The relationship between procurement and human resource professionals is a vital one within organizations; however, its importance is sometimes overlooked. The differing approaches of the two positions mean they often run separately from one another with little overlap. By establishing and enhancing the partnership between these two groups, companies can decrease costs while increasing value.
Because HR and procurement departments' end goals can appear to be opposite each other, professionals in either department may find themselves in a tug of war. HR professionals may be worried that procurement only cares about cutting costs and not finding the best final product, service, or benefit. Procurement specialists may be concerned that HR doesn’t factor costs into their decisions enough, putting the company over budget. However, this friction can be beneficial to the organization when proactively managed and respectfully facilitated.
It’s important for leadership teams to help each department address these worries and help them understand the other’s viewpoint in order to create an effective relationship.
Enhancing the relationship between HR and procurement professionals means that the two departments can establish more checks and balances. Together, the HR team can guide the procurement team on what contracts and supplies would best benefit the company’s workforce, while procurement can steer HR towards cost savings, striking a balance between value and cost-effectiveness. Creating a strong relationship between the two departments can streamline internal decision-making and save both time and money in the long run.
As HR and procurement professionals work together more closely, there is an exchange of knowledge that can help each team make the best possible decisions with the other department in mind. This can help eliminate the back-and-forth that may exist in companies where the departments see each other as their opponent rather than their partner and support stronger vendor relationships.
The relationship between HR and procurement is more important than ever if companies want to negate some of the effects of ongoing supply chain issues. To proactively address the current supply chain instability, procurement professionals need to work with HR departments to help establish strong relationships with suppliers and vendors, minimizing the risk of supply chain interruptions.
In addition to strengthening supplier relationships, these teams can work together to diversify their suppliers, ensuring that there is always a backup supplier ready to go to maintain the continuity of the supply lines. Bringing in HR can help procurement professionals see beyond the price tag of vendors and place more emphasis on the human, relational aspect of these relationships.
Talent mobility and relocation benefits are an area where collaboration between HR and procurement professionals is vital, particularly since these benefits can directly impact employee retention. By working together, HR and procurement specialists can create relocation and mobility plans that both satisfy and support employees and keep costs down. The collaboration can help companies make effective mobility policies that are already in place when the need arises.
Having a strong relocation policy and mobility program in place is desirable for HR and procurement professionals alike as the quality impacts both departments. HR wants to keep employees happy and taken care of. Procurement is looking to keep down costs. Quality relocation plans do both by supporting employees through a stressful transition and saving money long term by increasing employee retention.
When HR and procurement departments create a strong relationship and work together, your company can stay on budget while providing the best benefits and workplace for your employees.
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