The CPO Story – Making Contingent Talent Work
The Chief Procurement Officer (CPO) has a crucial role to play in an organization’s talent success story, especially when it comes to contingent and outcome based expertise. With contingent talent becoming an increasingly large proportion of the workforce, the way an organization engages with its talent provider community will be decisive.
In many organizations the procurement function will take the lead on cultivating and maintaining these interactions. Therefore the CPO can not only set the tone for these relationships but also lead the way.
The key difference between a talent supply chain and an SKU (stock keeping unit) supply chain is choice; talent can decide whether to be part of a particular supply chain or not. This means that those organizations who perceive and treat contingent talent as a ‘cost’ rather than a ‘value generator’ are likely to end up with a weaker supply chain.
CPO’s must ensure that the functional strategies and tactics they oversee enhance, rather than dilute, their ability to attract the right talent at the right time. Often seen by HR and other business functions as an area that is purely focussed on driving down costs, procurement should be arguing for an approach founded in value based analysis.
Unfortunately this mindset is still the exception rather than the rule. Many procurement functions are failing to capitalize on the full spectrum of options by misplaced focus or faulty thinking. Some common missteps include:
Input Based Thinking
Continually bearing down on input costs – with little relativity to the outcomes required – will risk more than making organizations an unattractive customer to the talent provider community. It could make the highest quality talent think twice about whether or not they want to work within an organization that puts their price ahead of their contribution.
Lack of Engagement
The successful procurement functions will be regarded by their key stakeholders as ‘facilitators’ rather than ‘gatekeepers’. This requires a more pragmatic mentality than is often necessary in other spend categories.
The contingent marketplace is dynamic and ever changing. Old school RFP exercises which incorporate rigid input spreadsheets do not allow innovation or creativity to shine. It also creates an added cost of sale burden that many CPOs and procurement professionals do not realize – yet ultimately end up paying for. It is not easy, as Steve Jobs famously said “Simple can be harder than complex; you have to work hard to get your thinking clean to make it simple." However for a buy-side organization without doubt simplicity is the best route to supplier value.
Building a Better Way
Can you be the one to make a change?
Here are some specific ways to provide a supportive and successful environment for your team:
- Be a champion for contingent talent options. Make it your priority to obtain regular analytics on activity and performance and relay these findings to your colleagues in the C-Suite.
- Build strong, positive external and internal relationship with suppliers and other areas of the business. Learn where and when contingent talent is required and share these findings with suppliers – allowing them to meet your needs more readily.
- Demand that your buyers focus on value/outcomes first, cost second. Lead the way through your attitude and approach.
- Remember that a supplier (and the talent they represent) has a choice about whether to engage with a hiring organization. To access the highest quality suppliers and therefore the highest quality talent you need to build mutually beneficial relationships. Keep the costs of sale to a minimum and eradicate unnecessary complexity within the buying process.
- Be transparent about challenges, objectives and budgets. Think of contractual goodwill as a hot air balloon – both sides need to keep it inflated – avoid the temptation to create artificial commercial leverage.
CPO’s have can have a bigger impact on the success of a contingent talent story than many realize. Be prepared to change the conversation wherever necessary and see real results.