All posts by Elaine Porteous

Understanding The Shape And Cut Of Procurement Organisations

Elaine Porteous clears up some common misconceptions about the ways  procurement  organisations can be structured, and demystifies some of the jargon…

Sergiy Bykhunenko/ Shutterstock

 Starting a new job can be both stressful and exhilarating. The people are different, the location is strange and the way they work is peculiar to that enterprise. There may be a seven-level procurement organisation chart or a loose, undocumented reporting structure to be navigated.  What is also daunting is the “in-speak”, the specific terminology which may be like a foreign language to you.

Let’s clear up some misconceptions about ways that procurement can be organised, and try and demystify some of the jargon.

An operating model is just the way the procurement function is set up to work.  Most companies start up being decentralised, unstructured and even disorganised until the workload grows.  As the functions expand and mature, there needs to be some form of formalising and centralising of the activities to consolidate the spend. Only then can we expect to make savings and reduce our risk exposure.

Centralised or centre-led?

Centralised procurement does have its benefits. It means more control over suppliers and contracts and it helps drive supplier diversity and corporate social responsibility (CSR) initiatives.  The risk is mitigated and skills development is made easier, expanding capabilities.  However, it can become a very bureaucratic and expensive cost centre. Too much data and not enough information can cause loss of focus and poor service to stakeholders.  People at the centre do not always understand regional and local supply markets and consumption patterns.  If “central” means the US and the region is Papua New Guinea, there may be cultural challenges too.   As procurement organizations move on and mature, over time, many of them become centre-led, taking some time to decentralise personnel and day-to-day operations.

Figure 1: The procurement journey

Image:  www.zycus.com

Wherever your organisation is on this curve, it is helpful to know what it means to be where.  There is no one best structure. The way your organisation works is influenced by the external supply market, the end-users needs and the overall company strategy. You just have to ride the wave.

Centre-led procurement organisations concentrate on defining strategy and policy for both their direct and indirect procurement.  Corporate spend can be fully leveraged on strategic commodities and services which are well-suited for centralized sourcing.  Non-strategic categories not suited to centralized sourcing can be handled by the individual business units or regions.

Centre-led procurement uses a category management structure which supports the rollout of sourcing and contracting plans to business unit and regional level.  The type of set-up is often called a hybrid model.

Category management means the bundling of third-party spend into buckets to extract more value.  The main aim behind category management is to aggregate the internal demand and achieve economies of scale by contracting the best suppliers at the lowest price.  In its best form, it involves an active category manager to roll out category plans, strategic sourcing and supplier management initiatives.

In a centre-led organisation, a global category manager would set the strategy for the category group, e.g. transport logistics, and for the sub-categories (also sometimes called commodities) within that group:  road, rail and air transport, freight forwarding, port activities and courier services.  At regional or divisional level, the category plans are followed and executed locally to achieve the best results for the organization.  This is the ideal but it is rarely implemented in full. Some categories are really challenging. Marketing services, technology and professional fees come to mind.

Cross-functional teams (CFTs)

To be effective, a category needs to be managed using one or more cross-functional teams.  A cross-functional team comprises representatives of key divisions and business units that work together, with procurement, to achieve the best results for the organization in that category or commodity. Although extensively used in strategic sourcing, CFTs are being used increasingly and successfully across process improvement, product development, quality assurance and the assessment of suppliers.    

The benefits are well-documented:  a more robust outcome, transfer of skills and learnings, improved internal cooperation and sustainable relationships.

Global organisations that run virtual CFTs have special challenges.  With the application of innovative methods and up-to-date online technology, it is now easier and more effective.

Whatever the operating model or the make-up of the CFT, the satisfaction of stakeholders and end users is paramount.  A stakeholder is anyone that has a vested interest in the outcome of your project or action.  He or she could be any one of these:

  • An internal departmental executives, manager or end-user
  • Another procurement team member
  • A co-opted subject matter expert
  • A supplier or a subcontractor
  • A member of the media or a regulatory body

Stakeholders are capable of influencing the success or failure of a project.

The model is not cast in stone

As a procurement organisation matures, it is likely that executives will revise and adjust a hybrid or centre-led structure so that it stays aligned to corporate objectives and continues to deliver value.  The best model is always the one that delivers results through open lines of two-way communication and uses processes that are flexible enough to take into account regional and cultural differences.

Where Are All The Great Procurement Jobs? Broaden Your Vision

Looking for a new procurement job? The good news is that there are a whole load available that are yours for the taking… you just need to broaden your vision!

Do you have your eye on an exciting opportunity in international category management, predictive data analytics, or do you have a passion to make sourcing more sustainable?  The good news is that new job roles like these are emerging in procurement and they are waiting for you.  Conventional manual processes are disappearing as we automate routine tasks, even contract management is deemed at risk: artificial intelligence and algorithms are already being used to draw up “smart” contracts.

Where are all the great jobs?

Corporate companies

Traditionally the most desirable careers were to be found in the big multinationals that have mature procurement organizations; this still holds quite true.  Some of the companies in the fast-moving-consumer-goods (FMCG) sector are leading the way in strategic procurement.  Unilever, P&G, Amazon and Coca-Cola are listed in Gartner’s Top 25 companies in supply chain.  Any one of these companies may be a good place to get a foot in the door and gain solid early experience.

Procurement solutions providers and consultancies

With the development of software solutions for procurement functions such as strategic sourcing, contracting and supplier management, many companies are outsourcing some functions to technically proficient service providers.  These problem solvers service a range of industries, locations and functions. Spend Matters publishes a list of the top 50 solutions providers To Know and another top 50 to Watch.   This list includes some consulting firms, both big and small.  Phil Ideson of the Art of Procurement says that this type of experience can be valuable if you want to go back into a corporate leadership role.  He says “I am a believer that procurement is a service provider to our stakeholders and not a function. Being with a solutions provider really helps you experience the need for customer centricity.”

Not-for-profit and Public Procurement 

Public sector procurement is a real job option.  Don’t disregard the experience that you can get from working on big-ticket items and major projects that positively affect your region or your city. It may not seem as cool as working for Apple Inc. but it may be more rewarding.  There is some perception that working for a non-profit organization means a drop in pay, not so.  Love to travel?  Opportunities to work abroad abound in the many divisions of the United Nations, the World Bank and the Red Cross, at market-related salaries.

Should you get certified or get a degree?

Unlike in finance and legal, there isn’t a license to practice in procurement. However, most employers prefer candidates with a least a bachelor’s degree in business or a professional certification in supply chain or procurement. Which one depends on whether your targeted employer has a preference for certification over a formal degree and what your desired end-game is.

1. Getting certified

Many of my colleagues without a professional certification have never felt that that impeded their career growth or work opportunities.  However, in the early stages of a career, it may be useful especially in locations where professional certifications are held in high esteem. CIPS, CAPM, IACCM and ISM are examples of certifications and affiliations that you could follow. In the UK and in Australia the push for certification and affiliation is stronger than in some other parts of the world.

2. Educational qualifications

Formal degrees in procurement are actually quite rare but there are lots of possibilities in supply chain management (SCM), of which procurement is a key element.  Leading employers source their talent from the best-ranked colleges internationally that offer supply chain advanced education and from the top UK universities with registered supply chain degrees.  If you are thinking it is too late to start, it really isn’t.  Many of these degrees are available online. Always take advantage of an offer of financial or other educational assistance from your employer.

Sometimes it’s all about the piece of paper, sometimes it’s about the affiliation.

“If I knew then what I know now”

I asked some mature and experienced colleagues what they would tell their 21-year old self and this is what they said:

  1. Be curious

Soak up everything. Read widely to stay on top of new trends, changes in regulations and advances in technology.   Don’t always accept commonly held positions, beliefs or strategies as absolute truths.  Question what you see and what you hear. You can look at everything with a fresh pair of eyes.

  1. Get wide exposure

Take advantage of any job rotation that you are offered,  opportunities to get exposure to many industries and many categories don’t come along every day.  Be open to change and chances to diversify your skills. Transitioning between functions helps you build your knowledge and helps you to better understand your stakeholders.

  1. Find a mentor

It may be useful to get guidance from someone who has been through a similar experience.  A well-chosen mentor provides advice and helps navigate you through the trials and tribulations of your career.  Gordon Donovan (FCIPS), of Epworth Healthcare, says a mentor can come from anywhere, even another industry.

  1. Ask for feedback (and act on it!)

Actively seek feedback on the things that you do well and things that need improvement. Sometimes it’s hard to take criticism but it can help develop both your technical and behavioural skills.

  1. Network

Networking does not come naturally to everyone but it is worth developing some skills in this area.  Meeting new people is so important because you never know when it’ll be someone who can help you to open doors or change your direction. Tanya Seary is a champion of networking, you can follow her example here. 

6. Job descriptions are not cast in stone

Many advertised jobs that you come across may be cut-and-pasted from descriptions used in previous recruitment activities.  Too many times employers and recruiters look for what they looked for last time, not what they need now.  If you think you would fit their needs, go for it, there’s nothing lost.

What the under 30’s say

Most under 30’s surveyed agreed with the boomers talking to their 21-year-old selves.  They suggested working hard to keep learning and gaining new qualifications and ask lots of questions.  As Christina Gill, one of the “30 under 30” stars with over a decade of experience in supply chain, said, “This is an exciting time in your career. Be open, be adventurous, be a sponge, listen, learn, and take risks in your career.”

A final thought: organisations that focus on supplier collaboration, unlocking innovation and making the best use of their precious data make attractive employers.

Procurement Operating Models Explained

Centralised? Centre-led? What’s the difference, and how do I know which operating model is best for my organisation?

Starting a new job can be both stressful and exhilarating. The people are different, the location is strange and the way they work is peculiar to that enterprise. There may be a seven-level procurement organisation chart or a loose, undocumented reporting structure to be navigated.  What is also daunting is the “in-speak”, the specific terminology which may be like a foreign language to you.   Let’s clear up some misconceptions about ways that procurement can be organised, and try and demystify some of the jargon.

 An operating model is just the way the procurement function is set up to work.  Most companies start up being decentralised, unstructured and even disorganised until the workload grows.  As the functions expand and mature, there needs to be some form of formalising and centralising of the activities to consolidate the spend. Only then can we expect to make savings and reduce our risk exposure.

Centralised or centre-led?

Centralised procurement does have its benefits. It means more control over suppliers and contracts and it helps drive supplier diversity and corporate social responsibility (CSR) initiatives.  The risk is mitigated and skills development is made easier, expanding capabilities.  However, it can become a very bureaucratic and expensive cost centre. Too much data and not enough information can cause loss of focus and poor service to stakeholders.  People at the centre do not always understand regional and local supply markets and consumption patterns.  If “central” means the US and the region is Papua New Guinea, there may be cultural challenges too. As procurement organisations move on and mature, over time, many of them become centre-led, taking some time to decentralise personnel and day-to-day operations.

Image: www.zycus.com

Wherever your organisation is on this curve, it is helpful to know what it means to be where.  There is no one best structure. The way your organisation works is influenced by the external supply market, the end-users needs and the overall company strategy. You just have to ride the wave.

 Centre-led procurement organisations concentrate on defining strategy and policy for both their direct and indirect procurement.  Corporate spend can be fully leveraged on strategic commodities and services which are well-suited for centralised sourcing.  Non-strategic categories not suited to centralised sourcing can be handled by the individual business units or regions.

Centre-led procurement uses a category management structure which supports the rollout of sourcing and contracting plans to business unit and regional level.  The type of set-up is often called a hybrid model.

Category management means the bundling of third-party spend into buckets to extract more value.  The main aim behind category management is to aggregate the internal demand and achieve economies of scale by contracting the best suppliers at the lowest price.  In its best form, it involves an active category manager to roll out category plans, strategic sourcing and supplier management initiatives.

In a centre-led organisation, a global category manager would set the strategy for the category group, e.g. transport logistics, and for the sub-categories (also sometimes called commodities) within that group:  road, rail and air transport, freight forwarding, port activities and courier services.  At regional or divisional level, the category plans are followed and executed locally to achieve the best results for the organisation.  This is the ideal but it is rarely implemented in full. Some categories are really challenging. Marketing services, technology and professional fees come to mind.

Cross-functional teams (CFTs)

To be effective, a category needs to be managed using one or more cross-functional teams.  A cross-functional team comprises representatives of key divisions and business units that work together, with procurement, to achieve the best results for the organisation in that category or commodity. Although extensively used in strategic sourcing, CFTs are being used increasingly and successfully across process improvement, product development, quality assurance and the assessment of suppliers.

The benefits are well-documented:  a more robust outcome, transfer of skills and learnings, improved internal cooperation and sustainable relationships.

Global organisations that run virtual CFTs have special challenges.  With the application of innovative methods and up-to-date online technology, it is now easier and more effective.

Whatever the operating model or the make-up of the CFT, the satisfaction of stakeholders and end users is paramount.  A stakeholder is anyone that has a vested interest in the outcome of your project or action.  He or she could be any one of these:

  • An internal departmental executives, manager or end-user
  • Another procurement team member
  • A co-opted subject matter expert
  • A supplier or a subcontractor
  • A member of the media or a regulatory body

Stakeholders are capable of influencing the success or failure of a project.

 The model is not cast in stone

As a procurement organisation matures, it is likely that executives will revise and adjust a hybrid or centre-led structure so that it stays aligned to corporate objectives and continues to deliver value.  The best model is always the one that delivers results through open lines of two-way communication and uses processes that are flexible enough to take into account regional and cultural differences.

Is Marketing A Procurement Blind Spot?

If your marketing expertise is a little below par, don’t despair! Marketers need your help and luckily there’s a lot procurement can do…

How much do you know about ATL, BTL and TTL? Learning marketing speak is the first step in gaining support of your colleagues over the fence and establishing your credibility.

The marketing services category has always been complex one and a bit of a blind spot for procurement. The learning curve is not only steep, it’s also a moving target. We have to invest considerable time in understanding their issues and concerns before we can provide any meaningful assistance. Category managers need to continuously build and refresh internal relationships at all levels; this requires perseverance, patience and stamina. Procurement veterans are fully aware of stakeholder expectations and the importance of having rock-solid relationships with marketing professionals before launching any sourcing projects.

Problems in sourcing marketing services

  • The decision makers may have entrenched relationships with advertising agencies and media houses, with or without formal contracts
  • There are often too many suppliers for the same or similar services and purchasing outside contracts is commonplace.
  • There may be little focus on achieving value for money or measuring effectiveness of the use of their limited budget.
  • Negotiation skills may be in short supply
  • Pricing models are less than transparent. Traditional agencies have pricing structures that would test the analytical skills of the best procurement professional.   

Some good news

On the upside, there is increased pressure on marketing departments to do more with less budget and they need procurement’s help, especially getting better value for money and formalising supply arrangements.

CMOs are becoming increasingly aware of the need to competitively source suppliers periodically, even if their main objective is to generate new and innovative ideas, rather than make cost savings.

Advertising agencies in their traditional form are disappearing; integrated marketing agencies are offering full-service solutions for all marketing requirements including strategy, brand management, advertising, media buying and the full range of digital and social media services. This is a real opportunity for procurement.

Where procurement can add value

Procurement is advised to pick its battles carefully, working from a firm factual base. The basic principles of spend analysis apply: collect and analyse all the data and know the landscape before tackling your target areas

Benchmarking

  • Develop a skills benchmark for each type of service. Establish what sets of skills are needed and determine fair rates for each
  • Apply supply market intelligence to determine the financial competitiveness of existing suppliers. Evaluate their rate cards and pricing against the market. Are they competitive?

Review existing supplier relationships

  • Identify incentives to improve relationships with incumbent marketing suppliers, and consolidate the supply base
  • Negotiate and improve unsuitable contractual terms and conditions, adjust pricing models and rates in line with benchmarks

Pricing of services

Many agencies use the tried-and-tested approach of consultants: billing is based on time-plus-expenses also erroneously called cost-plus. This is an open-ended billing system based on rate cards that apply hourly or daily rates per each skill level. Problems occur when lower skills are applied to the job while higher rates are billed. Where the scope of work is unclear or subject to change it can work but a cap should be set with only a small percentage  overrun of the budget allowed. Beware scope creep.

It is crucial to gain an understanding of other fees and mark-ups such as media commissions, margins on production costs and printing costs.   Where do rebates end up?

Measuring supplier performance

Managing supplier relationships with marketing firms needs to be focused on minimising bad behaviours and rewarding and incentivising those who deliver as per pre-defined requirements. Marketing departments may not necessarily have targets for upholding quality, reducing costs and measuring process improvements, procurement teams certainly do.

5 Top tips for getting along with marketing

  1. Understand important marketing concepts and terminology and recognize how marketing decisions support the company’s objectives.
  2. Invest time in building relationships and understanding the day-to-day challenges. Category managers should reassure marketing teams that they understand the value of strong relationships with creative agencies.
  3. Pick your battles. Identify areas that procurement can really influence
  4. Know your stuff – drill down into the data and understand the detail so that you can discuss issues intelligently
  5. Procurement should share stories of how they helped other functions in the business in ways that Marketing can relate to. Find ways to translate sourcing ideas into their language.

The ability to tactfully handle supplier/marketing/procurement relationships is the key to success. There are no secret tricks, just applying sourcing and contracting best practices will pay off provided that you prioritise service and performance standards over cost savings.

Do you want to be embraced warmly by marketing?   Know your numbers, respect their skills and ideas and work together to develop solutions that will work for both functions. Many marketing functions trundle along with little or no support from procurement.

Whose fault is that?

Best of The Blog- Should You Ever Rehire An Ex-Employee?

When you rehire an ex-employee, especially one that was a star, it looks like you are getting a great deal. What you see is what you get. They understand your business and its own unique culture, are immediately productive and bring industry knowledge and new ideas.

pathdoc/Shutterstock.com

Everyone loves a good throwback article, which is why we’re hopping in our time machine to bring you back some of the biggest and best Procurious blogs. If you missed any of the golden oldies, look no further!

This week, we’re revisiting an article by Elaine Porteous who explains why organisations must be very cautious when considering whether to rehire employees. 

The best-case scenario is when an employee wants to return because he has had time to learn new skills and has gained in-depth work experience somewhere else that he can share with you.

The good news about rehiring top performers

Rehiring former employees often costs much less than hiring from scratch, especially since you can cut out the extremely costly recruiting and interview process. When budgets are tight, you can explore this avenue using social media, alumni groups and word-of-mouth to find out who is actively looking.

The potential rehires, also known as boomerangs, are easier to assimilate into the organization and you will save you orientation time. The thinking is that since they know exactly what they’ll be signing up for, they will be likely to stay longer the second time and therefore be less risky, more productive and better for your retention statistics.

There’s also some thought that a rehired person can provide you with a fresh perspective, innovative ideas and some industry intelligence.

So what can go wrong? Quite a lot

Not all former employees are worthy of rehiring. Let’s hope they left for the right reasons and of their own accord. Obviously, you will exclude anyone who was fired, incompetent or unproductive or suddenly has accumulated a criminal record.

Here are a few of the main disadvantages of rehiring former employees:

  •  Current managers and co-workers may feel threatened if the employee returns with a new set of skills, and especially irritated if they come back onboard with a higher remuneration package, which is quite likely. They may feel an employee already had their chance.
  •  The reason that they left in the first place may still be a problem: the boss from hell, lack of benefits, poor promotion prospects and/or lack of opportunities to learn.
  •  There may be unintended consequences if the rehire is appointed at a higher level than his previous role. It may trigger other departures if promotional prospects are blocked, i.e. waiting to fill “dead man’s shoes.”
  •  Returning employees may just not fit in. The climate and culture of the company may no longer be the same. In this case, their new presence may be disruptive and cause tension.

Develop a rehiring policy

A definite success factor is having a firm policy that is applied fairly to all potential “Comeback Kids.” Who is eligible to be rehired should be agreed upon internally and be legally defensible.  Two important elements to include are how long after leaving an employee can return, and  what’s a reasonable maximum time to be away.

In some industries, some employers also refuse to rehire an employee who left to go to a competitor. Other organizations may welcome the broader experience and give preference

to ambitious ex-employees who went off to try their hand at consulting or starting their own business.

Booz Allen Hamilton, a leading U.S. consultancy, is such a staunch believer in rehiring that it sponsors a Comeback Kids program, through which it actively reaches out to past employees and those from the military.

A few more things to consider when rehiring

  • Make sure the conditions that caused that person to leave are not still barriers. Exit interviews are notoriously unreliable. so it’s best to work out why the employee really left. If he undervalued the company before, has anything changed?
  • Is this person really the best candidate for the job? It should not be a quick fix — don’t take the lazy recruiter’s solution.
  • Are you overlooking quality internal candidates? Someone else internally might be just as qualified to do the job. Think about the message you’re sending and the possible repercussions of rehiring instead.

Don’t forget to brief the new employee on how things have changed since he left and any new projects that have come up since.  A “welcome back” interview shows that your company is open to hiring the best people, whatever their job history.

Would you rehire a great former employee? Let us know by commenting on the story below.

Raising Procurement’s Image – One Person At A Time

Who’s willing to stand up to bear the flag of procurement pride and improve our image? Elaine Porteous wants reinforcements to help raise the function’s status up to where it belongs.

We’re still hearing comments like “we only involve procurement because it’s the policy” and “procurement slows down the sourcing process”.

There are some lonely but passionate practitioners out there waving the flag and highlighting pockets of excellence, but we need reinforcements.

The image problem

Procurement has traditionally been poor at championing its successes and promoting a positive image of its contribution. Perception is reality. There’s no shortage of published articles and news about fraud, corruption and litigation involving purchasing people and their organisations. So where is the good news? Maybe we could all benefit from a lesson in public relations; in reality, procurement is not so different from sales.

Five ways you can raise the status of procurement yourself

  1. Develop better listening skills

The only way to understand what internal stakeholders, suppliers and customers currently expect from procurement is to listen well. Too often, procurement teams complete projects in a poorly-informed vacuum, failing to get solid input from key stakeholders. By asking for stakeholder feedback on sourcing plans we can reach agreement on success factors and manage their expectations. We have two ears and one mouth for a reason. Hear what your customers need and work with them to deliver it.

  1. Focus on encouraging innovation

We engage with suppliers every day, so what are we doing to get them to offer ideas that add value rather than asking them to just cut costs? Many suppliers complain about their improvement ideas getting lost somewhere in your organisation, let’s make sure that it is not procurement that is the black hole.

  1. Take the lead on sustainability initiatives

For most companies, taking a ‘green decision’ often means increased costs. It could also mean a compromise in quality or a slower speed to market, but it doesn’t have to be so. Eliminating waste, finding alternative energy solutions, managing the cost of utilities and reducing packaging are all sustainability goals. It will immediately enhance your position if you can apply best practice in sourcing to your company’s sustainability strategy. If there is no strategy yet, there’s your opportunity to contribute.

  1. Talk in the language of the listener

We are guilty of talking in our own shorthand using expressions like strat sourcing, catman, SRM and RFX, which only serve to irritate. Internal customers appreciate receiving communications in terminology they understand. In some high-tech and specialist categories, stakeholders, also known as customers, will suspect that you may not have the depth or breadth of knowledge required. Talk their language to let them know that you are fully up to date on trends and immersed in their technical detail. This way you can prove that you are worthy of dispensing advice and providing guidance.

  1. Highlighting our successes

Easier access to information is changing the way we work; we can see what other people are doing and they can see what we are doing. Not many procurement teams use a well-thought-out internal media strategy to highlight their achievements. Communicating and celebrating individual and team wins are all important steps to ensuring that your internal customers stay on-side. Tracking of cost savings and reporting the results in a digestible way can show the positive impact that procurement has made to business success.

Could we learn something from the Human Resources (HR) function? Applying the tried-and-tested HR business partner model could work well in tricky situations and traditionally out-of-bounds functions. One person is directly allocated to be the enabler between the customer and, in this case procurement, with the main aim of removing process obstacles and smoothing the way for others.

Hiring And Retention In The Digital Workplace

Hiring top talent in the age of the digital workplace is going to be a little different. How can procurement prepare for workplace 4.0?

Hemin Xylan/Shutterstock.com

Join The Big Ideas Summit 2017 group to access all of last week’s discussions and exclusive video content.

Workplace 4.0, or the new digital workplace, is not all about data-driven processes, smart devices and the internet of things; it’s about hiring and retaining talented employees to extract the best results from the implementation of new and advanced technologies.

Simple, repetitive work in both manufacturing and administrative industries can be automated, but we will always need human brains for hire.

The Digital Opportunity

Companies are changing what they buy. We need new suppliers from different markets; end users are putting revised requirements on the table all the time. It’s a bonus for procurement to be able to participate directly in the sourcing process and show where they can add value in this field.

For example, the traditional I.T. category has expanded to include telecommunications and packaged systems solutions and has become a high value category with multiple and complex commodities. Software, communication devices and electronic components which require a greater level of skill to manage will be sourced more frequently.

Job descriptions need to be re-written and a different approach is needed to hire and retain these skilled employees. People are increasingly being hired for fixed-term contracts and project work in these types of procurement roles rather than being offered full-time permanent jobs. Much of the work is not location-specific and does not require adherence to strict office hours. To understand how to manage these workers, we have to know what drives them at work.

What Do 4.0 Workers Want?

The job seeker wants to work for an organisation that, in no particular order:

  • Provides opportunities for ongoing learning, growth and creative challenge
  • Has an equitable reward system that recognises success
  • Allows time and location flexibility in working practices
  • Employs far-sighted leaders that support collaboration and innovation
  • Supports a team-oriented work culture based on open communication and feedback
  • Has a pro-active approach to ethics and transparency
  • Promotes sustainability and recognises the “triple bottom line” — financial, social and environmental measures of success
  • Knows how to have fun (within limits)

Attracting and Retaining a Mobile Workforce

Are employers ready to provide everything on the wish list? According to  a recent Deloitte study, today’s millennials place less value on visible, well-networked and technically-skilled leaders. Instead, they define true leaders as strategic thinkers, inspirational, personable and visionary.

Organisations that want to keep pace will not only have to upgrade technically, but work on their organisational structures, flatten hierarchies and adjust their corporate culture, even soften some maybe outdated workplace rules.

The key to success in retaining talented employees is for organisations to have the structure and policies that support the new flexible working conditions. Human Resources managers are still scratching their heads about how to devise suitable reward systems, manage worker performance and provide training, especially for part-time employees and freelancers.

Training and Up-Skilling

Traditional methods of upgrading skills such as classroom training and on-the-job coaching may not be suitable in the Workplace 4.0. Continuous lifetime learning will have to be provided as roles evolve and advances in technology demand changes in job content. There will be a greater need to provide on-line facilities for e-learning so that everyone, including remote workers, can keep pace with the developments in the profession.

Work Is Life

There is already a blurring of the boundaries between work time and leisure time. Some conflict areas are arising such as actual or perceived electronic surveillance and having to be available or on standby every waking hour.

Companies must develop strategies for a healthy balance between security, privacy and trust in their workers, applying the same level of management and administrative support to those that check into the office every day and those who work remotely.

Want to catch up on all of last week’s Big Ideas Summit activity? Join the group here

Procurement And Its Role in the Gig Economy

Predictions suggest that gig workers will represent a third of the workforce by 2020. What does the gig economy mean for procurement?

Register as an online delegate for the London Big Ideas Summit 2017 here.

The Gig Economy – an overused buzz phrase, refers to the growing number of people who work on a contingent basis. These people are not on a company’s payroll; they provide services on a consulting, freelance or temporary basis, either full-time or part-tine.

The number of people taking this route, because of a tight job market and pressures on the global economy, has risen dramatically in the past few years.

Millennials love the opportunities it brings and some over 55s are reinventing themselves in a new role. This is the new world of work. It is projected that gig workers will represent a third of the workforce by 2020.

Benefits of the gig economy for companies

Companies are struggling with rising labour costs and they need a workforce that can quickly adapt to market conditions. the benefits of a gig economy include:

  • Easily source skilled workers and experts for projects via on-line platforms or using third party staffing agencies
  • Scale their workforce up and down quickly to meet business demand
  • Increase speed of hiring and mobilisation due to simpler recruitment and faster budget approvals
  • Invest less in training and employee benefits
  • Reduce the cost of administration, office space and facilities

However, this attractive solution to the talent management headache comes with challenges for both Human Resources (HR) and Procurement.

What does it mean for the procurement function?

The procurement function is already benefitting by engaging contingent or temporary staff for its own use but has not fully explored the potential of the gig economy for filling job roles that are not repetitive or are not project-based. CPOs can ramp up their procurement savings and process efficiencies through using contingent workers more extensively.

Procurement  also has a role to play in the wider business, along with HR, to manage this growing trend. The ways of engaging with suppliers of services will change; potentially simpler contracts but using more specialist suppliers and even engaging with individuals.

What does it mean for the HR function?

Line managers will have staffing requirements and demands that HR has not experienced before, attracting and engaging a diverse workforce to satisfy their internal clients will require an adjustment in mind-set. It may help HR to engage with procurement professionals to apply tried and tested stakeholder management techniques.

  1. HR strategies for recruitment and retention will have to change.
  2. Policies for non-permanent employees must be more flexible
  3. Performance management measures such as key performance indicators (KPIs) will have to be adapted to suit the new ways of working
  4. More attention is needed to benchmarking market pay rates
  5. Additional effort is required to engage and motivate people working remotely

Risk and compliance

A bigger contingent workforce means increased risk. How do you manage to control hundreds or even thousands of workers that have access to your systems and technology?

It can become an HR nightmare to ensure compliance with policies and procedures and, at the same time, handle the administration. Specialist recruitment companies and HR service providers are relishing the opportunity and taking up the slack. They have experience in the legal and compliance issues in HR and have more capacity and energy to handle the day to day issues. Who sources and manages the outsourced services? Why, procurement of course!

Experts and advisors

There are also interesting developments among the more experienced and specialised independent consultants offering their services, especially in procurement. These people are not to be found through conventional recruitment channels, they are mobilising themselves into small professional services firms that network and collaborate to provide skilled professionals to commercial companies and government. 

Success factors for managing gig workers

  • Managing a remote and mobile workforce means providing the right collaboration tools and technology to ensure that they can honour their deliverables. Connectivity is the key: wireless links, video conferencing, internet access and suitable work spaces.
  • An organization needs to be agile enough to mobilise new teams and scale operations up or down to adapt to changing business needs. Inflexible polices, fixed locations and traditional office hours do not suit this solution.
  • A robust administration system is needed to manage a contingent workforce – external support may be the answer.

There’s no question that the benefits of the gig economy to an employer are many but it also comes with complexity.   Procurement and HR both need to play roles in this process but can they work together on the best solution?

No budget, no problem! Join the conversation and register as a digital delegate for Big Ideas 2017 now!

Treading the Fine Line Between Assertive and Aggressive

What is the difference between assertive and aggressive, and why does it matter in job interviews? 

assertive

Assertiveness is saying what you mean without being impolite, asking for what you want without making demands. Assertive behaviour helps you to avoid being manipulated or put off easily. This style is far more likely to create a positive impression than either aggressiveness or non-assertion.

Aggressiveness means that you stand out, but not in a good way. Being overly pushy or contrary will probably irritate and alienate the interviewer. You may get what you want in the short term but it may hinder your progress later. On the other hand, passive or non-assertive behaviour can lead to a loss of your self-respect. This is where you let others get their own way and make yourself into a walkover.

It has been reported that interviewers reach a decision about an applicant within five minutes after meeting them. In this time there is little more to evaluate than how you look and speak, how you carry yourself, and how you greeted the interviewer, all clear indicators of your level of self-confidence.

Being confidently assertive helps you reduce the stress in an interview situation and to exercise more control over your working life. Here are three ways to sail through the interview assertively.

  1. Prepare well

It’s a bit like preparing for negotiations. Research your interviewer and the organisation you are intending to work for. Know how to respond to those difficult, and sometimes inane, questions, like what would you do in a conflict situation or what makes you the best candidate for this job. Remember that assertive behaviour is not specifically designed to get you what you want in every situation; in fact, it involves negotiation and compromise.

Bring your notes and don’t be afraid to use them. It makes you look well-prepared. If something of interest is mentioned about the job, pause and write it down. Be professional and be the best prepared candidate they are likely to interview.

  1. Practice your success stories

It is crucial to create a strategy for communicating your accomplishments to your interviewer in a succinct and memorable fashion.  Do you have a C.A.R?  Skilled interviewers will look for proof of your stated achievements by drilling down into the details of what you say you have accomplished.

C.A.R. stands for Challenge » Action » Result.  Write down a few gems relating to work areas that will come up in the interview. By dropping a story into the conversation you can showcase the action that you took to overcome a problem and can demonstrate to your interviewer that you achieved the desired result.

Mini-stories should be succinct and limited only to relevant details, just a few sentences. They will allow you to share examples of your past successes and let your actions speak.

  1. Polish your communication skills

Candidates demonstrate their assertiveness by the questions they ask, as well as the questions they answer. One trait employers look for is the ability to communicate effectively at all levels in an organisation. Being too tentative with senior managers is not a good sign.  People are just people, so speak with confidence and show a positive attitude but with respect.

Come prepared with questions about the job, such as expected results after the first year, where it fits into the organisation and what happened to the person who had the job before. Practice your questions as well as your answers in preparation for your interview.

Speak clearly and use good diction at a reasonable volume. Talking too quickly and loudly is not being assertive, it shows nervousness. Non-verbal cues influence an interviewer’s impression of you just as much your words do, so keep up the eye contact. Express your opinions honestly, but wisely.

What the recruiters say

Candidates show a poor level of assertiveness when they:

  • Show a lack of confidence in expressing achievements and abilities
  • Sound unsure of themselves when answering questions
  • Are overly agreeable to everything said by the interviewer
  • Trail off or mumble instead of clearly completing a thought

At the end of the interview, ask what’s next in the hiring process.  You may not get a straight answer but it is clear that you want to know.

7 Habits of Highly Effective Networkers

Your network is one of the most important things to cultivate during your career. But what habits do the best networkers have? And how can you develop them yourself?

habits

Networking with career advancement in mind requires some planning and focus. The key to successful networking is to market yourself using resources available to you and uncover job opportunities that may otherwise be hidden.

Look at your network as a living and breathing organism that needs food and nurturing to allow it to flourish.

Your network should include anyone who can assist you with a job search or career move. It may include ex-bosses and ex-colleagues, current co-workers, HR managers in other companies and even recruiters. The best sustainable relationships involve considerable up-front investment and patience.

The best up-front investment and patience is done by developing good networking habits. So where to start?

  1. Who do you know?

Your best resource is the people you know already. Make a list of people that you feel can assist you in your career search, contact them informally and let them know you are in the market for a change. Let them know what type of role you are looking for, and if they ask for your CV, that’s fine too.

Don’t be shy to ask them who else they know that could help you. Remember the 6 degrees of separation? It has been said that there is only three degrees of separation between people in procurement.

The greatest value of your network for career advancement may be in the second degree, the contacts of your contacts.

  1. Get focused

While the first of the habits above is in progress, compile a list of specialist recruiters or HR professionals in the companies that you have identified as targets. Pick only the recruiters that have expertise in your niche, generalists may waste your time.

Make sure your CV and contact details are up-to-date. It sounds obvious but is often overlooked. Contact the identified person directly and ask them for information and advice about working for their company or for their clients.

Where you make good contacts, follow up regularly and be persistent.

  1. Keep tracking your network

Keep a journal of your networking activity. Who did you contact, when and what transpired? Schedule the next actions and continue to follow up. This is what all the best salespeople do.

When people change their job their address and other details change. When they move, drop them a note to wish them well and find out what they are up to. Their new opportunity could lead to a new opportunity for you.

  1. Be a resource

Help others with sharing your contacts, experience and knowledge before helping yourself. Many people fail at networking because it’s obvious they are just a one way street. You get back what you give, it’s called pay it forward.

If you expect to leverage people in your network, you have to be prepared for people to use you too. People will invariably return the favour if they consider you to be a good resource. If you become aware of an opportunity or an event, send it on to the appropriate people in your network.

  1. Listen carefully

Take time to find out about the person you’re talking to before showcasing your own achievements. Standing and speaking in a similar way to your colleagues – i.e. ‘matching and mirroring’ their body movements and tone of voice – is an excellent way to relax people, which helps to build rapport and establish areas of common interest.

Be interested – turn the conversation back to the other person. People love to talk about themselves! If the conversation has reached its natural end, move on, respectfully.

  1. Networking at events

Conferences, industry events and trade shows offer great opportunities to network with people from other companies in your industry or your area of functional expertise.

You can tap into an organisation through the delegates even if they are not from the area you are interested in, they can open the door to a more relevant contact, maybe a senior executive or HR manager.

As they say, just work the room.

  1. Be online, but selectively

Any information you provide online about your job background and accomplishments should be consistent across social media.  Don’t assume a prospective employer or recruiter will only be checking you out on LinkedIn.

You can be rejected outright before you get asked for your CV if you are seen to be unprofessional in any way such as misrepresenting your achievements or qualifications. Any inability to communicate clearly in writing will also lose you opportunities.

When networking online, make sure that you know what you want and be specific in any request to your contacts.

Remember, it’s not all about you! Develop these habits, and keep track of your network, and it should set you on the road to success.

The Procurious Boot Camp will increase your stamina, get you in the best career shape of your life and help you to punch above your weight.

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