The Supply Chain Talent Gap: What’s a Procurement Team to Do?

Spend Matters welcomes this guest article by John Ryan Shaw, vice president of customer success at BravoSolution.

The clock is still ticking for procurement. The pressure is not new – we’ve known for years that by 2025, 60 million baby boomers will exit the workforce, leaving a gigantic gap in talent, with only 40 million millennials ready to take their place. In one recent study, 60% of companies said middle management faces the greatest drought in talent. Businesses are not able to mentor new talent and move them up the ladder fast enough.

The entry-level view is challenging as well. Millennials are coming into the business with different job expectations than previous generations, while their employers are expecting professionals with a strong ability to analyze data and metrics. Yet in reality, soft skills are just as important in a successful supply chain career as the technical know-how. This misalignment between expectations and reality is leading to intense industry-wide competition for fresh, rising talent.

All of this is happening while the skills required for success are evolving rapidly. Companies in all sectors are having trouble recruiting and retaining the right talent mix to fit their needs.

To compound the challenge, world-class procurement organizations are transforming the basis for sourcing strategies from category management (CM) to supplier value management (SVM). The focus is now on selecting the right sourcing partners and building relationships with them over the entire supplier lifecycle, rather than looking at sourcing discrete product categories. This means higher standards for procurement leaders that go well beyond category expertise.  Examples include increased business and leadership skills, technological prowess, knowledge of foreign policy and regulations and the ability to handle cross-functional complexity. This holistic profile of the ideal supply chain candidate raises the bar of what is required for procurement organizations to thrive in today’s dynamic and relationship-driven landscape.

According to Supply Chain Insights, only 18% of companies have a strategy in place to close this impending talent gap. I believe the organizations that solve this problem will also be most likely to be leaders in their industry and will contribute most to the procurement’s strategic influence in the boardroom.

So, what is a procurement team to do? First, make talent management a formal process in the organization. This means accountability. A few tried-and-true strategies for nurturing exceptional talent and help close the gap:

  • Identify your gaps. What are your strengths and weaknesses when it comes to talent? Be sure to prioritize them against your business strategy. Breaking a large talent gap into discrete, prioritized parts will allow you to get started and avoid analysis paralysis.
  • Get Creative. The use of non-traditional talent can bootstrap short-term initiatives. To bridge shorter tenures and diminishing loyalty to a single company, contractors, third-party providers, temporary labor and contingent workers are becoming more common. Can you rotate people into other areas of the company to help them pick up key skills? Do you have an internal change management office that could use help and simultaneously develop a team member’s soft skills? Building mentoring and knowledge sharing programs and establishing individual management by objectives (MBOs) will keep management accountable for following through with cross-training initiatives and will provide employees with the learning opportunities they need to do their jobs effectively. In addition, fostering growth through role expansion and training can be tremendously helpful:
    • Build out cross-training programs to give employees a better understanding of the entire business and promote from within to foster company morale and incentivize current employees to work hard.
    • Recruit from engineering programs. You can teach the supply chain concepts, but it’s harder to teach math and engineering on the job.
    • Develop relationships with universities and leverage company alumni to demonstrate and build excitement for supply chain career paths.
  • Lay out your plan. Once you’ve identified your gaps and their solutions, lay out your hiring and training plan. With cross training and external hiring cycles typically lasting at least five months, developing and nurturing your internal talent will not be an overnight process. It’s critical to understand where you are on your journey and where the business needs you to be. Every talent gap you close should take you one step closer to reaching those goals. If you are moving toward SVM, the plan should show you the road you’ll follow to get there.

It’s all about outcomes. Keep your eyes on your overarching business strategy and measure the impact of your talent management and training programs against that strategy. If you’re not reaching your strategic business goals, chances are you still have gaps in talent that are limiting your ability to succeed. Tweak your training programs so you’re better aligned with your business objectives.

As you close gaps, identify new ones and set a new, higher bar. Continually assessing your long-term goals and adjusting your plans accordingly will not only help you achieve the business results you want but will also attract the talent you need to get there.

The supply chain talent gap isn’t a new problem. It’s been top of mind for CPOs for quite some time. But it’s still a hot topic today for a reason – with procurement making its transition from a back-office function to a strategic linchpin of the organization, the typical career path and skills needed for success in the industry is changing rapidly. If we don’t start hiring and nurturing our talent effectively, we’re going to lack the skills and resources we need to keep the progress we’ve made going.

Voices (3)

  1. John Ryan Shaw:

    Thank you Charles and Peter. It seems the 3 of us are aligned.

    In my personal experiences, it is very difficult to find a successful professional who does not recognize the value of talent’s contribution to procurement. Yet there is a distance between that recognition and the implementation of systematic talent management programs within the procurement function. My hypothesis is that Senior Leaders who have been fortunate enough to have the opportunity to work on truly talented and high performing teams, and who have seen what they can do firsthand are likely the same leaders that are passionately working to foster the same environment for their own team.

    There is really something to be said for looking at a successful project, and realizing that you were on a team that accomplished something much bigger than the sum of the individual contributions. That type of experience sticks with a person and shapes their perception of the value of talent management.

    – John

  2. Charles Dominick, SPSM, SPSM2, SPSM3:

    “Bravo” for the excellent post, John!

    For too long, the technology providers in our space have positioned their solutions to be the be-all-end-all for procurement transformation. They have hidden the fact that it takes good people to make a procurement transformation – and their solutions’ contribution to procurement transformations – successful.

    Kudos for acknowledging the value of a good talent management plan. Technology and talent management are not mutually exclusive approaches to procurement transformation. Rather, they are two complementary – and necessary – components of transformation!

    1. Peter Smith:

      Good article John, good comment Charles! If you look at “procurement” as a business, we only have two raw materials with which we create our product to add value – people and tools (chiefly technology these days). Everything else has to follow from those factors, and any organization that is not thinking seriously about both will not be truly best in class – or anywhere near that.

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