Many procurement teams around the world are being asked to take on a wider variety of activities than their traditional remit of just driving down the price they pay suppliers.
This can include various things like working out which risks would most likely bankrupt or seriously disrupt the operations of their key suppliers (and then working with those suppliers to make sure they’re managing that risk) or working with key suppliers to come up with new innovations that could cut cost and boost sales.
While all this sounds promising, it requires procurement staff to excel at a range of disciplines, and these professionals are in short supply. Often, procurement teams refer to staff that have these skills as being “strategic,” and CEB data show that there are a set of capabilities that define a strategic employee and that can be used to develop employees who aren’t performing well.
Finding the Skill Gaps
All of which means that hiring, developing, and retaining employees is a more important task for senior procurement managers than it’s ever been. And many procurement departments are introducing new processes and practices that help managers identify what skills they need on their team, and how to fill any gaps.
For example, the procurement team at one financial services company in CEB’s member network of procurement professionals asks its managers to use a competency needs map.
Managers first assess their employees on team competencies, such as adaptability or functional expertise. Then they select the four competencies they feel are most critical to team success. After that, managers calculate an average of workers’ scores across the competencies to come up with a team-wide score for each competency. They then plot these on the map (see chart 1).
Procurement managers also include the competency levels they need across their teams, represented by a dotted line. Then, managers can easily see where current performance doesn’t match up with expectations.
Chart 1: Team-level competency needs map Source: CEB analysis
Filling the Skill Gaps
Once managers have found the skill gaps, they are understandably eager to fill them. Tactics vary in how to do this: 21% of procurement managers find good candidates externally, 19% spread responsibilities across the team, 8% rotate staff until they find someone who performs well, and 8% change the role’s expectations to make it easier to fill.
The procurement at the financial services company developed a decision tool (see chart 2) to consistently determine what to do, from shifting employees’ work activities to hiring a high performer from an external source.
“Managers are much more specific, more granular about what they need to be successful and what’s helping them,” the company’s head of supply chain told CEB. “The way that managers talk is completely different now; it tells me that they are thinking in more detail, and there is benefit from that.”
Chart 2: Deployment decision tool Source: CEB analysis