Buyers help cut HR costs but prefer to go it alone

2 July 2003
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03 July 2003 | David Arminas

Closer co-operation between human resources and purchasing departments is saving millions of pounds a year for large firms, according to a new survey.

But there remains a question over the attitude of purchasing and HR working together.

The report, People and Purchasing: Cost and Quality Concerns, from consultancy Reed Group, shows a quarter of respondents had cut HR expenses by up to £500,000 a year.

But in firms with more than 5,000 employees, purchasing saved up to £10 million annually.

Procurement departments are most involved with the buying of temporary staff followed by purchasing training packages.

By sector, retail has seen the biggest increase in purchasing involvement in HR buying, rising by 75 per cent in the past five years. The services sector has seen it rise by 57 per cent, and the public sector by 50 per cent.

Despite the savings, the survey of 100 HR professionals and 200 purchasers shows that just over half of purchasers believe they can make better buying decisions without the involvement of HR. But only one-third of HR professionals claimed they could buy smarter without purchasing's involvement.

Peter Smith, CIPS president and director of Shreeveport Management Consultancy, said it was "worrying" that so many purchasers felt they worked better without HR.

"It shows purchasing still has a long way to go to understand how to work collaboratively."

Ian Muir, vice-president of group HR policy at Cable & Wireless, said both functions misunderstood that the relationship should be strategic.

· People and Purchasing: Cost and Quality Concerns is available for £35 on 020 7313 7461, or for free at www.reed.co.uk

SMjul2003

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