Who Should Own Contingent Workforce Management – HR or Procurement?

With the latest data from Statista showing an estimated 1.44 million temporary workers in the UK in May 2024, it’s evident that managing a contingent workforce requires thoughtful consideration and clear communication across any organisation. As more businesses adopt an agile workforce combining both permanent and temporary workers to respond to changing talent demands, having robust and efficient processes is more important than ever.

In this context, the question arises: who should own contingent workforce management? Should it align with traditional hiring and management in HR, or treated as a series of processes and contracts fitting within Procurement’s portfolio? Both HR and Procurement have distinct skills and expertise they could bring to the role, but each also has blind spots that may create risks.

Team HR

Traditionally, HR leads on strategic workforce planning, including managing the skills agenda for the company. HR’s expertise in talent management, hiring processes, and employment law compliance makes them a logical choice for overseeing contingent workforce management.

Pros:

1. Talent Management Expertise: HR excels in acquiring, developing, and managing talent, ensuring that contingent workers are well-integrated and productive.
2. Compliance and Legal Issues: HR is familiar with employment laws and regulations, which is crucial for maintaining legal compliance in worker classification and other areas.
3. Cultural Alignment: HR can align contingent workers with the company’s culture and values, fostering a cohesive work environment.
4. Employee Engagement and Retention: HR can implement strategies to engage and retain contingent workers, enhancing productivity and reducing turnover.

Cons:

1. Cost Management Limitations: HR may lack the specialised skills required for negotiating contracts that deliver value whilst maintain supplier commitment.
2. Vendor Management: Managing external staffing agencies and suppliers may fall outside HR’s core competencies.

Team Procurement

Procurement’s primary function focuses on securing value through pricing, contractual terms and conditions, and supplier relationships. This focus on value makes them a strong candidate for managing contingent workforce agreements.

Pros:

1. Cost Management and Efficiency: Procurement excels in negotiating supplier contracts and ensuring the organisation gets the best value from its contingent workforce suppliers.
2. Vendor Management: Procurement has experience managing vendor relationships, essential when dealing with staffing agencies.
3. Contractual and Compliance Oversight: Procurement is skilled at managing contracts and ensuring compliance with vendor agreements and performance metrics.
4. Risk Management: Procurement is adept at identifying and mitigating risks associated with third-party vendors.

Cons:

1. People Management Limitations: Procurement’s focus on contracts and costs can overlook the human element of workforce management, including engagement, productivity, and alignment with company culture.
2. Limited Talent Strategy: Procurement may not be as equipped to handle the strategic elements of talent management, such as workforce planning and employee development.

Managing a Contingent Workforce Requires Collaboration

The best way to manage a contingent workforce is through collaboration between HR and Procurement. Both departments have clear strengths, but they also have blind spots that complement each other.

Integrated Approach:

1. Shared Responsibilities: Define clear roles for HR and Procurement, with HR focusing on talent-related aspects and Procurement handling vendor management and cost efficiency.
2. Cross-Functional Teams: Establish cross-functional teams to ensure effective communication and collaboration between HR and Procurement.
3. Unified Strategy: Develop a unified contingent workforce strategy that aligns with the organization’s overall business objectives.
4. Technology and Data Integration: Use integrated technology platforms to provide visibility and data sharing between HR and Procurement, enabling better decision-making and performance tracking.

By working together, HR and Procurement can eliminate rogue costs, establish standardised pay, and bring in high-quality individuals who deliver value to the business. A truly collaborative approach ensures that all aspects of managing a contingent workforce are covered, from the strategic management of talent to the efficient negotiation of supplier contracts. This synergy leads to a more agile, efficient, and productive workforce, ultimately benefiting the entire organisation.

Contact Omni today to discuss your contingent workforce requirements and how our MSP solution can help you.