Like everyone else in the free world, I made sure to read Tim Sackett’s post on FOT this week about the benefits of working in HR during tough times, including better vendor giveaways. Just this week, Warren Buffet also said that we are still deep in the recession, disagreeing with a report from the National Bureau of Economic Research. Check that out: I have Tim Sackett and Warren Buffett in the same paragraph agreeing on something. Tim, in his own special way, hit closer to home for me, because I have had vendor management on my mind lately.
Here is what I mean: I think that Talent departments are in a weird place during these times—business leaders are counting on the team to find the best niche talent in a turbulent labor market, even while overall hiring is down. If you want to be valued by leadership, it is also a good time to streamline processes, find improvement areas and overall tighten up your world. Know which part of your world your finance team cares most about? Yep, the spend you give to your vendors compared to the value you get back.
Call me cold, but it sure seems like it’s a good time to either get your HR vendors to be better or get better vendors working for you. I am not suggesting that you try to take advantage of companies with whom you do business, but I am saying that it is absolutely the right time to sit down with your team and evaluate the companies who make their living off of you. Ask yourself if you are getting the best value you should get, because now is the time to get things right.
Here’s an exercise to help: Gather your team and a whiteboard. Rank your vendors by the service level they provide or the value you get from them. Put your best vendor on top and your worst vendor on bottom. There might be some debate, but most of this will be intuitive—you know who you like and who could be better. Then, for part two, write down next to each vendor the total dollars you paid them last year. Your top spend better be near the top of the team’s favorite vendor list. If not, I think they just became your first meeting. Share the results and start a conversation.
Keep in mind, this is not time to go all Gordon Gekko and break the backs of your partners. In fact, it should be just the opposite. Simple survival drives most vendors to work with you to make sure they keep your business. The really good partners, though, want to work to better position themselves for when the economic tide turns. A really good account rep should welcome the chance to sit down and learn what you like and don’t like about how they run their business.
Your best vendors will thank you and should offer suggested ways to improve their value to you. And that, my friends, is where Mr. Buffett and your business leaders would love to see you… getting the same value for less dollars or more value for the same dollars. Then, when business picks up, you will know that you and your vendors are well aligned and ready to crank up the machine.
I have spent the last 20 years of my professional life advising leaders to make great talent decisions to drive business results. In my current gig, I lead talent acquisition and management for a multi-billion-dollar, 100% employee-owned construction company. I geek out on analytics, succession planning, etc. and love it when we position folks to do their best work. That’s fun stuff. I tease bad HR people, because I think we can all do better, myself included. That’s fun, too.