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How Procurement as a Function Can Help the HR Team as Well

By | Prasanna Rajendran | Vice President at Kissflow

Human capital is both your most valuable asset and your most expensive expenditure. Even though managing and retaining them is a crucial task, hiring the right fit for the organization is time-consuming and costly. Although human capital is primarily a human resources issue, it is also a procurement issue.

Human resources (HR), often known as human resource management (HRM), is the activity of recruiting, hiring, deploying, and managing personnel in a company. Procurement may be defined as the set of activities that firms engage in to purchase products and services.

As organizations continue to rely more on contingent labor, the procurement department will be in charge of employing these on-demand, non-permanent individuals. These two departments are now more intertwined than ever. They share not just human capital but also other indirect products or services that are acquired, such as health insurance, office supplies, etc.

Without question, these two roles should interact, coordinate, and work together to maximize the value of this complicated but crucial resource.

Collaboration of Procurement And HR Teams

Let’s see how Procurement as a function can help the HR team by collaborating with them and enhancing the quality of HR function.

1.   Onboarding and Managing Contingent Workers

The contingent workforce consists of outsourced, temporary employees, often known as independent contractors, contract workers, freelancers, gig workers, consultants, temporary workers, or remote employees. An organization may hire them on a short-term, long-term, or project-by-project basis.

With both functions collaborating, Procurement could strive to keep expenses under control, while HR will maximize talent acquisition. Unfortunately, when priorities are not matched, this becomes a zero-sum game: decreasing costs diminishes worker quality while adding more qualified individuals increases expenses.

None is truly in command when both departments compete to command the workforce management program. As recruiting managers and lower-level supervisors bring on contingent labor on an ad hoc basis, the outcome is often fragmented, irresponsible labor spending. They will go around regulations by recruiting off-contract, with no monitoring and no way to track the cost or contribution of the employment.

Aligning HR and Procurement’s goals with the organization’s overall purpose allows the departments to exchange information and insights, gather data that may guide future choices and initiatives, and collaborate on a whole workforce solution.

2.   Orientation Toolkit

While onboarding the new employees, human resources must equip the hires with the required tools and equipment. Work can not be accomplished without computers and laptops in today’s digital age. Some organizations provide these devices in the offices, and they are usually shared.

Many organizations also provide employees with an orientation toolkit in the form of swag like tea mugs, pencils, notepads, and so on to welcome employees. Other organizations offer tools that are necessary to perform day-to-day tasks. For example, an online teaching app company provides a digital pad and pen to all new hires so they can efficiently deliver lectures online.

Similarly, due to COVID-19 and the subsequent lockdown, employees were forced to work from home. Organizations sent them equipment and other materials to help them set up an office corner at their homes to facilitate them.

Providing all these materials to employees would be impossible without integrating the procurement function into the HR function. During this step, Procurement can take requirements from the HR department and the assigned budget for the toolkit.

Next, Procurement can look for vendors producing these supplies and ask for samples before placing a larger order. These samples then can be approved by HR to ensure that the materials placed in the orientation toolkit serve the purpose of facilitating the employees.

Procurement, meanwhile, can look for a cost-effective vendor who can deliver the best quality items at the required time, without any delays. This way, both departments, Procurement, and HR can work together to welcome new hires on board.

3.   Talent Acquisition and Management Programs

With contingent employees accounting for one-fifth of the average workforce, staffing agencies and employment firms are primarily responsible for offering your extended workforce. However, not every contingent staff vendor will perform equally well or match your needs. This may be because of the silo between the Procurement and HR department.

For example, if you need a specialized worker, a vendor might not understand the requirements communicated by Procurement and find a person that does not possess the required skills. Thus, this will waste the money and time of all the departments. If HR can collaborate with the procurement department, then both can work together to acquire the best talent for the organization.

Similarly, build a relationship with the vendor who starts understanding your organizational needs and requirements. They can better help you manage talent who can significantly contribute to the success of your organization.

Procurement can also help by utilizing its technology and software, such as a vendor management system for managing talent acquisition companies and vendors. Monitor their performance and get sufficient data to credible onboard companies to meet the organization’s capital needs.

Such vendor management systems can also manage remote workforces and teams. For example, KPIs and performance indicators of remote workers can be set, and their performance can be tracked and measured. Based on their track record, they can receive bonuses and incentives to appreciate them. This subsequently leads to talent retention as employees are satisfied with the fair compensation system.


HR and Procurement should neither be combined nor should their autonomy be taken away for the sake of alignment. Procurement helping the HR team entails ensuring they are both focused on the larger picture of the organization. While some processes may need to be changed, they can still contribute by doing what they do best.

For HR, this entails training and onboarding, codifying institutional knowledge, and procuring different, complementary skill sets. Procurement contributes by properly managing contracts, projects, and suppliers. Hence, Procurement can play a significant role in aligning and managing a workforce that usually comes under the domain of HR function.

Author Bio:

Prasanna Rajendran is the Vice President at Kissflow, where he heads the business operations of Kissflow Procurement Cloud, a flexible procurement software for procurement teams to streamline all their purchasing processes in a single place. He has over 20 years of experience in technology and has helped Fortune 500 companies with custom solutions in the sourcing and procurement space.

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