Is HR Smarter Than Procurement?

Hiring a consultant (of any kind) is a lot like hiring a staff person except on a temporary basis instead of permanently. So why do we require consultants to win the job on price when we so easily hire permanent staff without a low bid process? Read my thoughts in the recent ACEC BC special publication for Business in Vancouver.

If Human Resources Can Use QBS Why Can’t Procurement?

In the effort to get clients hiring consultants with a Qualifications Based Selection (QBS) process instead of a low-bid request for proposal (RFP) process, the engineering consulting world has an unlikely ally – the human resources department.

Most clients that hire engineering firms are already unwittingly using the QBS process within their firm – just not in the procurement department. Instead we find the QBS process alive and well in HR where it’s being used to hire permanent staff.

For the record I have never seen an HR department use a low-bid process when hiring a permanent staff person. And in fact if I suggested this to any HR department in the world they would look at me quite strangely, I am sure. Instead of trying to find out who can fill the role for the least amount of money, HR wisely looks for the most qualified candidate within a predetermined budget and skill set.

They advertise their need for a certain type of expertise within a certain salary range and invite qualified candidates to submit resumes (read: proposals) bearing objective, defensible and credible evidence of their expertise by listing such things as education, previous work experience, unique training, publications or articles they have written, presentations they have given, research they have completed, awards they have received, etc.

An initial assessment of the resumés (read: proposals) against the objective criteria for evaluating expertise usually yields two to four candidates that are shortlisted for an interview – which is really just a chance for the hiring committee to explore and evaluate candidate claims of expertise with a more robust discussion. It’s an opportunity to further refine the initial scoring of the shortlisted candidate’s resumé (read: proposal) using dialogue and more specific inquiry.

At the end of the interviews usually one candidate has clearly bubbled to the top, and negotiations then begin with that candidate within the previously advertised salary and requirements of the job.

Should those negotiations not go well, the committee is free to cease, and move on to negotiating with the second most qualified.

In this manner the client is always guaranteed to hire the most qualified and available staff person for a mutually agreed upon fair price, unlike the low-bid RFP process where the minimally qualified and lowest price typically wins the day.

“But Cal,” the procurement departments often protest, “hiring one staff person is not the same as hiring a consulting firm for a million-dollar project!”

Hiring a $100,000 per year employee, with the expectation that he or she will be a long-term employee lasting 10 years or so, is not a $100,000 hiring decision; it is a $1 million-plus hiring decision.

It is a QBS-style hiring decision made without a low-bid requirement, using only a two- or three-page proposal (read: resumé), and accepted worldwide as the de facto standard for hiring professional, permanent staff.

So explain to me again why human resources can use QBS for million-dollar purchases but procurement can’t?

 

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The Consultant with Pink Hair

"This should be required reading for consultants AND their clients - especially the part about RFPs." - Blair Enns, Win Without Pitching

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