume up-to-date. It should describe you at your highest level of accomplishment, telling the story of your career, how you can help contribute to an organization and provide solutions to their needs.

Technology-Over the Top!!

Technology may have made things easier for recruiting managers, but it s beginning to show its evil side as managers go overboard with it... .....

• Technology is a tool that can be used to aid the recruiting process
• Technology cannot replace human touch and therefore cannot be used to build relationships
  

Technology has indeed been a blessing. The reaction time to any problem has been slashed over a hundred times and leaders, managers and the worker fraternity in general is more connected now than ever before. However , like all good things, the positive streak of technology too can fade if it's taken too far. Critics who play down the role of technology, have always condemned the way technology has eroded the personal touch among people. In addition, they blame it for the way managers use it for the sake of speed and not quality. Amidst the brickbats, technology has emerged as a force to reckon with and has undoubtedly redefined the way business is done.

Technology is secular. It has touched every aspect of business however little it may be. And the human resources function is no exception. In fact the role of technology in the arena of staff management has been incredible and today the function has become completely technology-driven. The function right from the recruiring stage to the exit interview and everything that comes in between is largely driven by technology. While this may be seen as a revolution of sorts by some, for many such aggressive takeover is beginning to take its toll on the efficiency with which the function is meant to be executed. And according to analysts the first casualty is the recruiting function.

Impersonal recruiting

A recent forum on "Technology and Its Application in the Human Resources Function", conducted at the Town's hall , at Vancouver , presented a rather scary picture of what awaits us in the near future . A few speakers at the forum unintentionally spelt horror for the recruiting function. They were rather candid about the way they recruit and the role of technology in their recruiting process. One of the speakers went to the extent of saying that thanks to technology there is no real need of meeting the candidate or even speaking to him. Recruiting managers can make their decision by simply exchanging mails !

The trend is indeed horrifying. How can one replace personal relationships that we by virtue of being humans share with everything that we come in contact with? Reducing the potency of a relationship to a mere click of a button can be damaging to the very basis on which an organisation is built . If every recruiting manager were to select recruits on the basis of the mails exchanged then the concept of a "competitive edge" or a "differentiating factor" will not be there at all since everybody would be doing exactly the same thing. Moreover in such a technologically- intensive scenario , the need for any other staff management initiative too would seem redundant as people would barely interact personally and even if they did it would only happen in case of a system crash.

The scenario can be nerve- wrecking and therefore it's time recruiting managers wake up and understand that technology is only a tool and it can by no standards be used to replace relationships.

Focus

Do not stray. When recruiting managers lose perspective of the core issue , the entire exercise fails. In this case, recruiting managers must understand that recruitment is like sales, and they are the salesmen. Their main job therefore is to sell the job And sales is a process that needs human interaction. Hence handing over this process to technology can sabotage the defining purpose of the activity and therefore may not give the desired outcome. Understanding that technology is a mere tool to accomplish the objectives of the sales activity, which is recruiting in this case would help recruiting managers keep technology in its right place.

A typical sales activity needs four basic pre-requisites for its success. These include:

• Establish and nurture a relationship
• Identify customer needs
• Strategies to overcome difficulties in meeting the needs
• Complete the sale

Each of these factors is relevant even as we see recruiting as a sales strategy. Hence recruiting managers must use technology in the third stage where difficulties hampering the activity need to be overcome by use of means that are both time and cost-effective.

Understanding how technology can aid the process of recruiting will help recruiting managers maximise their efficiencies. However, if they let technology drive the process then the intended benefit may fizzle out and the process efficiency would be affected adversely. The best solution therefore would be to integrate the benefits of technology with the recruiting process in a way that helps maximise its efficiency.

Ref:TheManageMentor

How to Retain Talent in India

Over the years, researchers have proven that when it comes to retaining employees, money does not buy happiness. Most human resources professionals know that while workers welcome pay raises, the boost in satisfaction that comes with extra money typically does not last, nor do raises alone keep employees loyal. So it is too with recruitment: Competitors can lure employees away from other companies by offering better compensation, but the glow of more money wears off quickly without other rewards. Yet if research shows that attention to pay and benefits is necessary but not sufficient to retain talent, why do many corporate leaders continue to use compensation as their primary retention tool? And what should they really do to keep their best people?

This is a particularly urgent question in emerging markets such as India, where both local and global employers are clawing for talent. In 2007, a team of researchers from Villanova School of Business and from Right Management, a human resources consulting subsidiary of Manpower Inc. that is based in Philadelphia, Pennsylvania, embarked on a project to learn more about the nonpecuniary rewards that drive employees to stay with a company or to flee. They chose the booming Indian labor market and examined the talent management practices of 28 companies operating in India; the researchers surveyed 4,811 of those companies' employees about their attitudes toward their employers, including their intentions to stay or leave. Jonathan P. Doh, Stephen A. Stumpf and Walter Tymon of the Villanova School of Business, along with Michael Haid, a global center of excellence leader at Right Management, describe the team's findings in a July 2008 working paper, How to Manage Talent in Fast-Moving Labor Markets: Some Findings From India. At Villanova, Doh is the Herbert G. Rammrath Endowed Chair in International Business and an associate professor of management and operations, Stumpf is the Fred J. Springer Chair in Business Leadership and a professor of management and operations and Tymon is an associate professor of management and operations.

In India, despite salary increases averaging more than 15% annually in some industries, annual turnover rates among young professionals are averaging 15% to 30% and go as high as 50%. The explosive combination of ballooning salaries and rising attrition signals a tight market for talent that could constrain India's growth in the future. Many factors that affect turnover rates are beyond an employer's control — unfavorable demographics and the larger global economy, for instance. But of the factors that an employer can control, four emerged as most important: performance management practices, professional development practices, the quality of supervision and the company's socially responsible posture. In turn, the researchers discovered that these four factors drive two key employee attitudes — an employee's satisfaction with and pride in the organization. When satisfaction and pride are at high levels, employees are likely to stay.

The best companies drive employee satisfaction and pride by providing management support, training and professional opportunities early on, says Doh, who is director of the Center for Global Leadership at Villanova. Just how early? In the high-velocity Indian marketplace, the new employee honeymoon is so short that employers should start an employee's professional development plan on his or her first day, the authors advise. "Our findings suggest that even six months from the start date is probably too late," Doh says. "[At that point] the employee is already making decisions about whether to stay around or not.

"Those early years — from two to five — are the most difficult ones in which to keep employees and the most expensive in which to lose them. If employees don't get management support and professional opportunities during these early months, Doh says, "they begin looking around for other organizations that can provide [them]."

The study also showed that employers should target high-potential employees extremely early in their tenure and create accelerated development plans for them. "Our research suggests that … at an earlier point than people expect, it's too late," Stumpf adds.

Employee development plans alone are insufficient, however. Young, high-potential employees demand active management support. First-line managers are often not equipped to provide the kind of support that the research indicates is critical to employees' decisions to stay or go. The authors recommend that companies simultaneously invest in training front-line managers so that new employees get the kinds of managers who can help them thrive. Indeed, the research showed that management support is pivotal in an employee's decision to stay or not, Stumpf underscores.

Management support, performance management and professional development — each of which are targeted at an employee's personal contributions — contribute to both employee satisfaction and pride. A fourth variable — the company's socially responsible position and reputation — also shapes employee pride and satisfaction.

While the research is clearly pertinent for companies operating in India, Doh says managers in companies everywhere should apply the findings, regardless of whether they're operating in a high-turnover environment or not. "We're in a global war for talent," he says. "Any company interested in accessing the labor force in India or another developing country needs to pay attention to these findings." What's less obvious is that employers operating in slower markets, such as the current U.S. economy, should also heed the research. "No matter what the environment, employees care about nonpecuniary rewards — pride, satisfaction, the support of the management team," Doh says. "In slow times, it's a mistake to cut back on those aspects."

Ref: A brief synopsis of How to Manage Talent in Fast-Moving Labor Markets: Some Findings From India (working paper, July 2008) by Jonathan P. Doh, Stephen A. Stumpf, Walter Tymon and Michael Haid

Key trends in human capital- Perspective 2008

Maximizing the value of organizational resources has never been more challenging as in this phase of turbulent world economy. Evaluation of human capital policies and processes should be directly related to the business performance and financial obejctives of the organization. This is the only way people will be given due recognition and rewards that their efforts deserve changing HR function from "resource Absoring" to " Value Adding " business investment.

There are these four human capital drivers that will have the most significant influence on organization performance. They Constitute:

Leadership
Engagement
Talent management
Learning & Innovation

These drivers are closely interrelated and the inability to excel and compete in any of these drivers will result in failure in all of them. Effective leadership is essential to gain full engagement of employees. Engagement is essential if talent is to be attracted and retained. Learning and skills development will contribute to the development of innovatory breakthrough s to produce essential competitive results.

Leadership driver remains at the op of human capital agenda. In this tig,htened global business environment, demand for enhanced leadership skills is even greater. Leadership has been defined in various ways but its essentially the ability to influence people to work effectively towards the achievement of organization’s goals. Leadership in today’s business environment is increasingly seen as a shared responsibility rather than a domain of an individual. As per PWC report, if leadership of an organization is effective then its comparative positioning against its competitors would be superior.

Employers over recent years have shown increasing interest in engagement of their workforces. Research has shown a link between highly engaged employees and the bottom line results. There is also a close relationship between employee engagement and customer satisfaction.
Managing talent effectively is a competitive necessity. Filling critical roles with competent and committed people at the right time is a major business requirement. It provides a performance edge that is important for sustainable growth. The War for Talent has gained significant momentum.

The ability of an organization to innovate remains one of the major contributors to its continued sustainable economic performance. The ability of an organization to produce the innovation essential to remain competitive depends on the range of other actions its undertaking including its leadership development, its talent bank, engagement of employees, plus the infrastructure it has in place for exploring new customer offerings.

All the above four drivers are critical to human capital’s impact on an organization’s performance. It is possible that different approaches may be needed ; Identification of ‘pivotal employees’ in talent management, the concept of shared leadership, identifying more focused points of engagement for employees and building innovation requirements into all employee roles.