Category Archives: Talent

What makes a Procurement Professional?

Even though it had a very academic bent, a good presentation at the Fourth Annual International Symposium on Supply Chain Management was Paul Larson’s presentation on “A Survey of Professionals on Topics, Tools, and Techniques for SCM”.

In this presentation, he overviewed a number of surveys carried out over the past few years that, as part of their design, attempted to determine what skills were required by a procurement professional. All of these surveys demonstrated that an effective procurement professional requires a broad cross section of skills to succeed. This indicates, at least to your author, that a procurement professional needs to be a very talented and skilled employee and that a good procurement team has the potential to be the superstars of your organization.

A study by Giunipero and Percy in 2000 identified the following skills:

  • Strategic
  • Process Management
  • Team
  • Decision Making
  • Behavioral
  • Negotiation
  • Quantitative

A study by Gammelgaard and Larson in 2001 identified:

  • Teamwork
  • Problem Solving
  • Supply Chain Awareness
  • Ability to see the BIG picture
  • Listening
  • Speaking
  • Prioritizing
  • Motivation
  • Cross-functional awareness
  • Leadership

And the recent study performed by the presenter identified the following top ten tools, topics, and techniques:

  • Communication
  • Negotiation
  • Teamwork
  • Computer (Analytics) Skills
  • Leadership
  • Contract Management
  • Price and Cost Analysis
  • Purchasing and Supply Management
  • Supplier Selection / Evaluation
  • Relationship Building

In other words, your average procurement professional needs the same breadth of skills required by a senior manager in any other department of your organization. Thus, it should be no surprise that a best-in-class procurement organization can make unparalleled contributions to your bottom line.

The Talent Series V.V: Breaking Update!

Two pieces of news to report to you today.

First of all, Jason Busch, The mighty Prophet of the spend management space of Spend Matters, has started his own mini-series on the issue. You can read “The Spend Management Talent Game (Part 1)”* through the link. I’ll summarize and post my thoughts when he finishes the series in a later post.

Also, Next Level Purchasing (acquired by Certitrek), which was recently recognized as the Innovative Business of the Year by the Pittsburgh Airport Area Chamber of Commerce (PAACC), is going to launch the first video installment of their “Purchasing & Supply Management Podcast Series” next Tuesday (October 17, 2006) on the importance of contract management. Be sure to take advantage of this free educational opportunity!

* All posts prior to 2012 were removed in the Spend Matters site refresh in June, 2023.

The Talent Series V: Driving Competitive Advantage thru an Effective Talent Supply Chain

Another great presentation at the Fourth Annual International Symposium on Supply Chain Management was Head2Head Purchasing’s talk on Driving Competitive Advantage thru an Effective Talent Supply Chain.

The presentation by Wayne Burgess & Paul Dodd, Managing Partners, pointed out that the human element makes talent procurement distinct and volatile. According to them:

  • Attraction is Critical
  • The best talent is most at risk of flight
  • Talent is extremely volatile & unpredictable
  • Ownership is complex; you need to consider
    • Physical Asset Nature
    • Knowledge and Skills Retention
    • Intellectual Property
    • Work Product
  • Appreciation in Value over Time
  • Expensive Maintenance
  • Expensive Disposal Costs

Furthermore, some markets are even tougher than others. Right now, the countries that are worst off are Mexico (78%), Canada (66%), and Japan (58%). In Canada, Calgary and Vancouver are the hardest hit (over 80% in some industries). Furthermore, each market has its own unique skill pressures.

One of the high points of the talk was where they pointed out that most companies with client acquisition issues had one or more of the following issues:

  • Poor attention to employment and job brand
  • Poor understanding of the best supply channels
  • Supply strategies are stagnant
  • Supply and Demand are rarely linked
  • Reactive recruitment is typical
  • Little attention to supply surety
  • Workforce competition is often an afterthought

Why was this a high-point? Knowing the issues allows you to identify mitigating factors. In particular, these issues identify the following key success factors in the attraction of talent:

  • marketing of employment and job brand
  • supply channel knowledge
  • effective talent sourcing strategy
  • integration with demand generation
  • effective resource planning
  • relationships
  • market and internal data management

Furthermore, attraction, through marketing and PR campaigns, is often the differentiator. Good PR campaigns that create the buzz … continuously … across multiple supply channels.

Everyone knows that some channels work better than others, but one thing that surprised me was how much better some channels were than others. The presentation highlighted the following statistics that serve to indicate just how effective your marketing dollars can be expected to be:

Channel Avg Success Rate
Referrals 50.0%
Career Site 13.3%
Agencies 11.4%
HR Database 10%
Campus Recruitment / Events 9.8%
Advertisements 5.5%

In other words, your most effective channels are often your lowest cost channels. When you consider the cost of an agency, a job fair, or an advertisement, an employee referral program, even at 5K a head, is cheap in comparison. And when you consider the national, and sometimes international, visibility of a career site, their four figure fees pale in comparison to the number of applications you can receive if your ads are appropriately placed.

The Talent Series IV: The Talent War

This series seems to get more relevant by the day. On Thursday, the European Leaders Network published “The War for Procurement Talent” where they noted that you need the right environment to attract and retain the highest calibre procurement talent. After all, talented people tend to make above average contributions to any organisation; every good business has talented and motivated people at its heart.

According to the article, the best way to attract talented individuals is to ensure that the purchasing challenge presented to the candidates is BIG and NEW. Great talent is drawn to the opportunity to work on big things and to apply new thinking. Furthermore, it states that the best way to keep them is to ensure your business has the capacity to change. Talented people need to be successful, and change creates the opportunities that talented people can exploit in pursuit of success.

However, as the article points out, not every category is big or wrought with the opportunity to change the business. So how do you attract talent to these categories? One possibility is to hire recent graduates. A recent article in Canadian Business (Sep 11 – 24, 2006 print edition) by the title of “Hire Education” offers some good advice in this area.

The article, which discussed the results of a survey of 30,000 students from 143 post-secondary institutions across Canada, jointly conducted by Toronto based Brainstorm and D-Code to guide recruiters on what the new crop of employees want found that the number one attribute young people value most when considering employment is opportunity for advancement. Since they will be starting at the bottom of the pyramid, if you have a decent size organization, you can offer them lots of opportunity for advancement – or at least change – by rotating them through different categories to broaden their skills and bring a fresh view. In addition, the number two and three attributes were good people to work with and good people to report to. So build a good team, and talent will be attracted to you.

As you have probably guessed from my recent posts, I more or less agree with these statements. Opportunity attracts, while the capacity for change and advancement retains, but, as I’m quick to point out, only if the compensation is fair and balanced. Otherwise, they’ll probably be attracted to the bigger carrot on the shinier stick held out by your competitor.

The Talent Series III: Finding, Training, and Retaining

This week was another good week. To start off, Charles Dominick of the Purchasing Certification Blog (now the NLPA blog) started us off with a post on “Talent Management” that offered some suggestions for a mid-sized company to retain talent. In summary:

  • hire the “right” person, not necessarily the “best” person,
  • have a career development plan from junior buyer to VP of, Purchasing
  • don’t change the plan “on a whim”, and
  • reward employees for educational achievements.

Dave of Buyer Analytics chimed in with a great post on “Practical Talent Management for Procurement”. Dave shared with us five best practices for finding, retaining, and nurturing procurement talent. Briefly, these were:

  • Take advantage of the “Feeder Pool” of College Graduates available to you,
  • pair recent graduates with purchasing managers in direct materials,
  • rotate new buyers to indirect materials,
  • rotate the now more-experienced buyers back to direct materials, and
  • at the right time, put them on the management track.

Dave of Procurement Central [WayBackMachine] followed up on his teaser “Thought of the Day” with an insightful post on “Performance Based Pay – Thoughts from a Silicon Valley guy”.

He really hit the nail on the head with the following:

Dave Stephens (annoying young engineer): “Doug, why isn’t going above and beyond rewarded more here?”

Doug White (CEO): “Dave, this is a company of engineers. Engineers value stability above all things. We don’t differentiate much on performance – that would make things unstable. We like it that way and we’re not changing things.” (but more polite and CEO-like)

I knew right then I was working for the wrong company.

Your best people work hard, perform well, and expect to be rewarded. The best answer we have right now is performance based compensation. Now, Dave is right in that measuring performance can be extremely tricky, but if you do it regularly, include objective and subjective ratings from an individual and corporate performance, do your best to approach fairness & correct mistakes as you make them over time, then not only will you get better, but your people will see the effort your making, realize you value their contribution, and, odds are, stick around for the long haul. I agree with Dave, “by being honest & upfront and not getting overly specific, management can ensure performance based pay, just like procurement, is good medicine for your business.

Finally, even though it is not part of the talent series, I’d like to mention a post on Joe’s Corner Blog. In “When Small is Big”, Joe gives us some great advice that can be applied to the talent gap. Think of the principle of small is big, or less is more, and success will follow. In other words, if you find the right people, you may not need as large a buying group as you think you do to succeed (especially if you empower them with the right tools and incentivize them to stick around!).