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22 November 2012 | Adam Leach
Procurement professionals focus too much on getting the lowest cost and not enough on the potential damage a substandard provider could do when outsourcing human resources (HR).
At an event hosted by networking organisation SharedXpertise senior representatives from HR outsourcing providers, including Randstad, PA Consulting and Capita, shared their views on how the contracting process has been affected by procurement’s growing role. They concluded the focus has moved too strongly over to cost rather than the overall value of the outcome.
Participants drew up a list of five things that they would like to see procurement do to improve the process of contracting a provider. They advised: the internal HR department be consulted “before, during, and after the tender phase”; to “beware of bargain-basement prices”; to assess “outcomes over outputs”; that colleagues from outside of procurement should be able to engage with providers before the RFP process; and for procurement to “quantify the cost of hiring the wrong people”.
“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,” said David Green, development director – talent acquisition at Capita. “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.”
A recent survey conducted by SharedXpertise found 78 per cent of HR outsourcing providers expect the market to increase in size over the next year.