Recently, Pierre Mitchell, Chief Research Officer for Spend Matters, and David Pastore, Senior Vice President at Velocity Procurement, met to discuss how procurement can address the talent shortage that the global market currently faces. Velocity Procurement is a consulting services firm that helps procurement improve their financial results by investing in talent, processes and technology.
The premise
Businesses today find themselves at a decisions crosspoint in the global job market. Post pandemic, as one would expect, the job market has been left with a growing number of vacancies across all sectors and geographies, and many firms still struggle to fill them. The battle for talent has fueled wage inflation, and certain factors have also negatively affected the hiring market, specifically the war in Ukraine, supply chain disruption, increasing inflation and rising borrowing costs. A shortage in placements, and the issue of onboarding and retaining enough qualified and experienced team members, affects not just procurement, but the whole organization, leading it to underperform as its ability to make decisions efficiently and quickly can become diminished.
Pastore works ‘in the trenches’ helping clients on a daily basis to solve this problem. So it’s interesting to understand what he is seeing in terms of the talent shortage and what it means for businesses, their suppliers and other stakeholders. He explains that beyond the superficial hurdles, “there’s a lot more to the problem.”
Advice from the trenches
“Procurement is a journey of continuous improvement,” David Pastore explained. “And it is a great time to be in the procurement world. Probably the most important takeaway is you have to stay flexible and agile and keep your finger on the pulse of what direction the trends are taking us so that you can maintain relevancy as a procurement organization and/or get a competitive edge in your own company’s industry or market.” The particular trends that Mitchell and Pastore covered included budget shortages, using third-party talent as a supplement to in-house talent and how to design a practice that benefits a specific organization, rather than “dumping” technology on all problems in the belief it is a panacea.
Budgetary concerns came to the fore because of two simple reasons. First, procurement departments across the board have suffered budget shortages. Second, reducing the amount of spend is a clear way to prove procurement’s value. “Cost reduction may be so obvious that it’s easy to overlook or undervalue,” Pastore noted, “but with the inflation we’ve been experiencing, it’s more important than ever.”
Third-party talent becomes important because budgets often separate money for full-time employees from hired consultants. This mirrors a trend of hybrid procurement teams Pastore has seen in recent years: “They have their core team and then they’re strategically aligning consultants to different roles or responsibilities within the team.” After he and Mitchell explored the benefits of strategically using such a set-up, Pastore also offered the cultural aspects of a workplace that he has seen improve talent retention.
Technology is as important as ever. Even though we have entered 2023, organizations have achieved varying levels of technological maturity. Regardless of the degree to which one has implemented technology, Pastore believes no organization should mindlessly install programs. Technology is useful, but improvement can also be made in an organization’s processes. In fact, as Mitchell hits upon, the point of these operational upgrades is “to be able to focus on some of the more strategic things, which you can’t do if you’re bogged down in some of the more operational issues.” In the end, technology can alleviate work, but it cannot entirely replace the need for talent.
If you are experiencing similar issues and would like to understand better how to solve them, you can listen to the podcast in full here, or please contact Velocity Procurement for more advice.
