Here’s an excerpt from our Procurement Quarterly Market Update for the second quarter of 2015.
The second quarter of the year brought a UK general election and further concern about the economic stability of the Eurozone. At Edbury Daley, we saw a drop in the number of new procurement vacancies coming to the market prior to the election. With opinion polls predicting a hung parliament and political commentators speculating on which parties would be capable of striking a marriage of convenience to create a majority, uncertainty was rife in the business world.
For many businesses that uncertainty manifested itself in delayed hiring decisions with positions pulled or postponed. The unexpected Conservative majority provided a considerable boost to business confidence but also introduced the prospect of a referendum on the UK’s membership of the EU. For those businesses reliant on trade across EU member states a new uncertainty was created by the Conservative manifesto.
The wider economic landscape had a filtering effect on those business looking to hire. Those truly committed to expansion still went ahead and searched the market for the procurement people they needed. The more tentative recruiters drew back and waited. The impact at Edbury Daley was a surge in conversion from job instruction to placement.
Those businesses which still hired enjoyed the benefit of a window of opportunity whereby the strongest candidates briefly had slightly fewer potential career moves to choose from. Coupled with our advice on salary and talent attraction they were able to strengthen their procurement team during Q2.
The more tentative recruiters made little progress with sluggish recruitment processes and weak financial offers to the strongest candidates leading to offer rejection. The candidate market proved too competitive for those businesses unable to adapt to changing conditions and many still have unfilled vacancies that are months old. Specifically, these business recruitment processes’ were too cumbersome with excessive timescales and too many interview stages which results in a poor candidate experience. Several also suffered from wider company issues such as hiring freezes and changing corporate goals.
To address this issue directly, Edbury Daley conducted a survey amongst one hundred procurement professionals gauging their response to various components to a typical corporate recruitment process. Using the results as a basis for best practice, we have advised a number of clients who have been agile enough to implement a number of changes to improve their time to hire. You can see the results here. Procurement leaders who had endured multiple offers and rejections over the past six months are now getting the people they need in to the team.
The overall picture remains that the very best performers in procurement are hard to attract away from their existing employers. Post recession, businesses are more willing to provide basic salary increases and bonus payments to their best people. In addition, we are witnessing an increase in the counter offer on resignation. This last ditch attempt by the current employer is often too late to prevent the valued member of the team leaving but is a clear indication of the perceived difficulty of recruiting a high quality replacement. This trend is seen in the wider jobs market:
“our own survey indicates that three-quarters of organisations have struggled with recruitment challenges in the last year, particularly when filling skilled or niche roles” Mark Beatson, Chief Economist at the CIPD
If you would like to receive a copy of the full report please contact Simon Edbury via firstname.lastname@example.org
The UK Spend Management sector is enjoying strong market conditions with several key players experiencing significant growth.
In terms of human resource, there are a finite pool of people with experience in a rapidly growing sector. This equation means there is a shortage of suitable talent that is only going to become more acute as the market continues to grow.
At Edbury Daley we have had a clear focus on the sector for several years now dating back to our first work with an established market leader in 2007. Our network of contacts spans all the key players in the sector and we know where the best people are.
We also know which people might consider new roles, and which organisations are at risk of losing some of their best people due to market factors like salary increases, under investment in the product etc.
In a marketplace which is characterised by this skills shortage, growing organisations need a recruitment strategy that can help give them competitive advantage.
We strongly believe that our portfolio of services can be a major factor in delivering that competitive advantage to the companies that we work closely with.
We offer several different recruitment services for both interim and full time roles, a bespoke salary benchmarking service for the procurement technology market and an advisory service which focuses on improving talent attraction strategies.
If your business needs to address how they hire the best available people, we have the experience and market knowledge to make a difference.
Here are some examples of the appointments we’ve made so far this year in competitive market conditions:
Senior Sales Manager – e marketplace & analytics provider
Managing Consultant, Coupa/Ariba implementations – big four Consultancy
Senior Consultant, SAP Implementation – big four Consultancy
Senior Consultant, P2P Transformation – niche consultancy
Senior Consultant – e Sourcing suite provider
If you would like a more in depth view of the market, whether it be for a discussion about recruiting into your team or with regard to your own personal career choices, please contact Andrew Daley on 0161 924 2385.
Edbury Daley have instigated some timely new research on the choice of recruitment and selection methods and the impact of those choices on the success rate of a getting a quality recruit in to the hiring business.
As the global economy recovers many companies are pursuing significant growth plans. Often, the key constraining factor is the ability to hire and retain the skills and expertise needed. Employer Branding and Talent Communities are becoming the new parlance of Human Resource Management as bigger corporations embrace the advent of social media to gain an advantage in finding the people they need. This is covered in some detail in a very interesting recent study by Deloitte.
As part of Spend Matters focus on Talent this month we are contributing a series of articles relating to the subject of recruitment and retention of outstanding procurement professionals.
A great recruitment strategy actually starts with the retention of your best people. Why? Retaining, developing and promoting your best people sends a very positive message to the market that your department is a great place to work. Conversely an organisation with high staff turnover and unhappy staff will quickly gain a negative reputation.
So how do you keep your best people happy, motivated and away from what is a very busy job market?
Here we look at the reasons why procurement professionals to want to leave their current employer, what we in the recruitment profession call “push” factors.
Looking at this study from the US they list the top three reasons in order as:
- Career Advancement
- Work/life balance
We wouldn’t necessarily disagree with this but from our experience with procurement people there are a number of factors in play. Using years of anecdotal experience, here’s a list of the most common reasons people tell us they want to move.
Lack of career progression – when people reach the glass ceiling where they realise their future opportunities for advancement are limited they are generally willing to consider roles with organisations where those opportunities are considerably better. This is a common mindset amongst “passive” job seekers.
Lack of training and development – “I’m not learning anything” or “I don’t feel challenged” are common complaints that usually tie in with a lack of career progression.
Break down in relationship with boss/peers/stakeholders – this can lead to a pretty unhappy time at work and usually results in a desire to move jobs as quickly as possible.
Lack of senior management support – procurement needs sponsorship at the highest level to effect positive change. A lack of support from the top is a common reason why departmental leaders want to move. Similarly for those working with difficult or uncooperative stakeholders in Category Management roles, going to work can be very unrewarding and encourages people to seek an environment where their skills will be valued by others.
No challenge left in the role – many leading procurement people thrive on delivering the inherent change required to deliver better commercial outcomes. When they have delivered significant improvements and are left with running a “steady state” they become bored and seek the next challenge, usually in a new employer.
Treated unfairly – when people perceive that others are being treated better by senior management, whether it be through promotions, pay rises or bigger bonuses, this breeds resentment and pushes that person onto the job market.
Colleagues moving on – when people see their friends at work moving to other organisations for better roles and salaries they begin to wonder if they should be considering options outside their current employer.
Company health/profitability – be definition procurement people are commercially savvy and have access to all sorts of financial data. They know when the company is struggling and this brings the issue of job security onto the agenda.
Work/life balance – working long hours, making early or late calls to colleagues, stakeholders and suppliers in different time zones and excessive work loads will be tolerated by many in the short term but when it becomes a long term trend and impacts on your personal life it becomes a source of discontent.
Practical reasons – a significant change in personal circumstances often prompts people to look for a new job that is more suited to their lifestyle. People also move because of excessive business travel and difficult commutes.
Financial – it is actually very rare that a procurement person lists salary as the principal reason why they want to consider a move. In fact it’s usually us that raises the issue of salary and benefits when we first speak to a new candidate and most people will tell us that its only one consideration in a much broader picture.
However when it comes to actually discussing a job offer, it becomes clear that the salary is usually a critical factor.
This situation is perhaps best illustrated by something one of my senior management consulting clients once said to me:
“The thing that irritates me about hiring procurement people is how they switch from sales mode in interview to buyer mode at offer stage. They tell us that career progression is their top priority then feel the need to demonstrate their negotiation skills and end up giving the impression it was about salary all along.”
Whilst this maybe a slightly harsh judgement, it does offer an interesting insight into how many procurement professionals behave during the process, and confirms that salary is a key driver in almost every job move.
In our recent research into recruitment best practice we asked how much of an increase in basic salary would you require to commit to a move?
Only 10% of participants would move for an improvement of 5% on their salary, whilst 44% wanted at least a10% uplift. 39% said they would only move for an improvement of 20%.
With the skills shortage we mentioned above and this approach to negotiating job offers, its clear to us that companies looking to attract the best procurement people will have to look carefully at their budgets in 2015. Quite simply, if the financial package on offer isn’t attractive, most procurement people will wait until someones makes them an offer that does meet their expectations.
Our message to procurement leaders is this – we are on the cusp of a skills shortage in key areas of the procurement profession. Hiring good people is becoming increasingly difficult in a competitive job market and your best people will be in the sights of head hunters. A key target for you in 2015 is to work hard to keep those best people.
Whilst a small degree of staff churn is viewed as healthy by most, keeping your best people will also make it easier to attract a quality replacement when you do lose somebody.
For an alternative view from the US on this subject, this article from Forbes magazine makes interesting reading.
The Procurement task is pretty straightforward, for a focused, intelligent and engaging professional.
Despite what you read in the job brief or the role description, and regardless of how complex your company tries to make the task sound, let me paraphrase it for you.
Your job is to identify, engage, and manage the best available suppliers, in order to meet or exceed your company’s appetite for external goods and services, as effectively as possible, with the minimum exposure to risk, and to do so better than your company’s competitors.
In doing so, you need to build and continuously develop solid and bilateral relations with your stakeholder colleagues, you need to ensure that your company benefits from market and process innovations, and you need to have the utmost regard for your company’s sustainability objectives.
Finally, whilst practising and honing your skills as a leader and a colleague, you also need to identify and develop your successor.
There. How hard is that?
Well the procurement scientists in the big consultancies will declare that view ‘superficial’, and, of course, ‘the genius is in the detail’, of which there is a considerable amount in the procurement role!
However, in your new role, or new company, just define your strategy to ensure that it meets the company’s goals, build a plan to deliver the strategy, and implement, coping with the normal managerial ambiguity, challenge, and fluidity, as you go.
Why are so many procurement professionals still missing some of the fundamentals, failing to build enough momentum, falling short on competitive edge, missing out on innovations, exposing their companies to undue risk, and failing to win a seat at the top table, to use that hackneyed old cliché?
The answer has been a mystery to me throughout my practitioner and consulting careers, but I think the penny has dropped.
Procurement is about managing multiple challenges and resources, all the time, about spinning as many plates as you can handle, and about continuing to challenge existing practice.
Those who fail, or those who fail to excel, just do not push hard enough, just do not use their intellect and experience to see past the most recent and most pressing urgency. Others become hooked on adopting core systems and practises that inhibit their momentum.
Think of any winning team – a sporting analogy works for most people – and think about the way in which the team leader has to continually experiment with new or modified tactics, to deliver their strategy and ensure that they stay on top and win – think of Mercedes’ recent success, or of some of the stellar achievements in the recent athletics events.
Doing what you or the company has always done is too conservative and pedestrian; slavishly following precedent and history is not enough.
Take the example of our business, where many years’ success as a pure-play procurement consultancy has served us, and more importantly our clients, well – we have numerous examples of companies and procurement people who have prospered under our process expertise, application guidance and outstanding delivery, achieved through the growth of their capabilities and behaviours.
We saw a shift in the market though, and concluded that having all our eggs in the same basket was not enough for the future.
Just like you, we dislike paying money up-front for a service that may or may not bring us a benefit.
Just like you, we get frustrated when we have to pay suppliers’ prices that may or may not be the best we can achieve – but we don’t really know.
And just like you, suppliers who fall short on their promises, exasperate us.
That is why we have applied our expertise in procurement, and our knowledge of supply markets to develop an additional service from our new company, Purchasing-Expert Limited (P-E), to provide a cash-positive, risk-free service, to help our clients focus on the big-ticket items, with confidence that they have delegated a cost-saving task to experts with long experience and success in their field.
P-E takes the burden of managing suppliers for value and cost-effectiveness away from the client, drives savings, without any adverse impact on quality, service or reputation, and provides the client with the benefits.
We recently worked with one client to reduce their business and IT consumables spend of £18,000 by around 30% per annum…then we spotted that their field service engineers were spending the same amount of money on the same type of items…we found 50% savings there too, reduced risk, and improved quality.
One less spinning plate for the client to worry about!
As a procurement professional, you too should be thinking about how well your strategy fits with today’s environment.
One client with whom we have just developed a global strategy to take them towards 2020, told us that he and his team had found our guidance and counsel through the process to be invaluable, and that they could not have done so without us.
We throw down the challenge to all procurement leaders to test whether their strategy is good enough, and whether they are spinning enough of the right plates.
Iain Stewart – December 2014
Iain is a Director of 105 Consulting Limited and Purchasing-Expert Limited www.purchasing-expert.co.uk
Earlier this month we published our latest Procurement Market Update where we reported on strong demand for procurement consultancy experience from the big four, the major multi disciplinary practices and established niche players.
The skills in most demand at Senior Consultant and Manager level are those required in major transformation projects, sector specific areas of direct spend and both the implementation and adoption of procurement technology like P2P, spend analytics and strategic sourcing suites.
There are also some excellent opportunities at senior management level including Directorships with Partnership potential for those that can contribute to practice growth through sales, leadership and delivery of procurement led projects.
We are working with some of the best names in each sector of the consultancy market to help them attract the outstanding talent they need to grow their practices in competitive but ultimately very favourable market conditions.
Whilst we are particularly interested in the consultancy expertise outlined below, several of our clients are also interested in outstanding candidates with predominantly industry experience. We’d like to hear from anyone with the following skills:
1. Senior Consultant, Manager and Senior Manager grade
- Specific sector experience in Oil & Gas, Mining, Utilities, Energy, FMCG or Pharmaceuticals
- Public sector transformation projects, mainly central government and MoD
- Procurement Technology – design, implementation, adoption and associated transformation projects.
2. Directors and Practice Leaders
- Candidates with outstanding careers in procurement consulting who offer the full breadth of leadership skills including business development and project leadership and can really contribute to growth of a practice.
Whether you want to work for a big four firm, one of the other major market leaders or a niche specialist we can help you find the consulting career opportunity to suit you. We welcome the opportunity to have confidential discussions with anyone considering their future in this area.
Experienced consultants should contact Andrew Daley via email@example.com or on 0161 924 2385 for a confidential discussion.
If you have a strong track record in the relevant areas of industry outlined above and want to move into consulting please e mail your CV to Raluca Pirvu with a view to arranging an initial discussion with Andrew.