FEATURE / PEOPLE AND SKILLS
FEATURE
A WORKFORCE IS NOT JUST the people you directly employ,” says Peter Cheese, CEO of the UK’s institute for the HR profession, “it is also your consultants, contractors and strategic partners – they are all part of your business’s ecosystem. As such, organisations should use workforce planning to examine the mix of skills and capabilities they need across that entire ecosystem and how they can best manage and motivate all the individuals in it. The head of the Chartered Institute of Personnel Development (CIPD), who has recently published a book called the New World of Work , says companies are becoming increasingly reliant on the skills and capabilities of suppliers and partners to supplement that of their own staff. “There’s been a growth in outsourcing and strategic partnering over the past 20 years, because as the world gets more complex there's no way most organisations can deliver everything themselves,” says Cheese. “Businesses have to focus on their core and distinctive competencies and work with others to collectively deliver on their mission. We’re only going to see more of this but often organisations haven’t thought about all the elements of their workforce in a truly holistic sense.”
It is also becoming a lot clearer through the pandemic that organisations have a duty of care and responsibility to all the people who work for them, in whatever capacity or employment relationship, he adds. Legally, definitions and rights of contractors and workers are being clarified. ‘Gig’ workers being a case in point, such as the changes made to the UK’s off-payroll working rules, sometimes known as the IR35 regulations covering independent contractors. Cheese suggests organisations ensure suppliers – individuals and firms they hire in to work for them – are aligned with their objectives and culture, and ensure expectations are made clear. He says that while organisations typically put in a lot of effort when hiring their employee workforce, too often contractors are brought in with minimal due diligence beyond their technical or job specific experience. In addition, he says businesses should consider what training may be required to achieve the best value from those it recruits who sit outside their organisation to help them align to it.
Evaluating outcomes
A key shift in business thinking, says Cheese, is to look beyond people only as a cost or expense. “The way we value business is still all about the very tangible stuff: costs, income, net profit, but that doesn’t account for the majority of its market value. It may be hard to measure the knowledge and experience of people, but both are fundamental to how any business delivers its purpose and outcomes. Supporting people properly, good people management practices, encouraging inclusive workplace and organisational cultures, and investing in them, all contribute to maximising the value output of our people in any organisation. We are all looking now for better ways to measure and understand these intangibles.” Cheese recommends that procurement and HR professionals combine the strengths of their different skill sets more. Not only are many human resources being ‘procured’ alongside other goods and services, but the disciplines of procurement around business case understanding, supplier management, and commercial and legal experience all are part of what is needed across the whole workforce. He says some sectors are better at this – particularly those that involve project management, such as construction, which has to “account for everything”. There, they look forward before a project begins and back once it is over. (See A14 Skanska case study).
Workforce planning
Varying demand and business needs mean it isn’t possible for organisations to directly employ all the competencies they require. Where organisations realise they lack internal capability, Cheese says they have the choice to “buy, build, borrow or bot”. In other words, employ people with particular capabilities; develop them internally; temporarily hire them in; or automate a piece of work. They will likely need to deploy a combination to create the blended workforce they need. What’s important, he says, is to consider all the elements holistically. The contingent workforce, for example, is often treated tactically but they may be a critical part of your business. In this case they should be included and support your organisation’s values, ethics and understand what you’re trying to achieve. “Sometimes they are literally or physically left out of the room, yet they also need to understand where the organisation is going and their part in it,” he says.
VALUING PEOPLE
Organisations should consider the vital capabilities provided by suppliers as part of their overall workforce and improve their own relationship management skills.
THE SKILLS OF THE PROCUREMENT AND SUPPLY TEAM SHOULD MATCH THAT OF THEIR ACCOUNT MANAGER COUNTERPARTS ON THE SALES AND SUPPLIER SIDE.
Training and development
One skill that requires more time and investment is procurement’s ability to get the most value from strategic supplier relationships. →
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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