Talent Management & Development Strategy in Procurement
Given the tight labor market, procurement teams are challenged to find the best candidates to fulfill their talent needs.
Larger corporate organizations typically rely on traditional talent development practices; however, the most effective organizations also adopt innovative approaches to build procurement skills for the future. For some industries, it can mean moving procurement talent to lower-cost locales or tapping talent with a background in finance, operations, or information technology. For example, JP Morgan moved its procurement team from New York City to Plano, Texas, as part of the relocation of back-office staff. The company hopes to attract talent that prefers to live in a lower-cost region of the country.
Keep in mind that companies compete not only for customers but also for A-level talent than can help drive innovation and investment. For organizations in technology, life sciences, financial services and others, the procurement department is increasingly responsible for developing innovations in partnership with the supplier base. The procurement department must be able to engage suppliers in a mutually beneficial relationship rather than focusing on cost-containment alone. A new approach to procurement may require a new approach to talent.
The first step to improving your procurement talent management is to identify a strategy and the skill sets and experience that will best guide you to meet those goals. Are you looking for closer alignment between procurement and finance, R&D, or operations? Is your organization planning to adopt more digital tools? Will you be focusing on supplier-enabled innovation, so you need staff that speaks the language of the suppliers' industries?
Answering these questions will help you get an idea of the skills and experience the new procurement organization will require.
It's no secret procurement operations are going digital as the function moves from delivering cost savings to providing a strategic edge to the organization. However, the Deloitte CPO Survey (2018) revealed that procurement leaders were reluctant to deploy new technologies like AI, robotic process automation and blockchain day-to-day activities. According to the survey, 51% of the procurement leaders believed their teams lacked sufficient capabilities to implement a digital procurement strategy.
That's why procurement leaders are focusing on finding the right talent while also shaping existing resources through training and skill development programs to engage professionals with the skills to succeed in a digital world. However, what have been called "soft skills" are also a vital part of the mix: strong relationship building, facilitation and moderation skills.
Before you begin a recruiting drive, re-examine the existing talent within your organization. There may be talented negotiators and project managers working elsewhere in the organization that could contribute to your strategy. There may be people already in the department that could leave innovation efforts with suppliers to develop a new and product pipeline.
Behavioral and skills assessments can help identify the strengths of individuals so you can determine how best to utilize them for procurement. Behavioral skills can be more important than technical acumen because self-awareness and personal interaction can be more important than subject matter expertise in developing supplier relationships.
Training and mentoring programs can help existing employees gain insights and experience. More engaging, rewarding work also improved retention for top talent.
To attract the highest level of talent, your procurement organization must be prepared to offer continual development and advancement opportunities. The old days of hiring new graduates and giving them a week of orientation and then relying on informal mentorships and on-the-job training won't cut it anymore. Companies must realize the relationship starts with the recruiting process through onboarding, orientation, and the initial few months on the job. These are critical time frames where the employee is assessing the employer as much as the other way around.
The most talented individuals will be attracted by a forward-thinking strategy that will engage with the latest technology. The opportunity to re-shape a department and bring it into the digital age could be very attractive to those with leadership potential. Emerging leaders will also be intrigued by development opportunities, including mentors and inter-departmental exposure.
If you'd like to learn how leading procurement organizations are managing talent for the future, sign up for ProcureCon Indirect East 2020, taking place March 23-25 at the Omni Orlando Resort at ChampionsGate in Orlando, Florida. Download the agenda today to plan your schedule.