Investing in Your People

Digital transformation has been a huge deal in procurement in recent years as organisations leverage the power of digital technology to make their purchasing departments run more smoothly and effectively than would otherwise be possible.

However, this push to invest in technology and process has led many businesses to neglect another critical part of the procurement equation – people.

“Investment in processes has not been matched with parallel investment in people,” said KPMG. “The current [talent] shortages will only get worse, so we need to focus on talent management, and view procurement as an essential competence for all senior managers”

Talent Shortages

The global COVID-19 pandemic and Great Resignation have only served to amplify the talent acquisition challenges the procurement industry has been feeling for almost a decade. With many graduates looking for jobs in tech and other industries, procurement has been struggling to raise its profile and appeal as a career path for young people starting out in their adult lives.

Some procurement organisations have sought to close this gap with technology and automation – letting AI powered computers and other machines perform some of the heavy lifting – but all this does is kick the can up the proverbial road as you still need to acquire talent to make sure the machines keep running.

Therefore, people are always going to be part of the equation and procurement organisations looking to succeed in the modern arena of business need to invest in them or risk being left behind.

Investment in People

There are several ways procurement organisations can make the industry more appealing as a career path outside of investing in technology and optimising processes to require less labour.

• Focussing on the retention of high value procurement professionals
• Improving training capabilities
• Increasing compensation
• Holistic talent management
• Increasing outsourcing
• Developing more compelling career paths

Procurement needs to be integrated into general management and training programs and invested in with the same profile as all other functions within the organisation – complete with holistic cross-organisation promotion paths.

Alternative service delivery models such as outsourcing and shared services can also help. However, attracting and retaining top talent within your organisation will always be preferable – in much the same way purchasing a house is preferable to renting – as you will experience a far better ROI over time.

“By raising the profile of the function, companies can attract bright people from other parts of the business, either permanently or on job rotation,” continued KPMG. Optimizing procurement by investing in talent and technology gives team members a wider, more strategic outlook on the business. This in turn should place Procurement alongside the likes of Finance, Operations and Sales & Marketing as an essential route to the c-suite.”

Final Thoughts

Investing in people gives procurement the best chance possible of beating the recruitment and retention crisis and developing a strong and profitable pool of employees who augment your purchasing departments while benefitting from long-term training and career development in return. Keeping your procurement in house where possible and investing in these aspects of human resources will give the best chance of long-term viability of your teams and organisation for years to come.