Without Procurement/HR Collaboration, Higher Ed Misses Cost Savings and Faster Fulfillment

My team and I derived many valuable insights from attending a recent event focusing on procurement trends in higher education. We learned a great deal about the dynamics surrounding contingent workforce management challenges facing the higher education industry. This blog focuses on the struggles with procurement of contingent labor and some potential solutions we developed after careful consideration of the dynamics in play.

The common thread among all higher education procurement leaders we encountered could be boiled down to the following statement, “Although we (procurement) are aware of the numerous risks and critical cost considerations inherent in the management of contingent labor, procurement doesn’t own the responsibility of contingent workforce management—HR does.”

This got me thinking about the issue of contingent labor business process “ownership” within any hiring organization. This back and forth between procurement and HR is truly a universal point of contention and has long been debated in all business sectors, not just higher education. In fact, it is an issue that I recall as a session topic years ago at SIA’s Contingent Workforce Strategies summit. So, I began to formulate some ideas and strategies to help nextSource’s higher education industry procurement leaders “co-create” and absorb the lessons learned from their counterparts in other commercial sectors, some of whom have already grappled with this issue.

Here are some recommendations my colleagues at nextSource and I  have developed to help higher education organization develop the collaboration between HR and procurement critical to successful use and utilization of contingent labor.

Collaborate: Start with meetings between procurement and HR wherein the former is provided context to better understand the goals of the latter. Understanding HR’s overall strategic goals, and how they are evaluated for meeting those goals, is not only a good way to begin a relationship, but also enables procurement to align a contingent labor strategy that helps HR meet those goals.

Procurement must illustrate to HR how recent trends in contingent labor yield significant benefits when managed more centrally, and the beneficial role such practices play in HR’s broader strategic talent goals for the year. HR should explain to procurement the thinking behind how they handle engagement with resources such as adjunct instructors and how they tap alumni to fill certain roles. This will enable procurement to begin thinking about better ways to manage compliance while supporting, not hindering, the business needs for this unique talent.

Procurement should come away with better insight into why HR pursues a contingent labor strategy and understand there is a strategic imperative at work. It is not simply a nuisance born out of convenience; rather, it is a critical element of a cost effective and efficiency-boosting workforce strategy.

With the improved understanding fostered by these meetings, procurement will be better equipped to share their insights with HR regarding risk mitigation and cost savings strategies informed by a fuller understanding of HR’s drivers and strategic goals.

Continue the Communication: Make an intentional decision to not operate in silos. As the contingent labor plan is formulated, include all stakeholders early on in this process. This results in a better solution design, and adoption. Applying an approach of mutual understanding and the unfettered sharing of insights between each department lays the groundwork for a successful, cross-functional stakeholder group. Higher education can certainly achieve the same levels of success in contingent workforce utilization exhibited by their counterparts in the commercial sector. The results are well worth it: 4-10% savings in the first year, and 21% faster fulfillment.