Are talent deficits threatening to slow the progress of digitisation in procurement?
James Tucker procurement report, report on procurement, new-trends...
Many businesses are looking to speed up the digitalisation of procurement to help improve business operations and satisfy customer expectations. CPOs must ensure their teams have the right skills to use new technologies effectively, though identifying and acquiring the digital skills their organisation needs is no easy task.
For many, talent deficits threaten to slow progress as 86% of businesses claim to have faced barriers when developing the digital skills they need to unlock the true value of the procurement function. To effectively deploy and reimagine new business models, procurement leaders must build talent strategies that focus on bridging skills gaps in their teams when demand for digitally savvy candidates outpaces supply.
Why is procurement experiencing a digital talent shortage?
The role of procurement has shifted as technology and interconnectivity have come to the fore. Businesses have had to adapt to new ways of creating and delivering value and procurement has superseded its role as a simple cost-cutting function. Instead, procurement leaders now have a seat in the boardroom and more influence over business decisions.
This seismic shift in the role procurement plays in a business, along with advances in new technology, has led to significant skills gaps amongst teams. Other factors that are contributing to the talent deficit include:
- Access to larger amounts of data
Procurement teams need fast and reliable access to data to make better decisions. Focusing less on simple transactional efficiencies as a way of reducing costs, the modern CPO has more responsibility and influence over the wider business strategy by having more visibility into purchasing behaviours across the entire organisation. This requires a new set of digital capabilities that span beyond the traditional procurement function and deep into other areas of the business.
- An aging workforce
An estimated 25%-33% of the procurement workforce is at or beyond retirement age. As these employee’s retire their positions will need to be backfilled, though this alone will not be enough to replace the skills and experience lost. More needs to be done to encourage mid-to-senior level employees from other fields to switch to procurement. Demonstrating a clear career path and that procurement offers opportunities for employees of all ages to use and develop critical digital procurement skills could lessen the impact.
- A candidate-led market for digital skills
Digital skills are in high demand across the entire economy. Candidates are in a strong position when deciding which employers to work for. Procurement is often seen as an unglamorous, back-end function. However, this is no longer the case! Procurement leaders have a seat at the table and technology is propelling procurement forwards, making it a fast-paced and exciting function full of innovation. Changing perceptions may help attract top talent.
4 ways CPOs can bridge the digital skills gap
Due to the candidate-led market and the skills shortage, many CPO’s may find a mix of permanent hiring, using contract or interim staff, as well as vigorous upskilling will enable them to address gaps in their teams most effectively.
With a renewed focus on employer branding and an increased investment in talent development, CPOs should consider the following four methods when redefining their digital talent strategies to help attract and retain top-tier procurement talent:
1. Produce a skills gap analysis
13% of procurement leaders lack the understanding of the skills their teams require going forward. Before you can begin to address the digital skills gaps in your teams, first you need to understand the skills you currently have in-house and what knowledge gaps you need to plug to better exploit the technological advances in procurement. Businesses are increasingly utilising the following digital technologies as part of their procurement function:
- Cloud computing
- Data analytics
- Machine learning and AI
After conducting a skills analysis, procurement leaders should ensure they have these specific skillsets within the business via internal training or hiring new employees, if they wish to future-proof their teams in a digital age.
2. Strengthen your procurement employer brand
More needs to be done to encourage people into the procurement industry at the start of their careers. By strengthening your procurement brand, you can inspire new hires and highlight the advantages of a procurement career. Focus on showing a clear, convincing procurement mission and emphasise the digital transformation of the industry. By defining procurement as a modern, sustainable function you will make the profession more appealing.
3. Increase investment in talent development
To develop the right digital skills in-house procurement departments need to invest in the tools necessary for upskilling. Implementing SMART learning and development goals, access to online learning platforms, developing mentoring schemes, and investing in training programs are all effective ways to develop procurement talent.
Establishing clear employee development pathways has the added benefit of improving talent acquisition and retention. Showing that procurement careers have a definite structure of training, development, and advancement encourages new talent into the department.
4. Promote cross-department functionality
Partnering with other departments across your business through programs such as job rotation schemes is a great way for your team to develop soft skills such as negotiation, communication, leadership, and stakeholder management.
Building closer relationships with key stakeholders can deepen business insights and allow procurement teams to make better decisions and respond more effectively to wider business needs. Better cross-department connection will also help the wider business understand the importance of procurement function.
Does your procurement team have the digital skills to excel?
If your procurement department lacks the digital skills to exploit technology effectively, 1st Executive can help you build a recruitment strategy for the future, now. Our large network gives you access to the best talent available on the market, enabling you to source the right individuals with the right skills for your business.
Add value to your recruitment strategy by contacting us today.