When you join a company, before signing that hopefully lucrative employment contract, you have to go through a rigorous interview process that involves a number of steps - submitting your resume, undergoing an initial screening call, attending formal interview meetings, taking tests and passing a background check. If you are successful, only then will you be offered the job.
The reason for this thorough due diligence is because the hiring manager wants to ensure that you have the appropriate skills and capabilities to deliver value for the organization. Getting this wrong and hiring the wrong candidate can be expensive for companies – as much as $45,000 per employee!
Procurement professionals can learn a lot from HR professionals, who have mastered the process of selecting and recruiting new employees. (And for those of you still sceptical on the similarities, think again: A large corporation will source from over 100,000 suppliers, and interview more than 100,000 employee candidates.)
So, what would happen if HR professionals hired your suppliers? I think you’d witness greater levels of value, such as reducing the cost of managing suppliers, effectively mitigating supply chain risks, and generating new sources of revenue.
Let’s take a closer look at a number of established and emerging trends that hiring managers have and/or are embracing when seeking to attract, select and on-board new employees. These trends could benefit procurement professionals when sourcing suppliers:
- Create an Empowering Brand: HR professionals understand the importance of having a well-established employer brand that looks after its employees. By creating a supplier brand, you’ll work less to attract suppliers, and even less in managing your suppliers because they understand the importance of helping your company succeed (and, in return, they will prosper). Naturally, to improve your supplier brand, you’ll need to create a positive supplier on-boarding and management experience.
- Customize Your Hiring Strategy: HR professionals have a standard process of hiring candidates. However, they customize how they engage the market in order to attract and select the right candidates. The same logic follows for procurement: you’ll want to source suppliers that are able to support your diverse business needs, now and in the future, so it’s critical to customize your approach, too. A vendor that suppliers a core part may not be the best source of technological innovation, for example, and you may want to engage local start-ups that could help you innovate.
- Prioritize Applicant Experience: HR professionals spend a lot of time worrying about how to improve the candidate experience. Responding quickly to any questions applicants have about the company and role is important – otherwise, talent will go elsewhere. For procurement professionals, it’s vital to ensure that suppliers have a positive experience so they see your organization in a positive light, especially when you’re securing suppliers in a highly competitive market.
- Hire for Cultural Fit: Just as candidate experience matters, so does culture. Even the most highly-skilled candidates will struggle to contribute if they simply don’t buy or fit into the culture that surrounds your company. This view is valid when selecting suppliers, though there are times when you must work with vendors regardless of values because they provide a business-critical part or service. When you chose suppliers based on cultural fit, you’ll create more business value because the relationship between buyer-supplier is built on trust and shared ways of working that support both parties.
- Ensure a Speedy Hiring Process: When it comes to the hiring process, speed matters, especially in a highly competiive market where talent is hard to acquire. Procurement teams can benefit from using technology to automate the screening and pre-qualification of suppliers, which will speed up the selection and onboarding process. Otherwise, you’ll risk wasting valuable resources, and compromising potential efficiency gains that could slow down your procurement organization’s ability to focus on value-added activities such as spending time with key suppliers and colleagues in other departments.
- Analyze Employee Performance: HR professionals continuously assess effectiveness of hiring efforts by analyzing the performance of employees. By looking at a number of data points and metrics, such as efficiency, quality of work, innovative thinking and adherence to values, it’s possible to improve the recruitment of candidates and any inefficiencies in the hiring process. Analyzing supplier performance, including the contribution of suppliers to your busienss success, will help you ensure you are attracting and on-boarding the right mix of suppliers to support your corporate and organizational objectives.
If you’re looking to improve the value you seek from suppliers, you may want to consider revisiting how you select and on-board suppliers based on the experience gained from how HR professionals successfully attract candidates into your company.