According to the November 2021 HBR article Manage Your Talent Pipeline Like a Supply Chain, “We don’t have a good supply chain for talent.” As the result of increasing pressure on teams to do more with less and the added market complexity brought about by the pandemic, what does this “struggle” mean from a numbers standpoint?
In practical terms, it is projected that between 2018 and 2028, there will be 2.4 million “unfilled positions” with a “potential economic impact of $2.5 trillion.” A significant talent shortage of this magnitude will put considerable stress on modern global procurement practices when they are needed most.
While I will talk a little more about why we are in this position, in today’s post, my primary focus will be on the proposed solution in which procurement leadership’s increased involvement in the hiring process is critical.
Why 2.4 Million?
The challenges with acquiring and retaining talent in the procurement ranks that will result in 2.4 million unfilled positions are varied and complex. In other words, I do not want to oversimplify the situation with a few bullet points.
That said, employee “morale, productivity, and satisfaction” including creating the right environment for employees and providing them with the resources they need to succeed come to mind. I also believe that an organisation’s ability to attract the right talent requires a non-transactional hiring process that reflects the value or values of procurement’s leadership in these and other key areas.
Getting to Non-Transactional
When I started working in the recruitment industry in the early 1990s with many of the companies for whom I recruited, senior executive involvement at the beginning and throughout the end-to-end process was essential for a successful hire. By the way, a “successful hire” doesn’t occur when you give someone a job. A successful hire is being able to retain and assess the consistent and sustainable bottom-line impact a procurement professional has regarding the achievement of your objectives.
Numerous industry studies – including those by Deloitte are indicating that most CPOs do not believe that their current teams have the required talent to deliver their strategic objectives is telling. Keep this in your mind as you continue to read this article. I will also expand on this last point in my next article on why companies should take a “strategic sourcing approach” to recruiting talent.
The big difference between the 1990s and today is that many procurement leaders are no longer involved in the hiring process from its early stages due to recruiting technology. Instead, they only get involved with the short-listed candidates whose names are chosen through keyword matching and advanced algorithm selection. In short, it has become a purely transactional HR process based on the alignment of resumes with a written job description versus actual human knowledge of the person. Some have referred to this as a quantity versus quality approach.
Again, you only have to look at the above-mentioned industry studies and the fact that the average new hire is gone after 18-months to see the consequences of a lack of procurement executive involvement. After all, how do you build a solid team with an 18-month turnover?
Think Like A Start-Up CEO
Having dealt with many start-ups in the procurement space, many of the CEOs (or hiring executives) I worked with took an active role in the hiring process. They have a firm understanding of their growth strategy and which type of individuals will help them achieve these goals. They see the hiring process as part of strategic growth and ensure that they attract great talent.
Like a new venture, many factors contribute to building a successful procurement team. As previously mentioned, a sound strategy, robust processes, and great technology are crucial elements. But it ultimately falls on the hiring process to attract and retain the “right” professionals that will allow you to execute your strategy effectively.
So, let’s once again apply the same thought process as the CEO of a start-up and view recruitment as a strategic process and not a transactional one.