Is the CPO market about to come alive?

The battle for the best talent is on again!

Was the market slowed by the end of the financial year?

The trends we observed back in our Q1 Update have largely continued with the market conditions for procurement staff remaining amongst the best for any profession.

Our observations are as follows:

The permanent market is still busy, particularly at mid level e.g. Category Leadership & Sourcing Manager roles.  Salaries are creeping up again after a flat period and there is definitely competition for the best talent in the busiest parts of the market.  This is great news for both job seekers and of course the recruiters.

After a stagnant period at the most senior end of the procurement market we have been encouraged to hear of some recent appointments at CPO level combined with strong rumours of some imminent high profile moves.

This is potentially very good news as movement at the top end of the market tends to filter down into a busier recruitment market generally, and after a slower period this is really encouraging for those who feel there career progression has been slowed by the recession.

There has already been some movement at “Head of Procurement” level in various parts of the private sector, particularly with small to medium size sourcing functions and most notably in the FMCG sector.   Again this is long overdue and very much welcomed by all those with an interest in the market.

There continues to be a healthy demand for the brightest young talent, particularly those with geographical mobility.  This is attracting ambitious career focused people and Chris McGowan has been particularly active identifying the cream of the “graduate plus 2-6 years experience” pool for some of our key clients.

We are currently seeing greater demand for indirect spend expertise than direct, even in some of our more traditional manufacturing clients.

Packaging & Ingredients remain the busiest areas of direct spend requirements for Hannah Jackson in the FMCG sector, but she has also observed an increase in indirect spend related roles since her return from maternity leave.  Hannah has also noted that the Leisure sector is finally coming to life after a particularly slow couple of years.

There are more Technology, Events, Marketing and Travel focused Category roles available than has been the case for some time.  These areas are currently busier than other indirect spend categories like HR and Facilities which were strong last year.

We are seeing plenty of evidence that Technology spending continues to recover but most of the category specific roles in this area are on a permanent rather than interim basis.   So there is real competition for the best full time staff but interim rates have yet to recover and there are still plenty of good contractors looking for their next assignment.

Last year we reported an influx of public sector candidates onto the market.  This has slowed significantly in 2011.

The increase in P2P and Compliance roles that we noted last year has been sustained but there has not been as much activity in SRM and Vendor Management as there was in 2010. This is down by nearly 25%.

An exception to the generally positive theme is that there was a quieter period in late March and April where the market slowed noticeably.  A number of hiring managers we spoke to suggested this was principally due to the end of the financial year and associated budgetary constraints.

There was certainly some evidence that recruitment processes slowed in the run up to this period and it was compounded by the Easter holidays being closely followed by the Royal Wedding.  This prompted a number of people to take time off in between the bank holidays which also caused delays to recruitment processes.

Day rates and interim margins are yet to recover to pre recession levels but there is evidence that there is less downward pressure on rates and margins than there has been.  It will be interesting to see when day rates really start to recover.  We doubt there will be significant improvement this year.

There has been a noticeable increase in demand for experienced Consultants from a broad range of different Advisory businesses, whether they are delivery focused procurement roles with niche players or supply chain strategies and systems roles with the international consulting businesses.  This had been anticipated since early last year and is now happening across the sector.

There appears to be a little more freedom on salaries than has been the case for the last couple of years with some businesses more willing to flex budgets to attract the best talent.  We still have some way to go for this to be the norm as it was 2-3 years ago but again this is another sign that market conditions, particularly in terms of salaries and competition for the best talent, are returning to pre recession characteristics.

So in summary we would say that the underlying market trends are positive, building on the upturn experienced in the last nine months, but we estimate that the slower period we describe above reduced activity by up to 15% over the period in question.

We welcome your comments or feedback on any of the issues raised in this article.  You can post them here http://www.edburydaley.com/wp/category/news/

If you would like advice on identifying the best available procurement talent for your organisation please contact Andrew Daley on 0161 776 4603 or via andrew@edburydaley.com

If you are looking for a new role in procurement please contact Chris McGowan on 0161 776 4605 or via chris@edburydaley.com

Hannah Jackson who specialises in FMCG & Leisure can be contacted on 0161 776 4608 or through Hannah@edburydaley.com