All posts by Procurious HQ

Big Ideas Summit 2016: Big Idea #2 – Procurement Owns Talent

Mark Roberts, Global Procurement Capabilities Director at AB InBev, believes that procurement should be the gateway for new talent coming into the organisation.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Mark Roberts, Global Procurement Capabilities Director at AB InBev, says that procurement institutions and bodies need to do more to tell people what procurement is about, and organisations need to now be bold in order to attract the best and the brightest of new talent.

Catch up with all the thought leadership and ours delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

If you want to find out more about Big Ideas 2016, and what we have planned for 2017, you can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today, and connect with over 15,000 like-minded procurement professionals from across the world.

National Women in Engineering Day – Raising Profiles

National Women in Engineering Day 2016 is all about raising profiles and showcasing why engineering is a great career for women.

NWED Raising Profiles

Thursday the 23rd of June isn’t just about the UK’s EU Referendum. In fact, there’s something happening on Thursday that it would be remiss of us to overlook, or let be completely overshadowed by the vote – National Women in Engineering Day 2016.

Building on Success

NWED 2016 is aiming to build on last year’s success, when over 400 organisations, including schools, colleges, universities and industry bodies, from across the world, got together to celebrate achievements of women engineers, and encourage more girls and women to consider a career in engineering.

But first, a bit of background. The first National Women in Engineering Day was set up by the Women’s Engineering Society (WES) as part of its 95th anniversary celebrations. The society wanted to highlight the opportunities available for women in engineering, at a time where the industry was suffering from a skills shortage.

The WES felt that by encouraging more girls and women into engineering, it would help to improve diversity, fill the skills gap and enable the  industry to cope better with future job requirements. NWED was created to support this aim, allowing organisations to set up their own events, and link together with others in order to maximise the impact of the message.

Importance of Raising Profiles

The sub-theme for this year’s NWED is ‘Raising Profiles’, something the organisers see as key to bringing more women into the profession.

Alongside the publication of the ‘Top 50 Women in Engineering‘ list in Thursday’s Daily Telegraph, institutions are being encourage to share the profiles of their female engineers, their stories and achievements.

Raising Profiles is also about changing the perceptions of engineering as a male-dominated, physical, dirty work, and showcasing the reality that not only are women just as capable as engineers as their male counterparts, but there are already examples of where women are succeeding at the top of the profession.

You can read about just a few great examples here.

Get Involved

While it might be a bit late to organise your own NWED 2016 event, there are still plenty of ways you can get involved:

  • Visit a local university to highlight engineering as a career
  • Make a plan to increase your corporate diversity and launch it today
  • Raise the profile and celebrate the achievements of your female engineers
  • Feature an article in your newsletter or on your website about your female engineers
  • Follow events, and help promote the cause, on social media at @NWED1919, and by using the hashtags #NWED2016 and #RaisingProfiles
Why Spread the Word?

You might be wondering why Procurious are profiling National Women in Engineering Day when we aren’t an engineering-related platform.

Well, besides it being a great campaign to get behind, it’s clear there is still work to be done. It’s estimated that the gender gap in engineering subjects has doubled in the past eight years.

Even with the awareness of NWED increasing, it can still fall victim to a lack of time for organisations to support it fully. As one female engineer at a global engineering organisation put it to us, “Personally I would love to see more support for it. I have supported the event in previous years and it is excellent. Unfortunately ‘business pressures’ tend to get in the way of greater support.”

We also firmly believe that procurement and supply chain could, and perhaps should, follow suit with similar events for this profession. After all, why should raising profiles be limited to engineering. We’ve talked previously about women in supply chain, and gender diversity, and NWED is a great example of getting a wide group of people involved in a common cause.

Isn’t it time to take a positive stance in procurement and supply chain? Procurious can provide the platform – can you provide the support?

Are Traditional Views Limiting Procurement Innovation?

Is a lack of competitiveness and a risk averse nature holding back the progress of procurement innovation? New research seems to suggest so.

Procurement Innovation

New research shows that procurement is innovating and wants to do so even more in the future. However, the function’s risk averse nature, non-competitive attitude, and the prioritisation of collaboration over leadership, may be holding back its progress.

While many procurement professionals and leaders are embracing procurement innovation, many appear to be innovating within a safe environment, sticking with the things they know about, such as the supply chain.

Procurement says its ability to innovate is stifled by what others think it’s there to do, but isn’t it time that procurement stopped worrying what others perceive it as and started focusing on realising its full potential?

Limiting Procurement Innovation

Wax Digital’s new Procurement Innovation Pathway research, which surveyed 100 of the UK’s senior procurement professionals, shows that 69 per cent considered themselves pivotal to business innovation today, with 80 per cent expecting to be so in the future.

On average, 76 per cent said that they are involved in a range of business innovations, but only 27 per cent are leading them. However, 86 per cent said they want to be a part of all ongoing product innovations and service developments in the future – not only those within the procurement function.

But procurement’s view of what makes a business innovative appears to be impacted by some of its traditional risk averse thinking. Having a clear business vision (42 per cent), reacting quickly to the market and customers (33 per cent) and reviewing and improving business processes (32 per cent) were procurement’s top cited factors associated with business innovation.

Other characteristics traditionally more innovation related, however, are at the bottom of their list. Only 20 per cent cited a willingness to take risks, and 19 per cent a high investment in R&D, for example.

Procurement Innovation Barriers

Procurement identifies a number of factors stopping it innovating, most frequently other departmental views (40 per cent), lack of required skills (33 per cent) and time consuming processes (31 per cent).

And while these factors clearly play a part, there seem to be attitudinal setbacks with procurement’s own mind-set. Only 10 per cent, for example, are focused on challenging business objectives; just 14 per cent prioritise competitiveness and 18 per cent leadership as skills within their team – which they also say are declining traits.

Commenting on the research’s finding, Daniel Ball, director at Wax Digital said: “It’s fair to say that the average procurement function today is a vastly different place to what it once was. Procurement is innovating – of that there’s no doubt. But are they heading in the right direction or truly prepared to break the mould? Clear indicators of some discomfort with taking risks and really leading and driving innovation suggest it’s not yet realising its full potential in this area.

“To become real innovators, procurement professionals must overcome these issues while fostering the right business relationships, nurturing the correct new skills and seeking to break ground in their approach to technology.”

The Innovation 2016 research was conducted by Morar Consulting in March 2016, involving 100 interviews to canvass the opinions of UK senior procurement professionals working in small to large UK enterprises.

You can find out more about the research, and download the report, by visiting the Wax Digital website.

The Key Role of Procurement in Risk Mitigation

As average spend with suppliers increases, procurement must be more active with the management of risk mitigation in the supply chain.

Risk Mitigation

Increasingly companies have a higher percentage of their cost base with suppliers, frequently as much as 50-70 per cent. Typically half of this is indirect spend on functions such as Marketing and Human Resources.

It is clear that as the cost spend increases with these suppliers, procurement is playing a key role as a broker and helping to drive the revenue line. However, if the majority of cost base is outside of the company’s walls, this presents a major business risk.

This is particularly alarming in industries such as financial services and pharma, where the regulatory and reputational landscape is complex. How can procurement help with risk mitigation, and also help senior executives have greater confidence that their supply chain is in order?

Mitigation & Segmentation

According to Jon Kirby and Paul Birch, from Business Process Transformation consultancy Genpact, organisations must institute better and more sophisticated risk segmentation, dividing the procurement supplier base into distinct risk tiers.

This does not necessarily mean that the largest suppliers in terms of spend will pose the largest risk. Companies should also be continually re-assessing supplier risk and asking questions, such as:

  • Are any of your suppliers at risk of bankruptcy?
  • Are there any global or geopolitical issues in your supply chain that could disrupt it?
  • Do you have systems and processes in place to regularly evaluate and monitor your most important suppliers?
  • Have you embedded risk evaluation into the on-boarding of new suppliers?

Creating stronger links between the lines of business and the procurement function can also ensure that the risk profile is in line with business priorities.

Procurement’s Role

There are a number of factors procurement professionals can keep an eye on when tasked with supplier risk mitigation. Sandeep Singh, Vice President – Procurement and Supply Chain Services at Genpact, shares his experience across these factors.

  • What are the signs that procurement needs to watch out for when assessing suppliers’ bankruptcy risk?

Assessing the financial health of a supplier should be a critical part of selection, as well as the ongoing relationship management process. Financial failures in today’s economy are not uncommon and can cause disruption to companies business.

Procurement professionals should pay close attention to the following aspects of business when assessing a supplier’s financial condition or bankruptcy risk:

  • Financial information – including profitability or margins; revenue growth; liquidity; negative cash flow.
  • Law suits such as where supplier is being sued for collection matters.
  • Managerial and employee related events such as resignation of key members of management, or abnormal turnover of employees.
  • Poor quality of product or services, or long term order delinquencies.
  • Inability to produce timely and accurate financial information.
  • Delay and penalties due to outstanding tax and statutory issues.
  • Request for special payment arrangements, such as changing terms of shipment to Cash on Delivery, or request for advance payment
  • Declining relationship with their bank or frequent change in their banks.

However, applying various signs and parameters to assess a suppliers financial condition can be a huge challenge for procurement, for the following reasons:

  • Financial assessment needs to be a continuous process, and doing it only during selection process may not be sufficient.
  • How priorities are given (i.e. which supplier to cover and which supplier to exclude).
  • Large supplier base can run into the thousands.
  • Multiple early warning signs and financial parameters.

To overcome the above challenges, leading global companies are leveraging Lean Digital solutions, which combine digital technologies with design thinking. This results in procurement being able to segment their supplier base with minimal effort, and being able to prioritise multiple early warning signs and financial parameters.

The adoption of the Lean Digital approach also provides companies with the ability to conduct ongoing financial risk assessments on their suppliers as opposed to doing it only during the selection process.

So what else can procurement do to assist with risk mitigation in the supply chain? For this you’ll need to come back for the second article in this series.

Genpact offers a number of procurement services that can be tailored to specific client needs, including end-to-end Source to Pay (S2P) services for both direct and indirect materials. Find out more by visiting their website.

The EU Referendum – Supply Chain Trade at Stake?

No matter where you are in the world, you’ll have heard about Thursday’s referendum in the UK about its EU membership. Have both sides overlooked a critical point in the debate?

EU Referendum

This article was written for Procurious by Chris Cliffe.

Procurious is a global platform, but wherever you are, you’ll have heard about this week’s referendum in the UK.  Will the UK #RemainIn or #brexit the EU this week?

Far from being specific to the EU, I think it’s a global issue. And one I find myself thinking about sitting on a train…

Referendum & the Supply Chain

No one can agree on the exact figure (£350m-£380m per day), but the UK is a ‘net contributor’ to the EU. In fact, the UK is one of the biggest net contributors along with France and Germany. But what about taking this issue in (very) simple supply chain terms?

Customers pay suppliers for products. Suppliers make profit from product sales. Therefore we can view customers as ‘net contributors’ to suppliers, much like the UK to the EU. What would happen if a supplier were to lose one of its biggest customers?

The loss of that customer’s revenue needs to be mitigated.  Replacing that customer with new business of equivalent size will be difficult, or at least take a long time. Whilst costs may have gone down through no longer servicing that customer, cost reduction is not proportionate to the lost business, leaving an increased cost to be recovered from remaining customers.

What are the options? The supplier can: take the hit; make efficiency savings; increase prices for other customers; or pass on the cost to the supply chain.

So, if the EU loses a large net contribution, other member states will either see a reduction in EU funding, as there is less money to share out, or they will have to renegotiate their contributions to the EU to make up for the shortfall.

Contributions are proportionate, so all member states will either see their contribution increase, or their share of the funding reduced. France and Germany would likely be most affected.

Shifting Issues

The UK might view this as the EU’s problem. However, all that will have happened is the ‘problem’ has just changed.

Assuming France and Germany – two of the UK’s largest trading partners – did pay more into the EU to cover the loss of the UK’s contribution, how will they take the hit? More austerity? Or will they pass on the cost to their customers – particularly if the customer caused their cost increase!

The UK will want to continue to trade with the EU member states.  That will be possible, and the member states will want to trade.  However, having left and caused those very same member states to see higher costs as a result, I’m struggling to see why we aren’t more concerned about potential ‘tariffs’ which may be applied.

The risk is that the EU will want to recover the ‘cost’ it suffers from a Brexit. Furthermore, the EU will debate and agree their stance on this. And guess what – the UK won’t be at that table.

Supplier Perspective

From a supplier perspective, losing a large customer simply to find that customer still wants your product, but just didn’t want to pay for it is frustrating enough. But what example would you set to your other customers if you actually agreed?

Of course, suppliers will be happy to supply those products, and even though the commercials of the deal might change, you’ll inevitably be charged the same (or more as the deal is no longer standard and will have introduced complexity, risk and cost). Other customers will be watching you.

But the UK isn’t just a customer, it’s a supplier too. Exiting the EU may mean higher costs for the UK’s customers, meaning they have less money to spend. They may want to trade, but could buy less, or need lower prices to compensate.

Let’s consider Framework Agreements. Frameworks are really useful commercial vehicles (a separate debate!) to access products and services without complex, lengthy advertised procedures.

Typically, a set of suppliers are appointed to a Framework for a fixed period. Suppliers who are not appointed to the framework cannot trade through it, and consequently find it more of a challenge to trade with the public sector, who want to use the ‘easy’ route.

Think of the EU as a framework, and the member states as the suppliers appointed. The UK could be about to give up its hard fought position on the framework. In doing so, the UK will be making itself more difficult to trade with, and it will be natural for current EU customers to look at other, less complex, sourcing options.

So, if the referendum goes for #Brexit, does the UK become just a country geographically in Europe, but in the ‘no longer free to trade’ area? Is the UK’s slice of the EU trade pie more at risk than either campaign have realised?

Well, I conclude that…my train has arrived on-time! Don’t forget to  vote if you’re eligible!

Want something to take your mind off the referendum? Here are the week’s procurement and supply chain headlines…

Starbucks Names New Supply Chain Chief

  • Hans Melotte, former Johnson & Johnson CPO, and current Chairman of the ISM Board of Directors, has been appointed by Starbucks as its new Executive Vice President of Global Supply Chain.  
  • Starbucks has approximately 16,000 suppliers and operates in over 70 countries and has recently announced plans to open a 20,000 square-foot roastery in New York.
  • Mr Melotte will oversee supplier relationships, distribution, transportation and store delivery, and is expected to transform stores’ distribution channels in line with company expansion.
  • Mr. Melotte also featured in Procurious’ recent article on the use of the term ‘strategic’ in the profession.

Read more at the Wall Street Journal

World Day Against Child Labour

  • The ILO’s World Day Against Child Labour took place on Sunday 12th June, with this years’ focus on child labour in supply chains.
  • An estimated 168 million children are found in supply chains across the world, in every sector and region.
  • “The time for excuses is over”, said ILO Director General Guy Ryder. “With redoubled from governments, employers, workers organisations and enterprises, child labour in supply chains can be stopped.”
  • The ILO has developed a new app designed to help business managers and auditors to create checklists that will help ensure a child labour-free operation.

Read more at the International Labour Organisation

M&S Unveils New Supply Chain Mapping Technology

  • M&S released its first online supplier map alongside its inaugural human rights report last week, showing 1,231 factories in 53 countries.
  • The interactive map has the capability to zoom in on individual facilities to see the address, number of workers on site, and gender of those workers.
  • The data for the map comes from supplier-reported information and third-party audits.
  • The mapping technology is expected to greatly improve supply chain visibility, and can be tailored to include more data.

Read more at Green Biz

Best and Worst Sectors for Online Customer Service

Utility companies and local authority services are among some of the worst ranking sectors in the UK for online customer service, according to new research.

Online Customer Service

The new report from social media experts, myclever™ Agency, found that consumers put utility companies (water, gas, electricity, phone and broadband) as the most frustrating sector for online customer service, with local authorities close behind. Retailers and professional services came out as the least frustrating sectors.

The report surveyed 1,000 UK consumers on whether current digital services are fully meeting consumer expectations, and their views on whether new technology, such as Chat Bots, could help improve customer service.

Biggest Frustrations

It found that the biggest online service frustrations across all sectors was a lack of basic information contained on everyday commercial websites such as retailers, utilities, banks and local government services (45 per cent).

Close behind was the inability to ask simple questions (40 per cent), while a third of the sample (33 per cent) said that, even when the option to ask questions existed, the tools they had used in the last month were of poor quality and didn’t provide a timely response.

The main frustrations lie in the inability companies have to answer simple questions quickly. However, when told about the benefits, consumers regarded Chat Bots as the key-holders to speed, unlocking immediacy and convenience in online services. They felt that these virtual assistants, designed to simulate conversation with human users, would significantly improve online services.

More than two thirds (68 per cent) liked that Chat Bots would be able to provide a 24-hour service, and 64 per cent felt it would resolve the problem of not getting quick answers to simple questions. More than half (51 per cent) felt happy they would get an instant response, mirroring the frustrations felt about current online customer service providers.

When compared to other forms of customer service channels such as apps – an area where businesses have invested heavily – chat bots scored more highly on all perceived benefits.

Demand for Online Customer Service

Rob McNair, managing director of myClever, commented on the findings: “Ever-evolving technology and an increasingly digitalised world has changed commerce forever. Online services that were once a luxury are now being demanded by consumers 24/7. In order to stay competitive, businesses are racing to keep up with consumer demands and technological innovations.

“The frustrations clearly indicate the need for online customer service to improve. And, although frustrations exist in all sectors, it’s interesting to see that the industries exhibiting the most frustrating customer experiences online are the least likely to improve them. Public sector bodies, for example, are notoriously slow to provide accessible online services – and when they do, they’re often inadequate, confusing and riddled with poor user experiences.

“It’s one thing if bots can make that a thing of the past, it’s another whether those ranking highest on this list will be prepared to adopt and invest early enough. However, while modest budgets can be a challenge for the demands of digital innovation, the investment in the long term will mean huge cost savings.

“Businesses offering the best customer experience will be at considerable advantage in converting browsers into buyers and earning repeat business. Chat Bots offer a solution to most major problems of each sector by promising a swifter, smarter online experience. New virtual assistants will be ever-ready, able to listen to our questions and respond intelligently. They will answer our queries, aid our searches and anticipate our needs, learning all the time to refine and improve the experience on offer.”

The full list of rankings and report can be found here. For more information on myclever™ Agency, visit their website.

Big Ideas Summit 2016: Big Idea #1 – Share, Share, Share

Tania Seary, founder of Procurious, believes that procurement needs to share – share learnings, stories, experiences, and questions – in order to change the face of the profession.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Tania believes that the power of positive words and imagery, such as Avenger, Superhero and Rockstar, combined with the business words like collaboration, can make a huge impact on the people who make decisions in business in how they see procurement.

Catch up with all the thought leadership and ours delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

If you want to find out more about Big Ideas 2016, and what we have planned for 2017, you can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today, and connect with over 15,000 like-minded procurement professionals from across the world.

Big Data Success Stories in Procurement?

At the end of our last Big Data article, we indicated that we were going to track down some Big Data success stories from the procurement function.

Big Data Success Stories

What we found, or rather what we didn’t find, was a cause for concern. A criticism of Big Data has always been that it is nothing more than the latest marketing buzzword, and that Big Data is something that everyone talks about, but very few people or organisations actually do.

We remain unconvinced by this, but based on some fairly high level research and trying to find some real world examples, it would appear that procurement either isn’t properly utilising Big data, or it isn’t actively promoting its use, and celebrating successes, externally. The latter is bad enough, but the former is worse.

A search for how Big Data is being utilised in procurement around the world returned very few real-life examples. There were a number of great case studies around how other business functions have used big data to solve business problems, but procurement solutions appeared to be fairly thin on the ground.

Rio Tinto Trucks

One of these Big Data success stories, leading towards cost savings and procurement-led wins, that appeared as a result of our search was from the Australian mining giant, Rio Tinto. The company is using Big Data to monitor the state of the roads at their mine sites.

Site roadways are a critical asset for mining organisations and, in the past, their maintenance checks have been carried out by members of the workforce. This makes for a very time consuming and costly manual process, which ultimately is still vulnerable to human error.

Rio Tinto has recently improved this process dramatically by using a data driven approach. The company’s mining trucks now carry 300-400 sensors that constantly send data back to an operations centre.

A team in this centre processes the information received to provide the business an understanding of the condition of site’s roads, feeding back on the state of degradation and any maintenance work that might be required.

This analysis is carried out at a remote location, where staff are provided notifications on when an issue is likely to occur, rather than once it already has. This saves precious time and money that would be spent on manually reviewing the road condition, while also enabling preventative maintenance to be carried out, rather than disrupting operations when a larger issue is reported.

Challenges for You

Maybe we have missed something, or our search hasn’t been focused enough to uncover more Big Data success stories in the procurement space.

There are are guaranteed to be more examples in the business world of how procurement teams have used data analytics to improve the processes and performance of their business. In light of this, Procurious lays down the gauntlet with a couple of challenges for you:

  1. If you know of a great example of a successful application of Big Data in procurement, let us know! We would love to tell your story and share your experiences, thoughts and plans with the rest of the procurement community.
  2. If you think your organisation has a great example, find out who you have to speak to and get it publicised. Making more people aware of this can position your organisation as a leader in this area, and get people talking about it too.

Comment on this article, or send us an e-mail at [email protected] and we’ll profile it in an upcoming article!

Mastering the True Art of Saving

Why addressing demand management, and bringing down your demand can realise more of a procurement saving than simply cutting costs.

Art of Saving

This article was written by Jon Milton, Director at Comensura.

Most of us know too well the need to tighten the purse strings occasionally in our daily lives. When doing so it’s a natural response to search for cheaper alternatives to the services and products that you’re already buying.

Think about your home energy expenditure for example. Let’s say that you shop around and find a supplier that charges 5 per cent less than you already pay. That’s a good reduction, but it’s a saving within the scale of pricing which, aside from some major shift in energy production trends, is only going to vary to a certain degree. This kind of cost-saving approach will typically only be incremental and rarely save you a dramatic amount.

However, there is an alternative way to save – by managing down your demand. Rather than the pain of switching provider, you could install a smart energy meter and manage down the demand for energy throughout your home, eliminating excessive energy used, and pinpointing when and where you need the heating on. A smarter approach like this could save you much more than 5 per cent.

Smart Saving

It’s for that reason that a cost cutting approach that goes beyond incremental savings should be applied to the corporate world too – especially in complex spend categories such as temporary labour. It’s difficult to know for sure how many workers you need, as it requires you to have an overall view of your organisation’s demand.

And once you establish a number, the sample of workers that are on offer to you vary by qualifications, experience, skills, availability, geography and more – all of which affect how much the candidate costs – making temporary recruitment a complex service category.

Think about how much money organisations could be wasting by hiring the wrong number of temporary workers, the wrong kind, or by not utilising their skills properly. Our evidence as a labour supply management specialist shows that by accurately sourcing the right skills against the organisation’s demand, you can take your cost saving on temporary staff from less than 20 per cent, to over 50 per cent.

Addressing Demand Management

Here are some steps you can take to address temporary labour demand management issues:-

1. Understand your expenditure

Temporary labour is typically ordered directly by line managers as it is under their supervision and control that workers are engaged. There’s usually a business rationale, but is it justifiable?

Additionally, the original rationale for engaging temporary labour will normally be linked to a set time period, such as three months. Any expenditure beyond this initial period should therefore be questioned as to why it is required. 

2. Challenge usage

Once you’ve established an understanding of what’s being spent on temporary labour, ask your managers to justify any anomalies. If they cannot provide sound business rationale, ask them to create an exit plan for the worker and an agreed date. When you review usage the following month, make sure that the worker has been exited.

3. Start planning your workforce

If your use of contingent labour is reactive, ‘fire fighting’ to meet business demand, it is unlikely that you will be in control of your expenditure. Try and review your ordering patterns to identify trends, as this will enable you to plan the workers’ tasks and/or help you to plan your permanent headcount’s activities better.

For example, if historically your usage of contingent workers has a spike in August when staff go on holiday, you may want to review the way that you co-ordinate leave requests, and then plan ahead where cover is required.

4. Properly evaluate needs

Feeling the pressure to hire contingent staff and then recruiting staff that are over qualified (and paid more than the work requires) is one way to rack up an unnecessarily hefty bill. By understanding your requirements fully, you can better establish the experience and type of individual required.

5. Provide a detailed specification

Once you’ve established and understood your requirements, make sure that you, or managers across your organisation communicate these requirements properly. If you want someone with certain skills and experience, be specific about what you need. It sounds simple but it is one of the most common pitfalls that we come across and can cause significant issues.

Often the role is specified (which in an applicant’s mind they could do), but the experience, demonstrable evidence of skills and attributes are not. The more detailed you are, the closer your applicants should be to the requirement. You may get fewer applications, but the quality of hire should be much better.

Saving on Category Procurement

Many organisations are already taking a sound approach to complex category procurement, and with the financial benefits they’ve seen, it’s safe to say that they don’t regret the decision. One of our customers regularly uses temporary staff, and chose us as a single platform to place orders, assign candidates, and manage its temporary staff time sheets.

Having saved £900,000 on temporary staff in 17 months, and delivered a 10 per cent cost saving overall, the customers’ smarter approach to managing temporary staff means that it can invest more funds into vital areas of the organisation.

Just as its name suggests, complex category procurement is a tricky process, particularly when looking for ways to make procurement cost-effective. But provided you look at the wider picture of your organisation, you can restructure processes and gain the benefits.

It starts with making a distinction between your complex and simple procurement, and approaching processes like temporary recruitment in a smarter way that means not just finding cheaper providers.

Businesses Alarmed by Digital Skills Shortage

A major training effort is needed to improve digital skills, and make sure people are not left behind in the digital age, say the Institute of Directors.

Digital Skills

The Institute of Directors (IoD) have stated that a major effort is required in the UK in order to ensure that workers have the digital skills required to keep up with technological advances.

The IoD was responding to a report from the House of Commons Science and Technology Committee, which suggested that, while 90 per cent of current UK jobs required digital skills, over 12.6 million UK adults did not have the skills to allow them to perform these roles.

The report also stated that two-thirds of digital-based organisations have struggled to fill a vacancy in the past 12 months, and that 93 per cent of technology companies have seen a direct impact on commercial operations from a digital skills gap.

This is despite over 12 per cent of Computer Science graduates still being unemployed six months following graduation.

Digital Exclusion

The House of Commons report also highlighted a worrying trend in digital exclusion, with 23 per cent of the UK population lacking even basic digital skills. These include a high percentage of disabled and elderly people, as well as those without a formal education.

However, the good news on this front, is that around 4.5 million of the 12.6 million are currently in full time employment, with employers being asked to assess how to aid with digital skills education and training.

While the impact on the economy of these statistics is estimated to be in the region of £63 billion per year, in lost potential GDP, individuals also miss out on savings of £560 per year on average by not being online.

The report concludes that there is more to be done by the UK Government, both in terms of facilitating the training of digital skills, but also putting the infrastructure in place to enable the entire population to have access to the Internet.

Digital Skills Education

In April, the IoD released a major report arguing significant changes to education and life-long learning were needed to enable the UK to adapt to rapid advances in technology and automation.

The IoD’s Chairman, Lady Barbara Judge, in a piece for the Sunday Telegraph yesterday said that society needs to make “a concerted effort to upskill and reskill its population, and not leave a whole generation ill-equipped to meet the new reality”.

Seamus Nevin, Head of Employment and Skills Policy at the Institute of Directors, said of the House of Commons report: “This report shows the need for businesses to invest more in training British workers. We also must make sure tomorrow’s workforce is leaving school or university with the digital skills that employers require. Just as importantly, we must enable people already in employment to retrain or up-skill in order to meet the demands of the changing workplace.

“The IoD has called for the government to increase the use of technology in education — such as use of MOOCs (Massive Open Online Courses) — to provide training at much lower costs and improve access to learning for all. We have also suggested the creation of tax incentives to encourage and enable people at all stages of their career to return to education and learn new skills”.

“The Committee says the UK needs another three quarters of a million workers with digital skills by next year. In order to meet the immediate shortfall, businesses must be able to access workers with the right skills from abroad.”