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HR procurement – purchasing v HR?

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More than a third of HR professionals claim they would make better HR buying decisions without any involvement from their colleagues in Purchasing, says the findings of a new report, People and Purchasing: Best Practice Partnerships, by Reed.

However, Purchasing is currently involved in HR procurement within two out of every three of organisations surveyed, according to respondents. Key HR areas where Purchasing is involved in HR procurement include the recruitment of temporary and permanent staff, followed by training, HR software, outsourcing, outplacement, payroll, pensions and other benefits.

Purchasing is already making bottom line HR savings in half all organisations, they claim, with nearly one in ten taking over £1 million off the HR procurement bill each year. Purchasing professionals predict they will take a leading or equal role in HR buying decisions in 64% of organisations over the next five years.

However, HR professionals cite concerns about how Purchasing prioritises cost at the expense of quality, restricts information, and over-values measurable outcomes at the expense of good supplier relationships.

In spite of concerns, more than one in four HR experts admit that Purchasing has increased the cost-effectiveness of HR services.

HR and Purchasing professionals see the best way forward is to:

  • increase communication – to succeed this needs to be “regular”, “two-way”, and “include interaction and dialogue”
  • increase understanding of the benefits of working together – stemming from a “mutual understanding of needs/benefits”, according to the Head of HR of one services company
  • increase understanding of the others’ skills and priorities – one Purchasing Director recommended that “purchasing time should be spent on HR training, and vice versa”
  • continuously develop – even where the relationship is already “very good”, one HR Manager underlined “the need to continue to build understanding of our different agendas (ie cost reduction versus quality considerations)”
  • clarify roles – one HR manager sought “clear parameters of responsibility”, while a Purchasing professional underlined how radical this change could be by describing how their “organisation redesign in 2003 will align purchasing and HR under one management structure”.

James Reed, CEO of recruitment group Reed, said: “It can take special commitment to establish the necessary mutual respect…both professions agree they need to continuously deepen their understanding of the other in order to deliver the best outcome.”

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