How to make big public HR procurement decisions: if only the future was predictable

Workplace needs are ever-changing due to global topics such as the coronavirus pandemic, global warming, and Brexit.  The right technology assists public sector organisations to not only achieve the ambition and growth of communities far and wide but thrive during unprecedently tough conditions. Only one in five of England’s largest councils are confident of preventing insolvency without dramatic reductions to services. This troubling phenomenon means it is far harder to transform change in organisations that are owned or operate as part of the government, due to stretched budgets and limited resources.

Following an effective HR procurement process is critical for achieving goals and delivering ROI. The investment in a solid HR and payroll solution, at the heart of your organisation, will empower you to actively engage with your employees, improve retention and make cost savings to avoid cuts elsewhere. It will also improve your resilience, allowing you to adapt to change and grow.

What is a public procurement process?

Public procurement is the structured process that public sector organisations including Central Government, Local Council, NHS Trusts, Housing Associations, Police Forces, Universities and Schools follow when purchasing goods, work or services from third parties. In other words, it involves everything from purchasing paper to investing in new digital infrastructures such as specialist HR and payroll software.

Sometimes, the public procurement process can be long and complex, so we’ve split it down into 5 simple stages:

1. Identify your goals
2. Submit a public tender request
3. Identify the most economically advantageous tender (MEAT)
4. Make your decision and finalise your award
5. Empower good contract management

1. Identify your goals

First, identify the goals you want to meet and set your key performance indicators (KPI’s) as ways to measure whether you meet them. With your objectives in place, you’ll have a much easier time determining what’s best for your public sector organisation and following the public procurement process will be simple. A clear criterion and a defined set of objectives lead to a streamlined HR procurement process that is fit for purpose.

Sometimes, public sector organisations decide to test the market to determine if there is a need for the goods or service. In the HR procurement process, you might want to know what’s out there to solve issues such as business resilience, people connectivity, social value and workplace flexibility before you submit a public tender.

Engaging with potential suppliers early means you can better evaluate the market to ensure you don’t end up paying more than you should and that operational efficiencies can be achieved. Understanding the benefits of certain solutions helps you clearly demonstrate that all-important value when it comes to assessing tenders.

Once you have identified your goals, any issues you need to solve, and the value you perceive, it is then time to draw these into a plan to ensure the procurement of a product or service happens in a timely manner, at an affordable price.

2. Submit a public tender

When ready, a public tender is published by a public sector organisation to generate competing offers that meet the specified requirements outlined in the contract notice for procurement in HRM (human resource management). You will then select the most suitable suppliers, that hit a minimum set of requirements, to go through to a formal tender stage.

HR and payroll suppliers, like MHR, that are part of a public sector framework or framework agreement can deliver many benefits to your organisation. The alignment of procurement practice with government efficiency agendas and the expectations of auditing bodies ensures you conform with the necessary standards. They also reduce procurement costs as you are able to set terms and prices for a defined period.

3. Identify the most economically advantageous tender (MEAT)

Now that you have a profound understanding of what you want to achieve and the options available to you, it’s time to evaluate your tender options and identify the most economically advantageous tender (MEAT).

“MEAT may not be the cheapest offer and is determined by evaluating tenders against published award criteria to get the right supplier to deliver works, goods or services.”

There is a continued push for HR procurement to make cost savings through collaboration strategies and efficiency gains with tenders often being scored on price. However, it is important to compare your desired outcomes against each tender to ensure you not only have full visibility of spending but that value for money will be delivered, efficiency gains will be made, and social value can be achieved with a new HR and payroll provider.

You will be required to score each tender to ensure you’re getting the right mix of quality and effectiveness as well as provide feedback to all suppliers/bids, so it’s important you feel confident in your decision and have a full record of the evaluation process should you come under any scrutiny.

4. Make your decision and finalise your award

Once your decision has been made, it is now time to award your new contract! Unsuccessful bidders should also be contacted. Sharing feedback is a good way to help suppliers understand what they did well, not so well and areas for improvement in the future.

The selection process is a strategic move in planning for the future. With great power, comes great responsibility and public sector organisations are expected to spend money wisely and carry out public procurement with efficiency and meticulous attention to detail.

5. Empower good contract management

Continually review your contract against the key performance indicators (KPI’s) you set at the start of the project to ensure compliance and contract scope is effectively managed and constantly met.

Get buy-in and involvement from wider teams and build a relationship with your new supplier. Work together to deliver outcomes. Strong relationships can continually deliver cost savings and can help reduce problems, delays and quality issues.

Even if you have existing systems in place, it never hurts to revisit your HR and payroll offering to make sure it’s delivering value, security, flexibility, reliability and is up to date with the latest workplace needs. Sometimes, it is worth testing the market and engaging with suppliers to check.