How Johnson & Johnson Prepares for the Procurement Talent Crunch
Global corporations today want Procurement to do a lot more than just curbing the cost of supplies. As they rely more heavily on the function to drive supplier innovation and reduce supply-chain risks, the urge to invest in human capital is more pressing than ever before.
The Looming Procurement Talent War
Digitalisation, the ubiquitous disruptor across industries, has been the obvious catalyst of this change. On the one hand, it’s driving efficiencies within the Procurement value chain in the form of digital spend analysis and smart contract management. On the other, its defining new job roles with diverse skillset requirements.
Standing at the threshold of a digital future, Procurement today has to deal with a serious skill gap. The talent crunch in Procurement is a real problem. Last year, a DHL-commissioned report warned the global supply chain space of an imminent talent crisis, as the demand for supply chain professionals exceeded supply at a ratio of six to one. The report highlighted changing job requirements as one of the major factors deterring fresh talent from taking up larger roles within the sector.
Research reveals that 33% of Procurement executives believe their digital Procurement strategies will enable them to deliver on their supply chain objectives and value. A worrying 51% however, are concerned that their Procurement teams don’t have the required capabilities to deliver on the modern Procurement strategies. They’re keen to go beyond conventional talent sourcing models and fill leadership capability gaps left by retiring Baby Boomers.
By 2020, more than half of the entire workforce will be comprised of Millennials (35%) and Gen Z (24%). Given this influx of younger workers within the working population, the time is ripe for companies to start focusing on Procurement talent sustainability. In fact, key industry players have already begun to build a pool of qualified leaders who have the potential to take the business to the next level.
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How are Bigwigs Coping with the Change?
Peter Fasolo, Executive Vice President, Chief Human Resources Officer at Johnson & Johnson explains, “Every innovative idea and product comes from our most valuable resource: our people.” Unsurprisingly, attracting and retaining workers who are adaptable has always been a top priority for the healthcare giant. In each of its subsidiaries, the Procurement function has been strategically positioned as a growth driver. Procurement professionals here are strategic partners who help in devising and implementing critical processes.
The company not only promotes a learning culture but also maintains shared liability between managers and employees, ensuring development opportunities are thoroughly recognised and pursued. These development programmes are designed meticulously and encompass a variety of topics, alongside interview simulations, intensive workshops, study courses, and assessments.
An example of this is Johnson & Johnson’s Procurement Leadership Development Program (PLDP), devised on the foundations of ‘Experience, Exposure, and Immersion’. It prepares participants for highly strategic Procurement roles right from the start. Those enrolled gain hands-on experience of diverse project and business challenges that are often considered barriers in Procurement. This holistic training continuum helps raw talent evolve into future Procurement leaders within the Johnson & Johnson group of companies.
Cultivating Leadership – A Necessity, Not a Wish List!
Talent development programs such as PLDP are often based on a simple idea –investing in people to ensure overall success for the organisation. Rather than adopting conventional training modules, these programmes can be far more effective in creating the next generation of leaders by mentoring talent through real-world assignments. Johnson & Johnson’s Procurement leadership development training, for example, includes several programs which provide hand-on experience in negotiations, supplier relationship management, contracting, leadership and management.
By enabling future leaders to take on such assignments, companies can empower them to anticipate risks, develop new skills, and combat potential crisis scenarios. Moreover, with an effective evaluation system in place, candidates can learn from mistakes to continuously improve and reach their full professional potential.
Going forward, as Gen Z starts populating workplaces and digital-first Procurement initiatives become a norm, it’s critical for the reigning CPOs to refresh their Procurement approach and not dismiss it as a simple cost-cutting measure. Along the same lines, the new generation must be educated about the strategic importance of this function as an innovation and growth engine.
Ralf Garczorz, CPO, Johnson & Johnson makes an interesting observation on the importance of building a ‘Procurement brand’ that leads by example and attracts top talent. For him, success has come by selling the story of Procurement:
"I engage with talent on a one-on-one basis, and so educate them on what Procurement can be in the future. It’s a place where there’s a lot of opportunity. And people are sometimes surprised by that."