14 - 16 July, 2020
Equarius Hotel, Singapore
+65 6722 9455
Overcoming Today’s Procurement Talent Management Challenges
The role of procurement is evolving, requiring new skillsets, and placing new demands on procurement professionals. Traditionally viewed as an administrative and transactional role with a primary focus on achieving cost reductions, many organizations now recognize that procurement can offer a much broader value proposition, and make an impact beyond delivering savings to the bottom line.
Over the past few years, procurement has become increasingly responsible for an extensive range of activities in a growing number of business areas, with more and more focus being placed on value creation rather than cost reduction. On top of having a thorough understanding of market trends within their category, this requires procurement professionals to develop in-depth knowledge of the global supply base so they can work together with suppliers to create new opportunities for adding value.
This means that today’s procurement professionals are increasingly charged with managing key relationships – with strategic partners, suppliers, and customers, as well as internal stakeholders across various departments, such as sales and marketing, human resources and finance. As such, the evolved role now involves dealing with many different people at many different levels and positions, including buyers, accountants, quality inspectors, product engineers and senior executives.
However, as this evolution has taken place, a disconnect has emerged between the skills procurement needs from its employees, and the skills the existing workforce can actually demonstrate. Procurement leaders around the globe are growing increasingly concerned that the demand for adequately-skilled procurement professionals is outstripping supply – and we have seen this in our own research. 50% of the procurement professionals we spoke to at ProcureCon Asia 2018 said they faced challenges with talent management, including local talent shortages, attracting and retaining the right talent, and improving the image of the procurement function within the organization.
As procurement is increasingly tasked with pursuing a broader array of activities, the need for staff with a wider range of skills becomes more and more urgent. Organizations need to be taking measures to strengthen procurement’s skills across the board. This means creating strategies for attracting and retaining top talent, as well as for managing and developing existing talent from within the organization.
Identifying Skills Gaps
Developing a practical skills-building strategy begins with a capability assessment to identify the strengths and weaknesses of your existing employees. Broadly speaking, the modern, strategic role of procurement requires a talent pool consisting of not only skills in negotiation and contracting, but also supplier relationship management, network structure management, supplier performance management, risk management, and product and process development. So – what do you have in abundance, and what’s missing?
To answer this question, you will need to conduct an in-depth analysis to determine the precise areas where improvement is needed. Only when you know what skills your employees lack will you know what initiatives to take, what training is required, and what you should be looking for in new hires.
According to Deloitte’s 2018 Global Chief Procurement Officer Survey, more than 50% of CPOs believe their teams do not have the necessary skills to deliver on their procurement strategy, and that the recruitment market is becoming more challenging. Yet, despite this, very little is being spent on training and talent development strategies – and the figures are falling. In 2018, 72% of procurement leaders spent less than 2% of their operating budgets on training and development programs for their teams, compared to 66% the previous year.
(Image source: deloitte.com)
Another key finding from the survey is that nearly three-quarters (72%) of procurement leaders said that their teams possess little or no capability to maximize the use of current and future digital technologies – yet only 16% were focusing on enhancing the digital skills of their teams. There was also a significant reduction year over year (from 54% to 45%) in the use of procurement academies and/or a procurement training curriculum, and planned training on “soft skills” – such as business partnering, relationship management, collaboration and emotional intelligence – were of reduced focus in 2018.
The report notes that there is a direct correlation between stronger leadership capabilities, higher spend on training, and enhanced performance – so why aren’t procurement leaders focusing more on talent development? Organizations will only be able to retain highly-skilled and ambitious talent when they are willing to invest in developing their employees, and thereby equip themselves with a procurement team that’s ready for the future.
Attracting and Nurturing New Talent
In order to attract talented new hires, it’s imperative that procurement organizations foster a strong and desirable company culture. Aside from competitive pay and compensation packages, once again, this includes providing continuous development opportunities and solid training programs.
Top candidates are drawn towards an organization if they see strong leadership with a commitment to professional development and growing individual careers. In addition, it’s important to focus on what matters to the millennial generation – the future of the workforce.
As Lucy Harding, Partner and Global Head of Practice, Procurement and Supply Chain at Odgers Berndston, puts it: “It is increasingly important, to attract talent, for organizations to be seen to move in the digital space. If a business is investing in the latest technologies, this indicates that it is up to date with the latest thinking. This attracts people who consider that their career will benefit if they are exposed to innovations in technology. Top talent, especially those in the millennial generation, will not choose to work in an organization that is significantly behind the latest trends and technologies.”
At its core, talent management is about pinpointing precisely what is strategically important and where people are needed. To forge a positive path forward through the talent crisis that is currently befalling the industry, procurement leaders need to be revamping their strategies, identifying skills gaps, and investing in training and development initiatives that will attract, upskill, and retain the top talent of the future.
You can hear Noelle Lee, VP of Global Procurement, BD, Heidi Knight, Head of Procurement Asia, Japan & China, Sanofi, Brady Walz, VP of Procurement, APAC, Ecolab, and Noriel LLanza, AVP Construction Procurement Head, Makati Development Corporation, speak at ProcureCon Asia 2019, on talent management challenges facing procurement today.
Download the agenda for more information and insights.