Addressing the Procurement Staffing Shortage
The procurement industry is currently grappling with a significant staffing crisis. While layoffs have been sparse within the procurement sector itself, shortages of human capital and increasing cases of employee burnout have created a chasm in managing contract renewals and other critical functions.
The staffing shortage trend has been ongoing over the past several years. In 2021, Gartner reported that 52% of procurement leaders had seen their procurement staff decrease substantially over the previous two years.
This article aims to dissect this complex issue, examining potential root causes and raising pertinent questions.
Understanding the Staffing Shortage
There are several reasons why procurement departments are struggling to find talent.
One major factor is the macroeconomic trends that are impacting the industry. In recent years, we've seen a shift from manufacturing to service-based economies in many developed countries. This change has resulted in fewer individuals with the necessary skills and experience entering the procurement field.
Educational Gaps
Moreover, universities aren't necessarily preparing students for these roles. Most procurement positions require a unique blend of skills, including negotiation, supply chain management, and financial analysis, which are not always taught in a standard business curriculum. Universities might need to revise their curricula to ensure students are well-equipped to handle the responsibilities of a procurement role upon graduation.
Digitization and Automation
Alongside these educational gaps, the ongoing digitization and automation trends are also influencing the staffing shortage. Many procurement processes are becoming increasingly automated, requiring professionals to have a strong understanding of digital tools and technologies.
This emerging trend is creating a skills gap as existing staff may not have the required digital literacy, and potential new hires often lack practical experience with the tools and systems commonly used in the industry.
In addition, the transformation of procurement roles due to digitization can also be intimidating to job seekers who are not very tech-savvy. The fear of redundancy due to automation can deter potential talent from considering a career in procurement.
Furthermore, automation has led to layoffs in departments that work closely with procurement, such as logistics or supply chain departments, thereby increasing the workload of procurement professionals and exacerbating the issue of employee burnout.
Addressing this issue will take a concerted effort from all stakeholders involved, including academic institutions, corporations, and individuals seeking to make a career in procurement.
Making Procurement an Attractive Career Prospect
To attract recent graduates to procurement careers, companies need to reposition and market procurement roles as strategic, innovative, and integral to business success.
Strategies for Attracting New Talent
Some strategies include:
Internship Opportunities
Companies could offer internship programs specifically tailored towards procurement, providing students with hands-on experience that complements their academic knowledge. This gives them a taste of the industry, helping them understand the impact and value of procurement functions within an organization.
Enhanced Training Programs
Organizations could also invest more in their training and development programs. This would ensure that new hires are equipped with the necessary skills and knowledge about the industry's latest tools and trends, making procurement roles less intimidating for those who are not tech-savvy.
Competitive Compensation Packages
Offering competitive compensation packages can also help attract graduates. This includes not only salary, but also benefits like flexible work options, opportunities for growth and development, and a clear career path with potential for advancement.
Popular Fields of Study and Their Relation to Procurement
Today's college students are pursuing a wide variety of fields that can be leveraged in the procurement industry.
Business and Finance
A solid understanding of business operations and financial management is fundamental in procurement roles. Students in these fields develop skills in negotiation, business strategy, and financial analysis, all vital for managing supplier relationships and achieving cost savings.
Data Science
Data Science is another popular field of study that aligns well with procurement. The ability to analyze and interpret complex data can help in making informed purchasing decisions, predicting market trends, and improving supply chain efficiency.
Sustainability Studies
With increasing emphasis on responsible sourcing and sustainable business practices, graduates in sustainability or environmental studies can bring valuable insight into procurement roles. They can help companies meet their sustainability goals and manage the environmental impact of their supply chains.
By utilizing these strategies and understanding the relevance of various fields of study, companies can effectively attract and retain talent in the procurement industry.
Using Corporate Training and Development Programs
The concept of utilizing internal hiring and upskilling current employees also serves as an effective strategy to address the staffing challenges in the procurement industry. Employees who are already familiar with the company's culture, processes, and strategic goals can bring valuable continuity and efficiency to procurement roles.
By providing existing employees with the opportunity to upskill or reskill through in-house training programs, companies can ensure their teams are equipped with the necessary digital literacy and understanding of the latest procurement tools and trends.
This strategy not only helps in filling the talent gap but also fosters employee engagement and loyalty. It sends a positive message that the organization values its employees and is invested in their professional development. As a result, it can significantly reduce turnover rates, leading to a more stable and motivated workforce.
The Impact of Further Education Opportunities and Internal Advancement
Offering further education opportunities, such as partnerships with higher education institutions for continued learning or tuition assistance programs, can be incredibly beneficial. These initiatives encourage employees to enhance their skills and qualifications, which in turn enables them to take on more complex roles within the organization.
Similarly, clear pathways for internal advancement make procurement roles more appealing, as they provide employees with a sense of direction and ambition. Employees are more likely to stay with a company if they see potential for career progression and feel that their contributions are recognized and valued.
Creating Exciting Opportunities with Technology
The procurement industry is increasingly leveraging advanced technologies such as artificial intelligence (AI), machine learning, and blockchain to streamline operations, improve efficiency, and optimize cost management. From predictive analytics for better planning and forecasting to automated procurement processes and enhanced supplier risk management through AI-powered risk assessment tools, the integration of technology is transforming the procurement landscape.
This shift creates a lucrative opportunity to source tech talent. Individuals with a background in information technology, data science, or software engineering are highly sought after in the procurement sector. Their expertise contributes to developing innovative digital solutions, interpreting big data and analytics, and managing complex IT infrastructure. It also allows them to understand and navigate potential tech-related challenges or risks.
Moreover, the inclusion of tech professionals can foster a culture of digital transformation within the procurement team, encouraging continuous learning and adaptation to new technologies. This serves not only to solve the staffing issue but also promotes innovation and maintains the competitiveness of companies in the ever-evolving business environment.
Taking Staffing Challenges Head-On
There is no simple prescription for addressing staffing shortages across the procurement landscape, but there are steps organizations can take now to improve their prospects.
To learn more, don't miss ProcureCon Indirect West 2024. The event is happening from March 11th to 13th at the JW Marriott Las Vegas Resort & Spa in Las Vegas, Nevada.