According to a US Government Accountability report, 40 percent of the entire US workforce is made up of contingent workers, with the average organization having 18 percent of their workforce employed on a contingent basis.
The report estimates that by 2050, 50 percent of the US workforce will be made up of freelance or contingent workers.
The job of a procurement team is to ensure that value is driven to your business through pricing, terms and conditions, contractual arrangements, business terms, vendor performance, supplier rationalization and many other cost-saving strategies.
Those in procurement can help your business obtain contingent workers for the best possible price, from the best possible vendors, but aren’t necessarily experienced in the “human side” of hiring workers.
There is the possibility that this could lead to some challenges if you want to provide a superior work experience that allows you to re-engage temporary workers in the future as-and-when they are needed.
HR, on the other hand, is the polar opposite. The focus of a HR team is on the hiring, administration and management of a company’s workforce. They manage people to ensure they are happy during their time at the company.
HR departments focus on areas such as talent acquisition, talent management, retention, employee relations, payroll, benefits and training. While procurement focuses on executing business terms, supplier management, cost optimizations and internal client satisfaction.
As the workforce trends towards contingent, however, HR needs to have input and visibility into all forms of resourcing.
HR is able to give your company a holistic view of the work being done, and how it affects the overall work product, environment, culture and hiring processes. As your company moves forward, HR can help your organization decide whether it is best to hire a consultant, contingent worker, temp or full-time employee.
Yet, since HR typically centers on overall talent and workforce management, typically related to full-time, long term employees, there are times when non-employee/contingent workers would be excluded from general HR oversight.
Many organizations don’t have the luxury of building huge HR and procurement teams to fill their workforce needs. Instead, these companies will have small, or maybe even one person, teams. Many hiring managers are typically trying to manage their own non-employee workers. It isn’t until a problem becomes acute that they turn to the help of either their HR or procurement team.
Managing contingent workers should be defined from the outset. For those companies with both a Head of HR and a procurement team, the question of which department should be responsible for its management will be a common question.
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