SMEs must see procurement as a cost-saver

27 March 2012

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27 March 2012 | Angeline Albert

Small businesses should not see hiring procurement staff as a luxury but a way of reducing their supply chain costs by 20 per cent.

That’s the view of Christina Langley, managing director of recruitment firm Langley Search & Selection, who argues small- to medium-sized enterprises (SMEs) could recoup the cost of hiring a procurement manager through the savings they would deliver.

With the starting salary for a head of procurement working at a UK SME being around £40,000, Langley said: “A general rule of thumb is that a procurement professional will be able to reduce a business’s non-staff costs by 20 per cent.”

She added: “Although some small businesses still see hiring a procurement manager as a luxury, those who take the plunge quickly see tangible cost savings. Big businesses are regularly looking at their cost base, SMEs tend to be too busy on day-to-day issues so easy-to-achieve savings just sit there.”

The recruitment company argues small businesses often stick with existing suppliers and roll over new contracts from one year to the next rather than spending time finding a supplier or negotiating prices down.

A spokesman for the Forum of Private Business said: “There is a lot of time involved in shopping around for things like utilities services. We did some research last year which showed small businesses are spending more on consultants. Small businesses would benefit from using procurement staff. It might be seen as a necessary evil but the use of intermediaries can save more than the cost of using them.”

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