What comes to mind when you think of procurement? Is it a negative connotation? Historically, procurement was a department that measured success based on the hard-dollar savings. While procurement is still concerned with savings, the typical procurement department is now much more concerned with creating value throughout the entire organization.
For a procurement department to be successful, several initiatives must be undertaken. Executive leadership must align the internal stakeholders, and you must then market the department as attractive and value-generating. Now that you’re a master at the internal and external marketing of your procurement department, it is time to consider your efforts for retaining top talent.
Ideally, you will have potential employees emailing and calling you day and night for a chance to join your organization. You must ensure that prior to releasing any job postings, the positions are aligned with your organizational objectives. Furthermore, coordinate with HR (and other departments) on how to streamline hiring processes to ensure that only the most suitable candidates are considered.
When considering new hires, pay careful attention to your internal stakeholders, including the suppliers who already know and understand your business. However, be wary of culture when considering bringing someone onto the team. Your application and pre-interview processes should vet candidates appropriately, guaranteeing that you are receiving excellent candidates with great skills and excellent self-awareness.
Prior to the interview, the procurement executive(s) should work with the talent manager to ensure that they are evaluating potential hires based on their cultural fits in addition to their qualifications. In fact, according to RoundPegg, a culture and management platform that looks to quantify corporate culture, 89% of hiring failures can be attributed to a cultural mismatch.
Like in any business discipline, a familiarity with the process or a different experience comparable to that of procurement does not necessarily demonstrate qualification. It has been demonstrated repeatedly that top salespeople do not always become great managers, or that strong negotiators don’t always excel as supplier managers.
When it comes to attracting top talent, the hiring process is only the beginning. An important statistic to consider is that the cost to replace the average millennial is $24,000. Keep that dollar amount in mind when looking for employees. 65% of those new hires want personal development (UNC), 80% want on-the-spot recognition (UNC), 95% want work life balance (Urbanbound), and 43% aren’t concerned with finding a new job immediately after leaving or being terminated (UNC).
With some of these startling statistics in mind, it becomes even more critical to interview and hire only the best fits. Frequent turnover, negativity, or a cultural mismatch will hinder your procurement department, having a detrimental impact on your organization. Suppose you have navigated these waters and found a good match for your program. Congratulations! Aside from the typical onboarding process, consider including a comprehensive mentorship program that allows your high-potential hire to be a high performer.
Historically, chief procurement officers have cited mentors who helped shape their careers and instill the importance of strong execution. Working alongside competent and skilled teachers, mentors, and colleagues provides invaluable insight for new hires. A modern phenomenon in mentoring is referred to as reverse mentoring. The reverse refers to both mentors and mentees participating in the process of imparting knowledge. While industry knowledge and insight will come from an executive, a new hire may bring fresh perspective, or familiarity with new tools and software that they can teach the executive.
According to Wharton, mentorship programs are present in 71% of Fortune 500 firms, demonstrating their value. Furthermore, a case study completed at Sun Microsystems showed there were retention and monetary benefits associated with mentoring. Participants in the program were more likely to see their salary grade increase, and were 20% more likely to stay at Sun.
In addition to a mentorship program, consider the creation of a custom educational initiative. While formal trainings and certifications are beneficial, it will be more worthwhile to adapt certifications from, for example, The Institute for Supply Management. By custom tailoring programs, you can ensure that you are preparing your employees for senior positions while also advancing your organizational objectives. Clearly outline the skills required for employees to advance and succeed, and ensure that you are providing all the resources necessary to allow and encourage development.
A process that many of the most successful businesses implement is management rotation. Historically, procurement might not have been considered worthy of the most talented managers, but executives are rapidly rotating into procurement positions. Why? Well, for the same reasons that new employees should consider procurement as a career. It is multidisciplinary, allowing executives to develop commercial, operation, analytical and collaborative skills- all in the same department!
The rotation also assists with internal marketing efforts, instilling awareness of the value that procurement can provide. This is beneficial in creating relationships with other members of your business, and can position procurement as an exporter of talent. Furthermore, it bolsters the image of procurement as a destination department, where members of the business can test their skills in a dynamic department.
The primary concern any manager of a procurement department needs to ask is, Is procurement a rung on a ladder to something more, or is it a career destination? Initially, how do you market a program as such, but more importantly, how do you train and retain talent to advance the department and the overall organization? While no two programs will operate exactly the same, it is my hope that this article provides your executive team with a loose framework that can be adapted to fit your individual needs.
About the Author: Peter Portanova is a talent management enthusiast and Project Analyst for Source One Management Services. He is an expert at developing RFPs and executing strategic sourcing strategies for clients in a wide array of industries, specializing in navigating the complexities of the Marketing spend category.