Home > News > Global CEO blog

Global CEO blog

Welcome to the Global CEO (UK) blog. Its aim is to draw attention to developments and ideas in the world of procurement and supply management and in the work of the profession’s Institute.

We change the blog monthly, and I would welcome your comments personally on ceoblog@cips.org

David Noble FCIPS

What wage rises tell us

This month’s UK PMIs may have given the UK little to celebrate, but signs of economic recovery are still fluttering through and there are glimmers of hope that the recovery may still be progressing albeit in fits and starts.

I say this because according to a report by the Resolution Foundation, private sector wages are growing at their fastest rate for 13 years which shows a healthy optimism for the future and a wide economic bandwidth where companies are doing so well they can offer more rewards to their staff.

The Resolution Foundation is an independent think tank focussed on the concerns of low and middle-income earners. This is their fifth annual report mapping out the scale of low pay and the groups most affected. Real wages have started to grow quickly in part, supported by low inflation, which at record-low levels is set to continue for some time yet.

Average weekly earnings in the private sector, rose between 3.4% and 3.6% between May and July - according to the Foundation, and showed the strongest wage growth since July 2002. In that year rises were at 3.45%; and in May 2001, they were at 3.45%.

However, these bright statistics for the private sector do come with a caveat. Such is the unusual rise, the Foundation warns that these levels are unlikely to be maintained in 2016 if inflation, that ever-looming cloud, rises. And, average pay is still well-below its pre-crisis peak, so there has been almost a decade of lost wage growth in total which will take some catching up.

The PMIs this month also certainly reflected this development in employment figures. The level of construction job creation was at a three-month high (link) and staffing levels in services and manufacturing remained fairly steady. The think tank is convinced that this increase in wages will support higher levels of productivity in new projects and a reduction in the level of risk aversion as companies start forging ahead.


Some significant challenges still lay ahead. The number of graduates in non-graduate roles is rising, and the level at which workers move between jobs and companies to achieve career progression and higher pay rates is also at a downbeat rate. This will inevitably be risky for a recovering economy and equally puts more pressure on employers to keep good staff and to offer incentives and training to keep them at a productive level.

As the world struggles its way out of recession, with some regions of the world more successfully than others, there is inevitably discussion around how a country’s wealth should be spent. Should a nation’s citizens be given additional opportunity or support, or should funding decisions be based on the scale of need on a global stage?
Overseas aid is often the first cut when a country makes savings to its national debt. Offering support for people on the other side of the world may seem too unreal and distant for many.  Especially if half of the stories around how mismanaged much of this aid is, lost to corruption and greed, is true.
A report in The Times recently found that £6billion a year, half of the UK aid budget is given to agencies such as the World Bank and United Nations to support the Department for International Development (DfID) who reportedly lack the capacity to administer spending correctly. Due to mismanagement and the lack of controls, some of this crucial aid makes millionaires of corrupt officials when it should be destined for the weakest and poorest in our global society. Of course, these stories are never simple or straightforward and the picture of what is actually going wrong is somewhat hazy. But, we know that procurement has a huge role to play in tightening up ways of discovering malpractice and reducing such losses.
And, change is afoot. The World Bank, for the first time ever since its inception is reviewing its procurement policies and procedures in a wide-ranging approach involving many stakeholders including 639 respondents from the private sector, 104 development agencies, 69 individuals from civil societies and including 764 individuals from 37 governments. Having already identified that corruption, bribery and fraud were responsible for the biggest losses and were the biggest challenges in aid procurement, they are involving more staff, greater audits and supervisions to stem the flow of these precious resources.
Their approach is currently two-fold. Defining what constitutes corrupt practices is being looked at as there is no provision to capture all instances of bribery. They are also looking at adding more rigour to the process of eliminating companies from profiting from World Bank funding if there is strong evidence of corruption.
These instances of pouring money down the drain are shameful , when the result is lives lost, opportunities missed and property destroyed when much-needed aid fails to reach those desperate to help. And it goes to show the public good the Institute can do by highlighting these corrupt practices and supporting change and developments in good practice. And as procurement professionals, we can all lead the way in our own ways…
I’m delighted to announce that our first Chartered Status professionals have been announced since our launch earlier this year.
Mandy Chippendale is a Fellow, consultant for MC2 Procurement, and active member of the CIPS community and took this path to enhance her learning and develop her professional expertise and was our very first. We also have Bryan Cook, FCIPS from Australia and Chief of Procurement at the World Bank who came in as a close second.
Both are highly-skilled professionals who continued their approach to lifelong learning by talking the Chartered Professional path.  It’s not an easy option with busy work and personal lives, but I’m gratified that these respected colleagues took this step for others to follow.