Hiring for Services: Bias Continues to Be Huge Problem in IT Procurement

By Chris Preimesberger  |  Posted 2014-05-02 Print this article Print

We certainly know about the multitude of laws and regulations for fair hiring practices of employees. However, when it comes to enterprise procurement of services, U.S. IT companies may not be relying on merit and qualifications as much as a service provider would expect. According to U.K.-based Blur Group's Freedom for American Business report, released on April 28, the day of the consultancy's U.S. launch, service providers—especially startups and small players—most often get the short end of the stick due to their lack of connections. Cronyism continues to be a fact of business life, despite so many new companies with progressive products and services. This is bad news for the companies that do the hiring as well; being  stuck in their ways of hiring companies with whom they have had previous connections rather than those that may be better suited for the job may result in diminished creativity in problem-solving. It also could result in a diminished bottom line. This research targeted 400 procurement decision-makers in the U.S. from companies with at least 50 employees and that use service vendors in any capacity. This eWEEK slide show, produced with our own reporting to go with the Blur Group research, unearths some important data points for procurement managers to know.

  • Hiring for Services: Bias Continues to Be Huge Problem in IT Procurement

    By Chris Preimesberger
    Hiring for Services: Bias Continues to Be Huge Problem in IT Procurement
  • Companies Freely Admit They Are Biased

    Those closely involved with procurement decisions have been candid about there being a problem in their processes. More than 40 percent of survey respondents admitted they are biased by personal relationships when making procurement decisions and that it is rare for their company to partner with a service provider with whom it has had no previous relationship.
    Companies Freely Admit They Are Biased
  • Bribery Happens

    From World Series tickets to birthday gifts for spouses to trips to strip clubs, procurement decision-makers have seen it all, which is worrisome for those businesses that play by the rules during the pitch process. IT vendors are notorious for providing in-kind bribery in the form of lavish excursions and parties, expensive gifts, inside connections with show-business celebrities and other items.
    Bribery Happens
  • Search Engines Are King

    Search engines typically are the No. 1 channel for consumers to find goods and services, but when it comes to finding good service partners for a company to hire, are they just as effective? The answer is an unequivocal yes. According to the survey, general search engines are the tool most used to find and interact with potential service providers.
    Search Engines Are King
  • Hitting 'Refresh' in This Department

    Many procurement decision-makers admit that their procurement strategy is getting old, particularly those from larger companies with 250 employees or more. Times have changed, and practices like these need to be reviewed and updated, just as any other corporate policy needs review on a periodic basis.
    Hitting 'Refresh' in This Department
  • Decision-Makers Know There Are Often Better Choices Out There

    One would expect a company to partner with only the best providers and replace those relationships with better ones the minute they realize they weren't still up to par. This is not so; a majority of procurement decision-makers say there are better service providers than those with whom their company currently partners.
    Decision-Makers Know There Are Often Better Choices Out There
  • Good Providers Are Hard to Come By

    It's not that procurement managers don't know where to look. Finding truly relevant providers for their needs is what they see as their greatest challenge.
    Good Providers Are Hard to Come By
  • Without a Shake-up, Creativity Suffers

    Most procurement professionals agree that keeping a long-term relationship with a service provider often results in that provider offering fewer creative solutions as time goes on. How long do they expect creativity to diminish? On average: 4.4 years, the research said.
    Without a Shake-up, Creativity Suffers
  • 360 Degrees of Influence

    The procurement team is not the only group that makes decisions about company partnerships. Nearly all (87 percent) say they would be likely to partner with a new service provider, but significantly fewer (71 percent) actually feel free to do so. This is likely because of personal relationships; most (56 percent) say relationships between individuals at their companies and potential service providers frequently affect their procurement decisions.
    360 Degrees of Influence
  • More Resources Doesn't Necessarily Mean More Innovation

    Procurement managers from large companies with 250 employees or more are more likely to admit that personal relationships influence their procurement decisions and that their procurement process needs a refresh. Despite the resources at their fingertips, they seem to be more likely than smaller companies of 50 to 150 employees to rely on relationships, rather than merit, for procurement decisions.
    More Resources Doesn't Necessarily Mean More Innovation
  • It Works for Dating … but Not Necessarily for Business

    There are online marketplaces for personal relationships, so why not business relationships? More than half of procurement decision-makers agree that being able to sift through service provider submissions online and compare their merits virtually would be an effective way to make new partnerships.
    It Works for Dating … but Not Necessarily for Business
Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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