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How to secure business engagement and ROI when procuring HR services

Posted by Travis O'Rourke, Vice President - Client Solutions on Friday, Feb 10, 2017

Hays US Blog: How to secure business engagement and ROI when procuring HR servicesNo business function operates in a silo, and procurement is no exception. It’s not news that internal relationships are key to delivering strategic and savings objectives, but still many procurement professionals find it tricky to know where to start, particularly when it’s the first time an organization has explored a particular procurement solution.

Following review of recent tender exercises, we launched our HR Services Procurement Best Practice Survey to benchmark the different approaches to procuring these services, so we could better understand how to meet the challenges our customers were looking to address.

As a provider of outsourced recruitment services our survey has helped us establish the capability and importance benchmarks for the key stages in the procurement of outsourced recruitment services. This allows us to engage more fully with buyers and end users to share these findings and apply the learns to improve the design and procurement of our services, so that together we can maximize value for money and deliver an enhanced level of business benefit that drives ROI faster.

In this blog, and others to follow, I'll be covering key observations from these benchmarks. The survey explored levels of business engagement from the outset, as I see this as key to defining what success looks like in terms of the key dimensions of cost, quality, efficiency and risk.

Enlisting a range of perspectives from the outset avoids barriers later on

Possibly the biggest single mistake that I’ve seen when organizations are considering an MSP program is not fully understanding the different needs, and current state of resourcing, across the diverse set of stakeholders who will be receiving the services once they go live. To overcome this Hays have developed a consulting toolkit, which explores the needs, wants and priorities across the business. We then consider a phased approach to meeting everyone’s needs. Failing to complete this stage often results in a generic specification that doesn’t address the niche requirements for more complex areas, and creates avoidable barriers late on in the adoption of services.

Analyzing your spend data is still the best way to estimate spend and usage

Often the key challenge for procurement professionals looking to enter into a MSP service for the first time with an organization is understanding the key spend, and population size of the non-permanent workforce. After all, if getting data was easy then the controls that an MSP enables may be required. You’ll require access to operational as well as spend data and this exercise often involves painstaking analysis of spend reports using the time honored line by line review and classifying spend by knowledge of supplier names and ‘gut feel’. This generally identifies 80% of the spend and can never account for those incorrectly coded spend items, or those deliberately hidden. Working with an MSP provider under NDA can streamline this process and make the heavy lifting and data analysis a far easier process.

Bring your internal champion into discussions from the outset

Hays' experience of operating MSP programs around the world has demonstrated that there is nothing worse than a soft launch of a spend management program and frequently attempts to introduce an MSP for non-permanent spend without an appropriate mandate or at the very least strong stakeholder engagement are far less successful than they could have been. Maximizing the immediate benefits of an MSP and achieving the long-term Return On Investment can only occur when internal adoption is strong.

The presence of an Internal Champion who is prepared to add their political weight to the adoption of the programs makes a significant difference. Our studies have shown that the full benefits are realized four times faster with a good internal champion in place.

A structured approach can deliver sustainable, long term change

My advice for ensuring business buy-in and ultimately success is simple. Firstly, get senior engagement from the outset to sponsor the changes required by the program. Secondly, ensure you canvass different perspectives from across all of your non-permanent workforce users so that their needs are understood and they are bought into the model that you procure. A well scoped MSP program will deliver significant benefit to most organizations and getting these very early stages set up correctly is the difference between delivering a short term tactical gain versus a long term sustainable change to your sourcing channel.

Business engagement is just one section of our benchmarking survey, in future blogs I'll be exploring other areas such as defining your scope and creating a business case. I hope you find them valuable, and if nothing else a timely reminder that whilst maximizing ROI takes time, investment and effort from all parties involved, it is an objective which we both share and looking at ways we can be more effective can only benefit both parties.

To see how your approach to procuring HR Services stacks up take part in our survey.

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