There have been few positives to come out of the Covid-19 pandemic, but for those working in procurement it has ushered in something of a new era
Disruptions shook supply chains to their core this past 18 months, with fears around the supply of critical components, general stock shortages, staffing issues, as well as rising prices and cash flow concerns, collectively raising the profile of procurement and supply chain management – and those who work in it.
As such, the profession has gained a powerful injection of interest and respect. According to the CIPS/Hays 2021 Procurement Salary Guide and Insights survey, almost three quarters (73%) of procurement workers said directors and heads of other departments now truly understand what the function offers, and said procurement is “very much valued” in the organisation. For more than half of responders (59%), they are more likely to be involved in projects from the start.
This shift in the landscape will have wide-reaching positive impacts, from more engaged and effective workers to better outcomes for their organisations which will benefit from their skills. In this same timeframe the function itself has had to adapt to Covid-19, which is reflected in the types of challenges professionals now face.
In the private sector, more than half (53%) of people said managing supply chain risk is their biggest issue, while 49% pointed to recovering from the pandemic. These issues are also the highest-ranking challenges for the charity and not-for-profit sectors, at 48% and 46% respectively, and were placed much higher than managing costs while maintaining quality, at 39% and 38%.
However, in the public sector, recovery from the pandemic remains the top priority for 58% of responders, followed by changing EU procurement regulations in the wake of the UK’s departure from the EU (56%).
Greater exposure to strategic initiatives, in addition to the traditional remit of cost reduction, has left many in procurement relishing renewed responsibilities and the opportunity to exercise their skills.
And this appetite for challenge plus reward shows, as three-quarters of procurement professionals are now equally or more satisfied in their roles than they were 12 months ago. Significantly too, almost half (49%) said working in procurement and supply management was a conscious choice, a strong indication that the function is growing in recognition and desirability.
The skills needed to perform the role effectively are also evolving. Soft skills in general were found to be of key importance for all sectors, reaching the highest in the private sector (95%), followed by the public sector (92%), then charity and not-for-profit (91%). While relationship management has always been a fundamental asset, the pandemic shone a spotlight on the value of building meaningful supplier partnerships – elevating it to an essential and highly sought-after soft skill.
Overall, more than half of respondents highlighted supplier relationship management as a top skill, which was even more coveted in the public sector at 57%. Next was stressed the importance of communication, with negotiation coming in third. Other prominent skills included internal stakeholder management and leadership, as well as traditional attributes such as sourcing and contract management.
Malcolm Harrison, CIPS group CEO, said: “It is the soft skills of leadership and stakeholder management that deliver on business goals. This as a theme has been consistent over recent years and will likely remain core in the next few years too. For example, businesses with strong relationships and supportive approaches for suppliers in difficulties were the ‘customer of choice’ when the tables were turned, and when the customer relied on the availability of essential supplies to sustain their organisation.”
The soft skills gap
Finding the right procurement talent is increasingly becoming an obstacle, as half of organisations said they have struggled to meet this need in the past 12 months. The biggest challenges here are finding people with the right sector skills and experience (stated by 61% of respondents), followed by a lack of technical skills or training (52%) and meeting salary expectations (43%).
This is forcing businesses to rethink their recruitment criteria, said Scott Dance, director of Hays Procurement & Supply Chain: “If you’re a sound procurement professional, you can work in the private sector or the public sector, or go from banking to oil and gas, within reason. They are now looking more at what skills someone can bring to their business.”
With increased demand, and respect, for procurement professionals, the sector has recorded salary increases above the national average in the UK, despite the current financial climate. The average procurement professional’s salary has risen by 5% in the past year, compared to a national average of 4.2%, and 54% have received a pay increase over the past 12 months. This takes the average salary to £47,435. Supplier relationship managers now earn an average of £54,100; a 10% increase on 2020.
The report also highlighted the value of MCIPS as a qualification. Over half (54%) of those with MCIPS received a pay rise, and earned higher salaries across all levels. Those working at managerial level received an average of 24% more, while this figure stood at 18% for those at operational level and 12% for professionals.
Organisations aren’t solely relying on salaries but are making use of other methods to attract and retain talent. For instance, 52% of responders were eligible for a bonus during the past 12 months at an average of 8.5% of their salary.
Some 41% of respondents felt their work-life balance had improved since the pandemic, largely due to remote working, and while many are keen to get back to a “normal” routine, it will be hard for many to give up on these enriching flexible arrangements. Across all sectors, staff want to retain a hybrid environment, with the most popular option being to work remotely for the majority of the time, followed by those who want a 50:50 split between their home and the office.
Conversely, the study highlighted a number of desirable but unfulfilled benefits, including private medical insurance, company car or allowance, and income protection or health insurance, indicating areas for improved offerings.
Making an offer
For employers, a further point of concern is that 27% of respondents said they expected to move to a new role in the next six to 12 months, with those in the telecoms (57%) and IT sectors (42%) most likely to seek a fresh challenge. When it comes to motivations for moving, 73% cited salary while 71% said that they sought greater job security.
One possible solution to a shortage of talent at a senior level could be the use of interims, which Dance said has so far proved to be remarkably resilient to concerns around the possible impact of IR35. The survey found 55% of public sector firms that make use of interims do so to bring in additional resources, with 41% in the private sector doing the same.
Other reasons for turning to interims include to work on a particular project or cover a period of absence, with the added benefit of using their generally longer years of experience.
For all other levels, organisations will benefit most from breaking away from standard and restricted benefits to a system that reflects the needs of a broader and more specialist skilled future workforce. Generous salaries and bonuses are always welcome, but company culture is evermore so.
Extending the custom, negotiable job packages generally reserved for senior roles to all critical staff will offer more balanced working environments which are likely to meet their needs for longer and retain both key skills and happy, fulfilled employees for the future.