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In a tight labor market do you try to hire or automate?

Today (12/20/2018) the Omaha World Herald released an article on the labor shortage in Nebraska. This is in spite the population of Nebraska creeping up to 2 million people, and Union Pacific layoffs releasing workers back into the available workforce pool.

Nebraska isn’t the only place that has a labor shortage. The United States as a whole has a shortage of qualified workers in both white and blue collar jobs.

This may not sound like a supply chain or procurement problem, but it is.

Do you try to hire?

While human resources/human capital may be the lead on hiring, procurement professionals are sitting alongside them. Generally, it’s procurement professionals that work agreements with traditional hiring or head hunting firms.

In the 21st century the procurement professional can also reach out to other sources of hiring. Variable or contingent workforce companies and sites can fill a need that standard hiring can’t. Your organization may not get a permanent hire, but they may get the person or people they need for that important project.

However, some companies try to keep jobs within the states they are located in. Yes, they may be able to hire a contingent worker or two from Canada or South Korea, but those dollars are leaving the state, and perhaps the U.S.

Do you automate?

If your organization can’t hire more people, perhaps it’s time to automate more processes. AI and blockchain are the touted technologies that will change tomorrow, but many organizations, especially medium and small businesses, don’t have the money for that now, and may not have the money for that even in ten years.

Your organization has to ask itself what processes or reports can be automated with programs, either purchased or developed in-house. If in manufacturing or warehousing what machines or robots can be built or purchased – and can you afford – so your organization doesn’t have to rely on as many human workers?

Whether a program or a machine, procurement professionals will be there to lead the sourcing.

Conclusion

I didn’t address outsourcing here. Many companies already do so, and it is a consideration your organization may have to make. But if the focus is on keeping revenue and tax dollars in the state your organization is located in, and in the U.S., outsourcing may not be an option for you.

The same goes for variable/contingent workforce solutions. Your organization may put a requirement for workers located in the U.S. only. How will that effect the hiring process, and the project(s) those personnel are being hired for?

You will have to look at the total cost of ownership of the hiring or automation solution your organization is considering.

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