By Beroe Inc.
By Divya Singh, Research Analyst, Beroe Inc.
Abstract: Procurement needs to alter and enhance its operations every day to influence stakeholders and attain increased value. One of the most important keys to achieve this goal is the RIGHT PROCUREMENT TALENT. This article describes current trends and existing challenges prevailing in procurement talent management, the measures adopted by several organizations to overcome these challenges and the necessity to address the talent crisis as an issue at present for sustainable procurement in the future.
Companies that once used to view the procurement department as a tactical buying team now realize procurement’s importance as a strategic partner within the organization. Service delivery and timeliness, which were once procurement’s primary slogan, have become cost savings and process efficiency. Consequently, the procurement talent assessment that was at a basic level based on primary skill areas is observing a shift towards stringent and competitive assessment to attract, retain and manage best-of-the-world talent.
Why the Challenge?
From the talent pools’ perspective, the creamy layer of talent that considers procurement a career option prefers consulting jobs to real time procurement/sourcing roles. One of the significant reasons is the attractive remuneration offered by the former when compared to the latter. Also, it is difficult and time consuming to move up the ladder as it requires extensive experience to be able to get into managerial positions in procurement. At the end, procurement is still viewed as a not so interesting and challenging area to work.
From organizations’ perspective, while they are still striving to define strategic sourcing and adopt an advanced category management approach, identification of the right talent in terms of category expertise and framing a clear development path is highly challenging.
Trend Shifts in Procurement Skills
Companies that once relied on the HR department solely for the ‘Competency Framing’ activity are now involving procurement executives to identify the required skill set for each role. With advancement in procurement maturity and changing objectives in procurement, leadership skills and transformational abilities are considered very critical for a procurement professional especially at a managerial level. Also, most mid-range companies that are observed to be undergoing several transformations are looking for special procurement/sourcing skills unique for the organization. However, leaders in procurement are striving hard to retain existing talent as external hiring from competitor procurement organizations has received increased attraction recently.
Generally, few of the important competencies constantly repeated by most companies looking for procurement talents are:
Technology, playing a significant role in the present era, demands the procurement staff to be efficient in utilization of purchasing tools such as Spend Analytics, eRFx, eAuction, and eInvoice. This improves the operational efficiency of the organization through reduction in resources utilized on redundant activities. Thus, in addition to the soft and technical skills described, knowledge or hands-on experience in eTools provides added edge to get a role in leading procurement organizations.
Thus, this sudden shift in the way procurement operates and the increase in importance for procurement professionals has created a huge demand for talented procurement professionals with the special skill set required to improve procurement organizations further.
Addressing the Gap
In order to address the talent gap, companies are taking aid of external procurement professionals who assist the internal category management team in development and execution of the category sourcing plan aiming at improving sourcing efficiency. They are also carrying out internal job rotations wherein cross functional teams inside procurement can be formed. The talent pool will be composed of people across functions such as finance, manufacturing, engineering etc., therein bringing a broader business and technical experience in managing procurement effectively.
Second, to close the loop for talent management, organizations are interested in performance measurement. Performance metrics act as the key to evaluate how fruitful procurement’s efforts are in the area of talent management. Few innovative KPIs that might trigger improvement plans for procurement talent management are:
Deployment of similar metrics and internal assessment surveys on the performance of procurement professionals with internal stakeholders can help in identifying improvement areas and close the talent gap gradually.
There is an urgent need to re-look into procurement talent management as the talent crisis is becoming a matter of huge concern for many organizations. In order to build a robust system, companies have to find the right talent pool to address the specialized needs of effective sourcing. Organizations need to focus on closing the current gap within the effective timeframe along with framing a clear development path for procurement positions in order to retain talent long term. Though it is challenging to increase the attractiveness of procurement jobs, especially with the increasing pressure on procurement professionals to achieve bottom line impact, companies have understood the necessity to do so. A right balance between traditional skills in procurement and special skills for change management with appropriate training and development plans is essential to cross this wave of talent crisis with successful outcomes.
Beroe is a global provider of customized procurement services specializing in sourcing, supply chain visibility, financial risk analysis and environmental impact to Fortune 500 organizations. With nearly 400 dedicated procurement specialists in 38 domains, across 9 industries, Beroe proactively invests in knowledge assets to build valuable, real-time procurement insight. For more information, visit Beroe Inc. online.
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