In today’s business landscape, the war for talent is all about the importance of attracting and retaining exceptional human capital. Companies must actively seek out and employ brilliant minds to successfully navigate unfamiliar territories.
As the visionary Steve Jobs once wisely proclaimed,
“Go after the cream of the cream. A small team of A+ players can run circles around a giant team of B and C players.”
The War for Talent and its impact on Procurement
However, the task of getting these exceptional individuals on board is becoming increasingly challenging. Even during periods of economic downturn, the most talented individuals are able to be discerning about their choice of employers.
The best performing companies now recognise that they must proactively adopt strategies to attract the very best in the field. There is an ongoing battle to secure top talent in procurement. To win this battle, the incorporation of digital procurement tools within the workplace has emerged as one key factor.
What does the war for talent mean?
The concept of the “war for talent” was first introduced in a 1997 study conducted by Steven M. Hankin titled “The War for Talent”. This was subsequently popularised in the 2001 book of the same name.
Initially, this term was used to describe the projected scarcity of skilled workers resulting from the impending retirement of the baby-boomer generation. This void in the workforce would necessitate employers to engage in fierce competition to attract and retain employees like never before.
Nowadays, the term has come to be closely associated with the intense rivalry to secure young, high-performing talent.
This represents a significant and persistent challenge that cannot be ignored. Nearly one-third of senior business leaders rank talent acquisition and retention as their foremost managerial obstacle.
Why is there specifically a war for talent in procurement?
Procurement is facing its own war for talent for a number of reasons. Some of these are common to other areas of the economy. Whereas others are more specific to the procurement and supply chain space uniquely.
Let’s examine a few factors. Firstly, we can group together the more general macroeconomic trends driving a war for talent across all sectors of the economy.
Recent research conducted by McKinsey indicates that in 2020, Europe and North America faced a shortfall of 16 to 18 million college-educated workers compared to the demand. This is the case across most developed economies e.g. the US, Canada, Europe, Japan, South Korea and Australia.
Work / life balance
In general, people are choosing to work less and place more value on work-life balance. Procurement, especially during the past 3 years, has not exactly been an easy profession. Add on top of that the general apathy and lack of recognition that procurement receives from the wider business.
Younger people especially want more location and time freedom. Traditional office-based jobs such as those in procurement and supply chain are having to compete with jobs which can be done remotely. Some organisations have indeed embraced 100% remote procurement roles. However, most roles, at least anecdotally from the job boards I occasionally look at, are at best hybrid or at worst full-time office based.
Freelancing / self-employment
The gig economy is growing. It was on target to more than double in the United States between 2018 and 2023. Those who want to choose when and how they work are turning their back on traditional employment. Plus, there are the fiscal benefits that being self-employed offers in many countries too.
Now, let’s take a look at some of the unique factors which are applicable to jobs in procurement.
People are leaving the profession
Burnout is real. The past 3 years have been brutal. We looked recently at an article suggesting that procurement managers were quitting in record numbers.
Procurement is seen as back-office
Let’s face it, procurement still has an image problem. Attracting new graduates into the profession is hard. We can’t still. Gen Z doesn’t want to be seen working in a department that’s sat in the corner pushing paper (or with our heads stuck in spreadsheets)
Lack of career opportunities
Procurement is often not an easy place to move up the career ladder. Most team leadership roles require managing experienced professionals rather than operational or clerical staff. It’s a big step up. The emergence of functional subject matter expert roles may change this dynamic over time, as procurement becomes more specialist than generalist.
What other factors impact the war for talent in procurement?
As well as the factors we explored above, there are other reasons why it’s not so easy as it was to hire good procurement talent. They simply have other opportunities available to them these days, which may be perceived as more attractive:
Working for a software company
Many procurement tech companies want to hire folks with a procurement background, to help them understand their customer base. It seems that they won’t have too much trouble doing this, based on a recent LinkedIn poll I ran.
Moving into consulting
There’s no way to quickly gain experience of diverse industry sectors and company cultures that working in consulting offers. Procurement consultancy is booming. Consulting firms actively recruit both entry level and experienced hires, who have worked in front line procurement roles. I
It also pays pretty well.
Why are your top performers leaving?
So, we’ve looked at alternatives to front line procurement which can leverage a procurement background.
But even if top talent wants to stay in Procurement, they will also likely evaluate some of these factors. These are also time and again the same reasons why Procurement Managers decide to switch roles:
- Are you asking them to perform non-value added busy work? A-players will instead expect to have this delegated to a more junior team member. Or, even better, automated and digitised by using procurement software.
- Does your procurement leadership encourage entrepreneurial thinking? Or is it being driven by an overly rigid, process-first culture?
- Is your procurement organisation open towards workplace flexibility and location independence? Or are you mandating X number of days in the office, only for your top talent to spend an hour commuting just to spend all day on video conferences? Yes, in-person time is vital. So, ensure you’re getting the most out of it and it’s not just a tick-box exercise.
- What is Procurement’s mandate and stature within the business? Is Procurement respected as a function? Is it reasonably mature, with a certain level of centralisation? Or is it completely greenfield. And if it is, who is it that’s sponsoring the set-up of a new, strategic approach to Procurement?
How digital procurement tools can help you win the war for talent
Of course, we’re here to extol the virtues of digital transformation in procurement. Using the most cutting edge procurement technology can drive additional value and also drive better performance from the best procurement talent.
Remember, you won’t get good performance from a Ferrari on a gravel road, even if an F1 driver is behind the wheel.
With that in mind, let’s have a quick look at how digital procurement tools can justify the investment in them when you have a team of A-players using them.
Technology can underpin the ability to attract and retain high-performing team members in the following ways:
- Process automation can help to reduce workload in overwhelmed teams.
- Technology’s ability to automate will also allow the focus to shift from transactional and operational to more strategic work.
- Allowing artificial intelligence (AI) to perform the heavy lifting means that Procurement can effectively interpret the results, act on them, and communicate effectively to the business what the next actions should be.
- Enabling effective communicators and negotiators to spend more time building on strategic supplier relationships, as well as gaining the trust and respect of key stakeholders.
- A good UI/UX should mean less time on compliance related transactional work. The organisation should voluntarily use procurement’s chosen suppliers thanks to intuitive, user-friendly e-procurement and guided buying.
- Open ecosystems which can be connected to one another using APIs can facilitate joined-up data and better visibility.
- It takes away the subjective element of supplier management and makes stakeholder discussions and decision-making become data driven.
- Ability to focus on deep subject matter expertise i.e. sourcing, negotiation, data analytics, sustainability, digital excellence, rather than being a jack-of-all-trades Category Manager.
- Finally, your organisation is viewed from the outside as being progressive and dynamic.
Boring job posts won’t inspire the best procurement talent
You’ve already lost the battle for top procurement talent if your job description is a regurgitated text from HR.
It’s very rare to stumble upon a job ad for a position in Procurement and think wow, that sounds really interesting!
Want to attract the best procurement talent? Then keep HR as far away as humanly possible from the job description, other than the legally required text that they need to put in there.
Why not engage a copywriter from your marketing team to write something more inspiring?
Think outside of the box. Be unconventional.
If you really want the best talent, you need to sell your organisation to the candidate. Gone are the times when everyone wants to work for a Fortune 500 company just because they’re a big brand.
Startups are cool, and consultancy pays better.
You’ve got competition.
If your organisation is focused on digital transformation using cutting edge tools, you should really be promoting that. Do you have a culture of trust, with low levels of bureaucracy? Where Procurement Managers have plenty of autonomy to be creative and make informed decisions?
Make sure you showcase this in your job posting. You’ll be beating off the applicants with a stick!
Final note: if your job ad required subject matter expertise for some legacy tech platform as a core requirement, then you’re unlikely to attract the best talent. They don’t want to use these antiquated tools with a horrible user experience.
Top Procurement talent doesn’t spend half their day on admin
As we already touched upon, talented procurement pros are discerning. It’s a buyers’ market (no pun intended), even in challenging economic times.
Higher salaries will pay back if employees are more productive. That means freeing them of bureaucracy and tasks which are below their effective hourly rate (EHR).
EHR is their annual salary, divided by the number of hours they work each year.
$100,000 / 225 working days / 8 hours = $55.55
Would you pay an admin assistant $55 an hour to fill out travel expenses or email managers to approve a new supplier intake form on Excel? Probably not.
So why would you pay a Category Manager to do the same? Is a legacy tech stack or manual processes impeding your best talent’s ability to deliver?
The best way to understand how much invisible waste you may have is to survey your team. How much time are they spending on tasks which are below their pay grade?
Eliminate, delegate, and most importantly, automate as much as you can.
Progressive procurement leaders will win the war for talent
Competition for the best talent in procurement is here to stay.
The demographics speak for themselves. Add to this a younger workforce which prioritises time and location freedom. It doesn’t look good for old school businesses who want “bums on seats” for salaries that are strictly within HR-prescribed salary bands.
These HR policies, along with archaic job descriptions, truly belong in the dustbin if you want a team of Procurement A-players.
The best talent in procurement today wants rewarding and meaningful work. Whether that’s pursing things they’re passionate about, such as sustainable sourcing and environmentally conscious supply chains. Or, whether they just want to spend more time on added value tasks and less time dealing with administrative tasks that someone on a third of their salary could probably do better.
As well as offering a meaningful procurement role, you also need to pay the best people what they’re worth. That needs to be close to what they could earn as freelance contractors.
Hire fewer of the best people and pay them well. It will serve you much better than having a larger team of average performers. Remember the Steve Jobs quote at the start of the article?
You must have the awareness to recognise how to recruit the best talent. Then, go ahead and actually change your hiring policies, organisational structure and be flexible on salaries.
These are the only ways you’re going to win the war for talent in procurement.