Mind The Gap!!
Deloitte 2016 CPO Survey reports a widening Procurement talent gap.
As well as demonstrating that the primary emphasis for CPOs is still on Cost Reduction (74% of respondents which is a 5% point rise on last year) the Deloitte annual survey also highlights concerns that the talent gap is increasingly impacting the ability of Procurement to deliver. Lucy Harding from Odgers-Berndtson observes that ‘the continued increase in the skills gap is worrying’.
What I found even more interesting and worrying was that in the top 10 CPO focus areas there was no mention of addressing this talent shortage.
For me there are 2 massive themes at play here, and there’s a potential vicious circle that Procurement is facing.
Theme 1. It’s (still) all about Cost Reduction
Whilst some CPOs are reporting that they are seeking to contribute to areas of Value Beyond Savings (NPD, Cashflow and Organic expansion are all called out) the widening talent gap is impeding the ability to deliver. If Procurement talent is not in the right place to deliver against the primary (and arguably the relatively most straightforward) goal then this doesn’t bode well.
Theme 2. Widening Talent Gap
As I’ve mentioned this is a concern if it is impeding the ability to deliver Cost Reduction, but becomes an even greater issue when we think about Procurement expanding delivery beyond savings. The capabilities that Procurement needs to align with the business, influence and strategically challenge and deliver Value Beyond Savings are somewhat different to those required to deliver Cost Reduction. There is a greater need for soft and business skills, and the source of these may not be through traditional Procurement talent pools.
I’d be really interested to understand where you are either seeing these themes within your own organisations, and also where you are seeing the talent gap being closed rather than widening.
Simon writing as an employer and a supplier who has had to deal with many Procurement Professionals I notice a huge difference in buying standards. Some people talk about value but only care about low low price. They are the ones I find difficult to reach because often everything important over and above price is just filtered out. Despite lip service to quality, sustainability, suitability, record of service, flexibility etc they often just want you to limbo and the lower the better. The ones I personally rate as good business people, and the ones I would hire in Procurement as I just did just this month, realise that good pricing is a must. But in most business buying the service or product is often still to be supplied. It can and will vary on you if the price you strike is too low. So the really good ones get that great value out thumps low price almost every time.I find they only pick good suppliers working at sustainable prices. I think that type of vision and talent is quite rare in all business sectors and it needs to be valued highly because of that.