In our most recent report into the market conditions for procurement professionals published in March we observed the following trends:
A much improved market for permanent roles
A more stable interim market than 2009
The return of the “battle for procurement talent”
Restraint on salary increases
The apparent recovery in certain key sectors e.g. banking & FMCG
The growing demand for leading edge SRM experience
Now three months later with the election behind us and fresh concerns expressed in the media about the economic recovery, we look at how the market conditions are affecting procurement professionals and their careers:
The improved market conditions for permanent procurement roles that we observed in March have continued and strengthened to a degree during this period. Demand remains strongest in the middle market (£40-£80k) although there is little evidence of much movement at the most senior end of the scale. It remains to be seen when there will be real movement in the Director of Procurement / CPO market, but with so little activity at that level over the last two years we expect the big roles to be fiercely contested when they do become available, possibly later this year.
The overall picture across all professions is stronger, with a leading research organisation reporting in May that demand for staff increased for the eighth month in succession, whilst the availability of candidates for permanent roles is down for the first time in two years.
Last quarter we observed some restraint on remuneration increases including bonuses, pay reviews and the increases in salary people seek to negotiate when moving companies. This remains the case and in the current economic climate we would expect that to continue but there are organisations that are already having difficulty attracting the talent they need because of an inability to pay “market rate” and it will be interesting to see how this situation develops later this year.
The interim market is currently in a relatively stable condition compared to 2009, but as we publish this report the real effects of the public sector cuts proposed by the new government are yet to be truly felt. There is a very strong suspicion with some early evidence to support it that spending on interim staff will be reduced, and this will be terrible news for the interim market as so many experienced procurement professionals have enjoyed some very lucrative contracts in the recent past on a variety of public sector projects.
Our fear is that the market will be flooded with contractors from the public sector over the next quarter, many of whom will be coming into a private sector interim market that has seen a substantial correction in day rates and margins over the last 18 months. This will lead to excess supply, causing further pressure on day rates and may prompt many career interim managers to consider going back into permanent roles. The early signs are there, and we have had many enquiries already from people concerned about whether their contracts will be extended or even terminated early so we will be watching this part of the market closely.
Most public sector senior managers that we asked for their thoughts on the subject were understandably reluctant to make any comment on the impact of the cuts at this stage, but one said “all recruitment, including approved vacancies, is frozen, and now has to be approved at a level which will inhibit us from even making the request!” We will be monitoring this situation closely and will comment on the impact this is having on procurement in our Q3 update.
In some of the key private sector industries the story is more positive with evidence that banking, retail, FMCG and leisure have continued the encouraging trends we observed last quarter. Furthermore both the technology and consulting sectors which we expressed concern about in our last report are now recruiting more in procurement and we believe this is a very encouraging sign.
Our focus on the SRM world as a result of our research and the growing evidence of a clear trend towards greater emphasis in vendor relations is proving to be very interesting. As our reputation grows as a specialist recruiter for the discipline, we are engaging with more organisations and leading professionals than ever before and we expect to see more evidence of greater emphasis in this area in the second half of the year. We remain particularly keen to speak to as many professionals with involvement in the area as possible. For more information please visit: http://www.edburydaley.com/supplier-relationship-management/ or join our network at http://uk.linkedin.com/in/edburydaleyandrew
There has been some further analysis of Supplier Relationship Management (SRM) trends undertaken by our research partners 105 Consulting which is available below. The findings highlight that whilst SRM is now considered critical to many businesses, it seems value is being ‘left on the table’ through insufficient focus, installation and application of SRM capabilities and practice. To access the report click here: http://www.105consulting.com/main/images/stories/pdfs/srm-practitioner-survey.pdf
Future research projects:
We intend to announce the subject for our next online survey and research report at the end of July and will be inviting you all to contribute later in the summer and autumn. Our previous reports are available here:
The growing importance of SRM: http://www.edburydaley.local/wp-content/uploads/2010/02/EdburyDaley-SRM-jan-2010.pdf
The impact of the recession on procurement: http://www.edburydaley.local/wp-content/uploads/2009/04/edbury-daley-the-impact-of-the-current-economic-climate.pdf