Labor Day — Layoffs and beyond: Will Sourcing Labor Get Cheaper?

Like most Spend Matters readers in the United States, I'm taking off to spend the day with my family, holding our last official summer barbecue. But that hasn't stopped me from thinking more closely about a subject that's been on my mind ever since it started to feel that Q3 and Q4 were going to become more challenging again from an economic standpoint. And that's the potential for larger numbers of skilled sourcing professionals to come on the job market after layoffs from both corporate and consulting jobs. Just last week, we made a couple of calls in the office to connect the son of a friend who had lost his strategic sourcing job at a professional services firm scaling back across its practice. And I know his situation is not unique.

As the potential for flat or negative economic growth begins to hit home inside companies, I believe we'll see layoffs pick up this fall and winter, even within procurement organizations, which are often the most effective engines of overall cost reduction inside many companies (this is an irony which I'll never fully understand). And as larger numbers of skilled employees come on the market, competing against not just similar types for jobs, but also BPO firms as well, (many of which are increasingly introducing skilled offshore sourcing resources as part of their offerings): heavy competition will occur. As this happens, I'll hypothesize that the wage for basic sourcing skill sets in new hires -- at the manager and lower levels -- will be pressured.

When I first entered the sourcing and procurement market, there was a mystique around those who focused on strategic sourcing, even fairly junior resources. There were only a few consultancies doing it with any scale, and former consulting resources were in hot demand by corporate procurement and finance organizations wanting to build their own internal capabilities. Perhaps this mystique will stay, but on this Labor Day, maybe we should all think twice about the salaries such skill-sets will demand in the future. And as we ponder about how best to labor in our careers going forward, maybe putting additional focus on areas like supplier development, supply risk and enabling source-to-pay technology might not be such a bad idea if we want to remain invaluable and command a premium within our organizations and on the potential job market as well.

Enough from me ... it's nearly time to marinate that salmon and get ready to pour the final G&T of the season.

Jason Busch

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