Starting with the EU referendum decision last year, how many of us have witnessed such a combination of global economic and political events which have created such high levels of business uncertainty.
Very few of us have ever experienced a situation like this in our business lives, yet many people from the procurement and supply chain professions believe it will fall on them to manage the inherent risk and navigate their organisations through it.
As we’ve asked in previous editions of our quarterly report on the procurement job market, do the skills exist in the profession to get this right?
It’s a question we’ve asked in the past about the implementation and use of spend management tools and now we ask it again about supply chain risk, currency hedging and all the associated considerations.
One potential source of comfort is the increasing power of technology to help organisations manage the aforementioned risk in their supply chains. For example, the latest generation of the Ariba solution will enable organisations to dig deeper into their supply chains providing all sorts of benefits.
Again the challenge is to find people with the knowledge and/or experience to really harness the power of these solutions.
Some of these issues were highlighted in the Recent Deloitte CPO Study In our opinion, this is one the foremost research studies for the procurement sector and several of their findings tie in with our comments above. Most notably Deloitte flag the following:
- The growing importance of risk management as a procurement priority
- 60% of procurement leaders do not believe they have the internal capabilities to deliver on their vision
- Talent: Whilst there is an increased requirement for leadership and digital skills there is limited change in the investment or approach to close the talent gap. With improvements in technology enabling automation, the skills of the past will not deliver the needs of the future – organisations should look to attract and develop the next generation of procurement leaders who will act as innovators, challengers, and digitally minded-thinkers.
“The skills of the past will not deliver the future” as Deloitte put it is a message we have been conscious of for some time. The profession needs to grasp this message, invest in training and development if its to continue to thrive in an ever changing world.
At Edbury Daley we work with companies who need to hire professionals with experience of leading edge technology solutions and the more advanced procurement and supply chain skills we refer to above. As a result of this work and our regular research, we know where to find and how to engage the best people in these areas in conversations about potential career moves.
If you need to hire these skills, we are the specialist recruiters who can help you succeed in a competitive market. Contact us via email@example.com
We’ve observed significant growth in salaries in these sectors in the past three years and we’ve attributed much of that to the supply and demand equation in markets characterised by skills shortages.
However in the final quarter of 2016 we started to notice some changes of mentality in the market as some organisations responded to the climate of political and economic uncertainty.
Given our extensive network in these sectors we are uniquely well placed to research this subject and spent part of January 2017 questioning business leaders in our network about their approach to end of year pay reviews, basic salary and bonus differentials. We specifically asked if Brexit, Trump or any other factors had a tangible impact on their decision making.
We have received an interesting range of responses to the question “has the current economic climate had any impact on your decision making around salaries and bonuses for 2017?” Here are a selection of the responses that reflect the overall picture:
Spend Management Technology
Several cases here which demonstrate the range of performance across the sector:
Case 1 – Spend Analytics Company
“We are doing really well so growth is very much on the agenda and there has been no real Brexit impact on our sales. However our overseas salary costs for the team have gone up because of the weakness in the pound so we are looking at reshoring some of that team.
What has changed is that we are giving relatively small pay rises (in line with inflation and no more generally) but offering the opportunity to earn more through better bonus schemes. We are moving away from purely annual to monthly, quarterly and yearly bonuses, the first two of which are based on personal and the yearly is based on company performance. This has two benefits – it mitigates against the rising salary costs and it encourages certain key behaviours that we want to develop.
So in summary the Brexit impact has increased our salary costs due to weakness of pound and led to realignment of fixed versus variable remuneration.”
Case 2 Mid Tier Spend Management Company – UK focused
“We haven’t experienced any real change as yet, we think it’s more likely next year. We’ve had a great year so most people have got 100% of bonus capability. There are pay reviews to come, so any early signs in 2017 maybe factored in but no specific concerns as yet.”
Case 3 Mid Tier Spend Management Company – International
“We missed several key targets last year, largely because we had to address some issues with our product, so pay rises weren’t really on the agenda anyway, but there has still been a tangible shift towards greater bonuses to keep sales people motivated without exposing the business to higher basic salaries.
Client retention is at the top of our agenda, so we are heavily bonused for that.”
Case 4 European arm of a US owned Spend Management Company
“Nothing has been announced in terms of any official policy, however its noticeable that the payment of ad hoc bonuses has increased for high performers whilst base salaries have stayed the same.”
Case 5 Mid Tier Spend Management Company – UK focused
We’ve made a small number of redundancies because it’s clear that P2P deals aren’t progressing through the pipeline the way they were a year or so back. Analytics and invoicing are our strongest areas currently. Also professional services is doing quite well which suggests customers are sweating what they’ve got rather than going to market for new technology. We also saw signs of declining overall investment in 2016.” However this company hasn’t materially altered it’s approach to salaries.
Further Anecdotal Evidence
We know from our conversations with business leaders and established sales people that the bigger players are enjoying really healthy growth, and several of the sales people are earning impressive bonuses based on exceeding ambitious sales targets.
The market leaders continue to hire aggressively across Europe, both from direct competitors and other neighbouring sectors suggesting they remain bullish about their growth prospects.
On balance we believe the sector remains in rude health as companies with a strong product offering and clear go to market strategy continue to thrive. That said, there is clear evidence of keeping costs under control and a greater desire to retain staff through better performance related pay rather than big increases in fixed pay.
Big multi-disciplinary consultancies have, in our opinion, been falling behind on salary and particularly bonus numbers for some time now but continue to command a lot of loyalty from their staff. However it’s increasingly difficult for them to hire externally at Senior Consultant, Manager and Senior Manager grades because many other consultancies and corporates are paying better salaries.
Furthermore in procurement technology consulting some of the smaller niche players are consistently winning projects against bigger consulting players on the strength of greater expertise and agility combined with lower costs, so this is something they have to contend with.
One of our regular niche consulting customers in the technology sector told us:
“We had a really good year in 2016 and our pipeline is as strong as ever so there’s no need for us to factor any wider concerns into our salary and bonus decisions at this stage. Our business has a nice spread across Europe, so we expect to be insulated from Brexit. Also we’re not really involved in the US so we can’t see any direct impact from Trump at the moment.”
A concern for this type of organisation is that their staff are being targeted by the bigger consultancies so staff retention is a key driver. Thankfully they are in a position where they can reward their staff well which often makes them unaffordable for the bigger consultancies who have rigid salary bands.
If you would like to discuss any of the issues raised in this post or want up to date salary advice for yourself or your team, please contact us via firstname.lastname@example.org
Edbury Daley is widely acknowledged as the market leading recruiter in the Spend Management sector in the UK. We are now bringing hiring success to our clients across Europe.
Our recent projects have included:
- Business leaders for appointments in UK, France & Northern Europe.
- Regional sales leadership roles for Europe, Nordics, France, Italy, Sweden & UK
- Senior procurement technology consulting roles in the UK, France, Netherlands, Germany, Italy & Spain
- Project Management & Implementation appointments in England, France & Germany
We offer broad coverage of Procurement Solutions which include Analytics, Payments, Vendor Management Solutions and Supply Chain Finance.
Our international network of contacts across the procurement technology sector allied to a deep expertise in the procurement profession enable us to provide an unrivalled service. Here’s how:
- Identifying proven sales people with experience of selling to finance and procurement audiences across Europe.
- Head hunting geographically flexible Implementation and Transformation Consultants with experience of international projects.
- Building an outstanding network of EU nationals currently working in the sector wishing to move to the UK, and those already in the UK willing to work/relocate across Europe.
If you need a recruiter who understands your product, your target markets and the availability of the skills your business needs to grow then it’s time to get in touch with us via email@example.com
If you want to read our quarterly analysis on the recruitment market conditions affecting the sector, and gain evidence of our expertise in the market you can access the reports here: The Procurement & Spend Management Quarterly Market Updates.
To keep up to date with news from the sector and the career opportunities we are working on please visit http://www.spendmanagement.co.uk/ or follow us on Twitter via @SpendMgmt_UK or @EdburyDaley
Edbury Daley is considered by many to be the leading specialist recruiter in the Spend Management sector. We have a long established presence in the UK market along with significant experience of recruiting on behalf of our clients across Europe, the US and Asia.
Our new website is designed to offer everything you need to know about the sector, whether it be as a hiring manager or with the emphasis on your own future career options.
We cover the latest industry news and jobs along with helpful advice on recruiting and looking for new career opportunities.
You can take a look at the new site here – http://www.spendmanagement.co.uk/
Andrew Daley was recently interviewed by one of the leading procurement and supply chain job boards www.supplychainonline.co.uk
The interview covers Andrew’s opinions on specialist job boards, the use of social media in recruitment and his concerns about the future of Linked In. He also talks about the benefits of forming effective working relationships with recruiters and the qualities to look for in a potential new boss.
You can read the full interview here: