The Amazon Effect: Competition for Procurement Talent

We enjoyed an article on the Spend Matters US site from Nick Lazzara and Naseem Malik, of MRA Global Sourcing. They talk about the “Amazon effect”, not on the firm’s obvious e-commerce competitors, but on any firm that looks to hire top supply chain talent.

As Bezos’s behemoth continues to expand in multiple locations, including the addition of the impending HQ2, it is disrupting hiring and retention efforts in all business functions. Top procurement talent is especially susceptible, as it’s hard not to be seduced by arguably the No. 1 supply chain company in the world, with a Gartner Supply Chain Masters honor to boot. Not only is Amazon’s footprint expanding relentlessly, the company is also scooping up many A players as it can acquire. And while industries like retail seem more in the path of Amazon’s human resources hurricane than others, realistically no one's talent is safe”.

HQ2 refers to the current situation in which Amazon is choosing which city should host their second giant HQ premises. Various US conurbations are throwing grants and other incentives at the firm to persuade it to locate in their city. But the point of the article is about people, wherever you’re based, and how to attract and retain good staff when giants like Amazon are sucking up hundreds of talented procurement and supply chain people.

The authors come up with three main areas of focus. The first is around providing a strong career path, and provides sensible advice for any organisation.

“The best way to combat these external pressures is to continually focus on keeping your team members engaged by recognizing their efforts and mapping out realistic career paths.  CPOs and leaders of sourcing departments should spend time with their teams and focus on the right roles for their employees and the results garnered. Provide them the recognition and stretch assignments they seek and you’ll increase the odds of them sticking around”.

The second point is one that we don’t perhaps always consider – “CPO branding”. The leader is an important factor in attracting talent, because potential employees “want to know his or her story. What has been the CPO’s track record and accomplishments? What about reputation as a leader? Or the ability to empower and provide opportunities?”  It is a good point and has the ring of truth to it. We’ve also seen cases where the reputation of an organisation as a good place to be in procurement has dropped rapidly when an inspirational leader moves on.

Finally, the article suggests that, just like Amazon, procurement functions should look harder at attracting top MBA talent. This is perhaps still more of a US rather than European thing, although we do increasingly see people with Masters degrees (but not always MBAs) coming into procurement or indeed existing professionals gaining those qualifications.

Apparently even Wal-Mart, not traditionally a top MBA recruiter, is now presenting a more “tech-focused front” to students and looking to attract more analytical graduates says the article. “Wal-Mart has also invested heavily in tools to spread this message on campus, including a touring RV equipped with TVs, iPads and an interactive map highlighting where in the US it’s hiring”.

Maybe Amazon isn’t quite the rival for talent here in the UK yet that it is in the US. But the four giant tech leaders (Amazon, Google, Apple, Facebook) are certainly huge magnets for talent, so everybody else needs to think hard and develop strategies to attract and retain the best possible procurement and supply chain people.  And you can read the whole US article here.

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