Talent attraction and retention remains top of mind for most CPOs as we enter 2023 in the midst of a general skills shortage in Australia and New Zealand.
Recruitment company Hays even says the demand for procurement professionals could be at an all-time high.
New research from Hays Salary Guide shows seven in 10 professionals (68%) surveyed believed they would be financially better off by switching jobs.
During PASA’s annual CPO Round Table in November last year the issue of staff retention was top among the top 15 issues raised by the CPOs as we exited the pandemic.
Tim James, Managing Director of procurement at Hays, says the race for talent is not slowing down.
“We’re seeing highest demand for Procurement Specialists, Category Managers, Contract Managers, Contract Administrators and Procurement Managers.
“Talent attraction remains competitive, with experienced procurement professionals in demand.”
“With vacancy activity strong, staff shortages are the main constraint on growth for many employers. They don’t see the shortage of skilled procurement professionals easing any time soon.”
“In response, employers are reviewing their attraction and retention strategies, focusing on benefits, training and wellbeing.”
Procurement teams in Adelaide, Perth and New Zealand are understood to be battling the retention issue the hardest. Many are losing talent due to the lure of high paying defence and city-centric roles.
Research conducted by Skill Dynamic shows procurement and supply chain is haemorrhaging skilled staff, especially at junior level.
“Over a quarter of junior supply chain professionals plan to leave their role
over the next two years,” Skill Dynamic’s ‘Breaking the skill loss cycle’ paper found. And almost as many junior procurement professionals plan on exiting in the same time frame, the research says.
The research also found procurement organisations are “undeniably in growth mode with 27% of procurement leaders looking to grow their teams.”
More than half (56%) of senior procurement professionals surveyed say employee retention had decreased over the past three years. A further 57% say this was causing problems within the profession.
DHL Supply Chain indicated the skills drain in the procurement and supply chain sector is not down to one factor and suggests four main issues are at play:
- Demographics: A small pool of experienced managers to replace retiring baby boomers, creating a lack of middle managers with experience.
- Changing Skill Set: As experienced leaders retire, companies are looking for replacements who have a broader skill set than those who came before them with greater emphasis on technology.
- Cost Cutting Measures: Many companies have reduced headcount and cut back on training and development programs. This is denying some workers the opportunity to develop skills needed for the modern supply chain.
- Lack of Training Programs: Developing countries don’t have enough educational institutions offering courses in logistics and supply chain management.
Across the professional roles in general, Hays’ research found for skills in highest demand, employers offered a salary increase up to CPI to secure a candidate.
There’s also a small increase noted in employers offering a sign-on bonus to candidates. A Linkedin survey by Hays found 8% of 18,045 professionals surveyed said they’d received a starting bonus in the past six months.
Five ways to retain your procurement staff
- Invest in procurement education and training for current and prospective employees: Investing in education and training is a key way to develop a skilled and capable procurement team. This can include formal education programs, such as procurement certifications, on-the-job training and professional development opportunities. By providing your team members with the knowledge and skills they need to excel in their roles, you can help to improve their performance and contribute to the overall success of your organisation.
- Create mentoring and development programs: This can involve pairing experienced procurement professionals with less experienced team members, to help transfer knowledge and skills and accelerate the development of new team members. Not only does this help to build a more skilled and capable team, but it also helps to foster a positive, motivated and supportive work environment.
- Actively recruit and work to retain top talent: To navigate the skills shortage in procurement some CPOs PASA has spoken to are recruiting from within by encouraging staff to take a leap into procurement. Additionally, by actively recruiting from elsewhere in the business brings skills and capabilities outside of traditional procurement.
- Leverage procurement technology and automation: One way to navigate the skills shortage in procurement is to leverage procurement technology and automation. Using e-sourcing tools, spend analysis software, and other procurement technologies can augment the skills of your team and improve efficiency and effectiveness.
5. Encourage cross-functional collaboration: Encouraging cross-functional collaboration is another effective way to navigate the skills shortage in procurement. By fostering collaboration between procurement, finance, and other teams, you can help to improve the overall performance of the procurement function. This also provides opportunities for team members to learn from one another. Adding to this, cross-functional collaboration breaks down silos.
PASA Connect: Procurement Professional Development
Need training for yourself or your team? Sign-up to PASA Connect. It’s our peer-to-peer membership network designed specifically with the best content and webinars to support procurement professionals learning and development. Attend regular short webinars on every topic relevant to a modern and busy procurement team.