What’s procurement like in your part of the world?

At the time of writing Procurious boasts members from 100+ countries, is yours represented?

We’re truly global

Yes we may keep a map of the world on the wall at Procurious HQ… What of it?

From Azerbaijan to Zambia, Procurious members circle the world! If you’re just casually browsing the site, why not join up and stake a claim for your part of the world?

We want to hear your stories! How well is procurement represented, what’s it like being a procurement professional – how does it differ from elsewhere in the world? Drop us a line if you’d like to be featured, just like Helen, Happymore, Hal, and Sergio below:

Exciting times ahead for Scotland

We asked Helen Mackenzie about procurement in Scotland:

“Not sure about the Scottish private sector but public procurement in Scotland is really buzzing at the moment.  The Scottish Government’s just got the new Procurement Reform Act through the Parliament and so sustainable procurement is high up on our agenda.  

There’s never been a better time to be in public procurement.  At last many of us are getting to take up our seat right in the heart of corporate management and decision making.”

Click here to read the rest of Helen’s piece.

Procurement in the USA? A different beast

Flying the flag for the US, Hal Good could only estimate when quizzed on the number of working professionals throughout the 50 constituent states:

“In 2008, according to the Department of Labor, there were 68,000 “purchasing mangers” employed in the US.  The latest Bureau of Labor statistics estimated 504,600 “jobs” for Purchasing managers, buyers and purchasing agents.”

How does it differ exactly? “Contractors doing business with the US Federal Government, are committed to utilization of the FAR program which gave rise to the National Contract Association (NCMA) and its educational programs and credentials.  

This has spawned a difference in terminology and to some extent practices within the profession in the USA itself, as well as with the rest of the world.  That is probably due to the vast influence of CIPS in the international arena.”

See Hal’s answers in full.

What does procurement mean to developing countries?

Procurious member Happymore Mambondiani previously spoke to us about some of the challenges procurement poses in his home country – Zimbabwe:

“Currently procurement is undertaken by unqualified personnel in the majority of organisations in the country be it in the public or private sector.

In Zimbabwe (unlike other countries where procurement has grown as a profession), procurement has not yet developed into a function. Instead it has been lumped into a wing under the finance department – this is true except for all but the biggest firms like Tangaat Hullets (a sugar producing company) in the South East Low veld of Chiredzi/Triangel.

At a National level procurement is undertaken by the State Procurement Board which is under the Ministry of Finance. The State Procurement Board should be a ministry dedicated to the handling of government purchases of goods and services.”

See more of what Happymore has to say here.

Italy: home to some of the best negotiators in the world…

Procurious’ greatest Italian advocate – Sergio Giordano, explains how procurement has been split into two:

“Once Procurement in Italy was ’emotional price negotiation’ the Italian Procurement professional was one of the best negotiator in the world … but nothing else. Today in Italy things are partially changed, there are two distinctly separate worlds in procurement management – 

  • The large national and multinational companies in which the concept of Procurement has evolved (not just negotiating the price but the TCO, the knowledge of local and global market, management of the relationship with suppliers, the use of e-Procurement, Lean Procurement approach, etc…) they use the same “tools” and strategies of the most competitive and advanced European nations.
  • SMEs (92% of the Italian companies). Today SMEs are realising that joining in network can help to become competitive to the market as large companies and things are changing also in the Procurement management.

However, in Sergio’s opinion one distinctive difference will always remain: “during the negotiations Italians tend to play ‘Poker’ instead of ‘Bridge’…”

Hear more from the great man – view his comments in full.

The battle for sustainable palm oil

In another life, I was an extra on Home and Away (an Aussie soap opera) something I was put onto by a university friend. Despite receiving critical acclaim (from my mother) for my role as the ‘front desk operator’ at the Summer Bay Gym, I decided to leave the bright lights of showbiz and pursue a career in procurement.

My university friend however, stuck with ‘the business’ and recently starred in the following online commercial for the not-for-profit group Sum of Us.

The commercial, which has now gone viral with nearly 2 million YouTube views, discusses the sustainability of the supply chain for PepsiCo’s popular Doritos corn chips. It starts with two starry eyed lovers sharing their passion for Doritos and ends with a stern message to consumers that PepsiCo’s use of unsustainable palm oil is not acceptable.

Palm oil – The Sustainable supply chain’s figurehead

Palm oil has been at the centre of the sustainable supply chain debate for years now. The production and use of this product in consumer goods has gained notoriety for its lack of supply chain transparency and alarming environmental and social impacts, some of which are listed below:

Environmental impacts of palm oil farming

  • Large-scale forest conversion
  • Loss of critical habitat for endangered species
  • Soil erosion
  • Air pollution
  • Soil & water pollution
  • Climate change

Social impacts of palm oil farming

  • Land grabs
  • Loss of livelihoods
  • Social conflict
  • Forced migration

(Source WWF)

In it’s defence, PepsiCo has refuted the claims made in the Sum of Us advertisement and restated the company’s commitment to ensure all palm oil used in its production is sustainably sourced. The company claims it is making moves with suppliers that will ensure all palm oil providers are compliant with PepsiCo’s Forestry Stewardship Policy by 2016. The organisation has made a further commitment to achieving zero deforestation in company owned and operated activities throughout its supply chain by 2020, a timeline that as drawn some criticism from environmental group.

Sustainability and Brand

The Sum of Us campaign once again exemplifies the inextricable links between supply chain performance (particularly purporting to sustainability and the environment) and overall brand image.

Perhaps the strongest indication of this link can understood through the quote below. In response to questions as to why the campaign focused solely on the Doritos product (and not PepsiCo or the palm oil industry in general) Sum of Us stated:

“We find that focusing on brands that have resonance with members increases the chance of the campaign getting exposure and being effective. Consumers may not know or understand how PepsiCo operates, or a palm oil trader or supplier, but chances are they’re very familiar with Doritos.”

An Ongoing Battle

The battle for sustainable palm oil looks set to continue with Greenpeace claiming the Roundtable on Sustainable Palm Oil (RSPO). The RSPO is a certification standard established in 2004 to minimise the environmental damage done by companies using palm oil, and it is falling well short of its stated goals. In a report, published in February 2014, Greenpeace launched the following – a criticism of RSPO members:

“On the ground, we’ve seen lots of RSPO members still doing forest clearing in the area, which is an indication of weak enforcement and a weak standard. RSPO, from my perspective, has been used for green washing by companies who want to expand their plantations into the forest.” (PepsiCo is a signatory to the RSPO agreement).

Simon Lord – group director for sustainability at New Britain Palm Oil, believes large organisations need to take greater responsibility for their role in the side effects of palm oil production:

“People have hidden behind the easy options and have pushed the problem down the supply chain, and conveniently forgotten that they are a player in the supply chain and have a duty to source responsibly.”

Are the standards for sustainable palm oil production a step in the right direction? Or are they merely a shield for large organisations to hide behind? Leave your thoughts on the palm oil industry below.

PwC on business intelligence systems and organisational change

50 per cent of the costs of public sector administration and service delivery are incurred through procurement. Contracts are getting more complex. More is expected of them. BiP Solutions know this and as a result have enjoyed considerable success with their Procurex Live brand. 

The 2015 dates for these procurement exhibition, conference and training events have recently been announced, use our Events listings to RSVP and secure your place below:

Procurex South Live 2015
Procurex North Live 2015

Both events have been designed to support commissioners and procurement practitioners to meet the ever-increasing expectations of politicians and the general public. They will also offer guidance to SME’s in winning public sector contracts through a range of training and networking opportunities.

Henry Needler – PricewaterhouseCoopers (PwC) Senior Consultant, is set to appear across both dates. In the North, audiences can hear his take on business intelligence systems:

“Generally with business intelligence, we’re trying to understand what the business is doing but also understand where the market is going and anticipate that and forecast it so that they can get the best possible deal in the marketplace. In terms of the alpha aspect, that’s focused on what local SMEs can do for big organisations going out and buying services so that money is invested back into the local economy.”

At the Southern event he will explain how procurement professionals can use and analyse data to make better decisions and optimise value for money for their organisations.

As a senior consultant at PwC, Henry’s role is to help clients implement procurement-led transformation within their organisations. Here he explains:

“It’s about how you can engage local markets best. It’s a case of understanding what that market can provide or what the suppliers can provide and about making sure you do whatever you can to engage a company and ultimately help them survive.”

Henry believes that Procurex Live is a good platform for businesses to learn about the procurement marketplace and how it is set to change:

“I think that it should help them understand where the market is going because consumer retail (you and I) is far more real time now. We can find a product and within a few seconds we can immediately compare prices, identify similar products and get some information so that, without a lot of effort, we can go into a traditional shop already very well informed.

Going forward, client organisations, councils, central government or manufacturers are going to be dealing with somebody in procurement who can immediately compare those prices so they end up in a more dynamic and fast-moving marketplace than the traditional local authority procurement that takes forever and has long-term monolithic deals.

The way forward is going to be smaller, shorter-term deals which are looking to exploit the innovation which the market is generating. That’s exciting for the SMEs as they can see what buyers want and what the customer wants and the larger organisations should also be in a good position to meet those demands.”

For details of Procurex Live and other professional events view our full listings

What is going on with the Swiss franc?

In a move that has hurt skiers, chocolate lovers and international investment banks alike, the Swiss National Bank (SNB) decided on January 15th to unpeg the country’s currency, the franc, from the euro.

Update – Since the time of writing the Swiss National Bank has signalled it will target a new exchange rate band, to find out more click here 

The repercussions of this decision have reverberated across the globe. Despite The Wall Street Journal reporting that J.P Morgan (an investment bank) stands to make up to $300 million USD as a result of the decision, the news for most financial agencies has been overwhelmingly bad.

Citigroup, suggested its losses will be in realms of $150 million USD and exchange agencies from New Zealand to New York City have hinted that troubled times and closures lay ahead after the unexpected currency shuffle.

Even English football has been impacted, with the jersey sponsor of West Ham United, Alpari UK (a foreign exchange dealer), filing for insolvency.

Currency changes and international finance have never been subjects I’ve been comfortably able to wrap my head around. So I have tried to tackle the unpegging of the franc from an entirely pragmatic point of view. What happened? Why did it happen? And what is the impact on procurement professionals?

Why was it pegged in the first place?

The Swiss government has traditionally been seen as a sound custodian of financial affairs, its stable government and balanced economy has seen business and investors flood the country with foreign cash. While this sounds like good news, the tide of foreign money drove up the value of the franc, which had a severe impact on the country’s significant export sector. Essentially, Swiss goods became expensive, too expensive.

In 2011, as European consumers remained dormant in wake of the credit crunch, the Swiss National Bank made a perhaps short-sighted decision to peg the value of the franc to that of euro, thus making Swiss goods more affordable across the continent.

Why did they unpeg it?

A number of different theories have been banded about as to why the bank elected to unpeg the franc – some of the more popular are listed below:

  • The SNB held fears that the consistent devaluation of the euro (in recent months and years) would be detrimental to the Swiss economy. This uncertainty is supported by political instability in some of the Euro zones more debt-laden countries.
  • The SNB was pre-empting the European Central Bank’s decision to introduce another quantitative easing program and decided that the printing of money required to carry out this program would further weaken the euro.
  • The SNB was responding to public concerns that the enormous $480 billion USD of foreign currency the bank now holds (as a result of its euro pegging) could lead to higher inflation levels, or even hyper-inflation.

Potentially, the bank simply wanted to unmake a poor decision it made in 2011. As the Economist magazine suggests, “When central banks manipulate exchange rates, it almost always ends in tears”.

What should procurement teams do? 

Whether the euro pegging was a good idea or a bad idea is now irrelevant, what we are left with is a situation where the Swiss franc is worth significantly more than it was two weeks ago. The valuation of the franc is likely to fluctuate further in the coming weeks, but experts are predicting it will remain high against the euro and other currencies.

Below are some points procurement teams should consider addressing when determining how this currency shift will impact their operations:

  1. Understand the exposure of your supply base to the Swiss franc. If you have got strategic suppliers based in Switzerland, their products and services have just got significantly more expensive, perhaps its time to look for substitutes.
  2. Understand your company’s internal exposure to the Swiss franc. The secure economy and friendly tax rates in Switzerland encouraged many international businesses to set up their European operations in the country. As a way to reduce their exposure to the now expensive franc, these businesses (as well as many native Swiss firms) may now be looking to ‘internally restructure’ as our friends in HR like to say.
  3. Prepare for a more competitive outsourcing environment. Swiss companies (and international firms with a Swiss presence) could try to minimise the impact of the strengthening franc by leveraging lower cost destinations and start outsourcing more work.

How is the changing value of franc impacting you? Fill us in on your concerns in the comments below.

Super Bowl XLIX: did it pay off for the advertisers?

Feeling a bit tired this morning? You might be one of the estimated 4 million Brits who watched the Super Bowl last night? Don’t worry, no spoilers here for those who have recorded it!

If you did watch the game, or have been following the coverage over the last week, you will have heard almost as many stories about the adverts as you have about the game itself.

The NFL’s marquee event boasts an estimated 112 million viewers worldwide and, with breaks in play every few minutes and an extended half-time interval (complete, this year, with Katy Perry), the 30-60 second advertising slots are like gold dust.

What’s the big deal?

The size of the audience, profile of the game and the advertising tradition are just part of the attraction for big companies. Several studies have proven that 50 per cent of the Super Bowl audience tunes in just to watch the adverts.

Big names this year included Budweiser, Victoria’s Secret, Doritos and many more. From a marketing point of view, there isn’t another event anywhere in the world that gives companies an opportunity to get their brand into the public consciousness in the same way.

Conversations about adverts start weeks before the Super Bowl when the advertising line up is announced, and can last for weeks or months after, particularly if you nail the advert. Check out which adverts have gone down this year here.

Facts and Figures

  • $359 million – the estimated value of all the advertising for the Super Bowl this year.
  • $4.5 million – the cost for a 30-second advertisement at any time during the game. Divide it down and that’s an eye-watering $150,000 per second!
  • $42,000 – what the cost was during the first Super Bowl in 1967. Costs are increasing year on year at a massive rate.

And these costs are only for purchasing the slot from the network. Companies have to factor in creating the advert, with some going really overboard.

Does it pay off?

That’s the $4.5m question and the answer might be yes. In the coming weeks, the best adverts will be featured and shown in full on TV shows, blogged about, discussed and re-watched on YouTube. The PR value generated from this can quadruple the media cost for the advert.

In 2014, a survey of 37,440 U.S. consumers by the tech firm BrandAds found that the average Super Bowl ad increased viewers’ likelihood of buying the product by 6.6 per cent. Larger brands like Hyundai and Budweiser saw increases of 39.5 per cent and 37.8 per cent respectively.

Other companies have seen similar sales increases. Audi, with advertising slots during the Super Bowl since 2006, have doubled their market share, while Skechers (26 per cent) and Chrysler (54 per cent) have seen big increases in sales.

Worth the risk?

It’s still debatable even with figures like those above. There’s no guarantee that your advert will be a success and no guarantee you’ll see similar sales bumps.

But, even with that in mind, would you want to be the one name that wasn’t at the biggest party of the year?

The Super Bowl in Numbers

  • $10 million – the cost of the half-time show, paid for by the NFL. Artists aren’t paid but can expect considerable sales on the back of an appearance.
  • $58,780,000 – the sum total of the basic salaries of the highest paid players for the New England Patriots and Seattle Seahawks
  • $8 billion – the total gambled on the game (worth noting that in most states gambling is illegal)
  • 325 million gallons – the volume of beer drunk during the game
  • 1.23 billion – the number of chicken wings that were eaten in the US yesterday

Read on for more of the biggest stories commanding headlines right now:

Qatar Airways acquires $1.7 billion stake in IAG

  • As part of efforts to enhance operations and strengthen existing commercial ties initiated through codeshare agreements with IAG as well as its membership of the oneworld alliance, Qatar Airways has acquired a 9.99 per cent stake in IAG.
  • Non-EU shareholders of IAG including Qatar Airways are subject to an overall cap on non-EU ownership as a result of the requirement for EU airlines to be majority owned by EU shareholders. Qatar Airways may consider increasing its stake further over time although this is not currently intended to exceed 9.99 per cent.
  • Akbar Al Baker, Group Chief Executive of Qatar Airways, said: “IAG represents an excellent opportunity to further develop our Westwards strategy. Having joined the oneworld alliance, it makes sense for us to work more closely together in the near term and we look forward to forging a long-term relationship.”

Read more at Supply Chain Digital

Ex-Zomato CMO’s Yumist raises $1 million from Orios to deliver food efficiently

  • Yumist, a food delivery startup that started operations in Gurgaon in October 2014 has raised it’s first round of funding from Orios Venture PartnersYumist was founded by Alok Jain, a technology entrepreneur and ex-CMO at Zomato along with Abhimanyu Maheshwari, a seasoned F&B entrepreneur. to provide easy access to tasty and homely daily-meals.
  • A combination of food, logistics and tech, Yumist owns the entire delivery supply chain. It allows customers to place orders in a few seconds through it’s Android app and the meal is delivered hot in under 30 minutes.
  • The investment will be used by Yumist to grow it’s team, expand geographically and build it’s production, technology and delivery infrastructure.

Read more at YourStory

Walmart and Target move forward joint supply chain initiative

  • Walmart, Target and NGO Forum for the Future (FFTF) have set up three working groups to take forward actions agreed at last year’s beauty and personal care product sustainability summit. The groups will focus on aspects of chemicals in products, says Michelle Harvey of the Environmental Defense Fund, co-chair of two of them.
  • During the summit in September, priority chemicals and transparency emerged as one of the main issues to work on, according to an FFTF report. Delegates identified five areas for action. These included:
    • Making disclosure easier and more consistent, building trusted relationships along the supply chain and facilitating a willingness to share information.
    • Reaching alignment on the process of prioritising chemicals.
    • How to facilitate more research and development into alternative chemicals.
    • Exploring what stakeholders can do to contribute toward the industry’s sustainability efforts.
    • Engaging and educating consumers on the science behind priority chemicals in a way that is meaningful and accessible.

Read more at Chemical Watch

DWC unveils plans for aerospace supply chain facilities

  • Dubai World Central’s (DWC) Aviation District has announced the development of new aerospace supply chain facilities as part of its efforts in shaping a comprehensive ecosystem dedicated to the aviation industry.
  • Located at the DWC Aviation District – a 6.7 square kilometre master planned district adjacent to Al Maktoum International Airport – the development will include three facilities spread across an area of 45,000 square metres.
  • Estimated to cost $32.6m (AED 120 million), the project will feature a multi-purpose building for tenants that are a part of the aerospace supply chain and is scheduled for completion in Q1 2016.
  • Tahnoon Saif, vice president, Aviation District, commented: “This project marks the latest milestone in our journey to create value-added infrastructure for players across the aerospace supply chain spectrum.

Read more at Arabian Supply Chain

Packing for the future: big trends, digital print, sustainability

Stuart Kellock, Owner of Label Apeel shares his thoughts on digital print, the next big trends and whether being sustainable is still crucial for business.

What is next for digital print?

In labels and packaging the next step has got to be educating the end user, the marketeers and the brand owners about what is available to them.

Pumping the market with presses does nothing for the innovation being applied. For me, it will be those who can apply themselves to new and innovative applications that will be the winners. Those who are merely using digital presses to produce labels that could be done using conventional, will find that the unseen costs quickly catch up with them, and that the competition very quickly becomes a bit hot to justify the expenditure. We have already seen this model play out in the commercial sheet fed world with disastrous outcomes for some of the less innovative businesses.

Has personalised packaging had its day?

No, personalised packaging is here to stay. With any amount of luck we can all stop treating it as the be all and end all of what digital has to offer. Yes, coke and Absolute Vodka have done some smashing stuff with personalisation, but is it really innovative? I remember 12 years ago turning up to an event and being presented with a bottle of personalized beer. Personalisation is not innovative; the scale of the personalisation that these companies demonstrated was innovative. Digital has so much more to offer and it is only once we can get past personalization, will we start to develop and understand what that is.

Three big packaging trends and techniques for 2015?

I think that 2015 will see a return to fantastic photography being used in packaging. The last few years we have seen bold colour stamping the mark of brands, I think we could see a return of photographic imagery. The challenge for printers will be to get the consistent reproduction quality that is going to be demanded of the designers.

Digital moving in to wide web packaging is going to be something that will be great to watch for those of us not involved and a challenge for those in the market. A continuation of the drive for tactile finishes and added decoration will be how brands make themselves stand out from the crowds.

Is social media having an effect on the print industry?

Social media is having less effect directly on printers than it is having on our customers. This is particularly true of printers like us, who work with small batch exclusive brands. Prior to digital, these brands could not afford the labelling and packaging of the big boys. Now their packaging looks amazing, fresh and desirable. This in conjunction with far reaching social media as a sales tool means that smaller niche brands are having an impact on the market place.

It is no coincidence that we see large brewers launching their own craft breweries or the distillers doing short run exclusive lines. The little guys are having an impact and eroding the big boys market, they are being forced to respond. Social media is allowing this to happen.

Sustainability – is it still a crucial battleground or are brands less worried about their green credentials?

Brands were ever so worried about their green credentials while it was the printer and other suppliers picking up the tab. Then, came the financial downturn of 2008 and the focus was taken elsewhere.

We have seen a return to a concern for sustainability over the past two years and I think now that concern is far more effective. It comes from a real and pragmatic position, rather than a dictatorial (because the marketing bod says we have got to.) Printers now recognise that by reducing waste and by buying sustainably they are able to improve their own business while delivering the real change the planet needs.

We no longer have half-hearted conversations about recycled paper. Our conversations now are about reducing packaging, reducing waste, eliminating landfill and reducing energy consumption from a position that creates a win for all the stakeholders.

The benefits of social networking

Networking… It’s a maligned term that often sits alongside exercising and dieting as things that we know in our hearts we should do, but never seem to get around to. 

Guide to using social networking in the job hunt

Well, we’re here to tell you it needn’t be so. In this post we are going to point out some simple tips that will make your networking efforts more effective and less cringe-worthy.

We’re all in this together

It’s important to remember that on social media platforms and at face-to-face events, everyone is there for the same purpose… To network.

People don’t attend events with the intention of sitting silently in corner, not communicating or not learning. Similarly people don’t join Procurious or LinkedIn to avoid contact with other members.

So the next time you approach someone for networking purposes, remember they are coming from the same place as you. They want to network as well!

Ask for help

As US president Barack Obama once said:

“Asking for help isn’t a sign of weakness, it’s a sign of strength because it shows you have the courage to admit when you don’t know something, and that then allows you to learn something new.” 

Asking people for help should be an active part of your networking strategy as it actually solves two problems.

The first is clear; asking for help will enable you to find solutions to your problems. Not sure who the best procurement recruiter in New York City is? Ask someone! Trying to determine if a CIPS qualification is worth the investment? Ask someone!

The second benefit that comes from asking for help is less apparent but just as important. A study from the University of Wisconsin-Madison found that workers who help others, feel happier about their work than those who decide not to help.  By asking someone for help, you give them the opportunity to display their skills and knowledge and at the same time give their self-esteem a boost.

“Our findings make a simple but profound point about altruism: helping others makes us happier. Altruism is not a form of martyrdom, but operates for many as part of a healthy psychological reward system” – University of Wisconsin-Madison professor Donald Moynihan.

If the person asking the question wins and the person answering the question wins, what’s stopping us from asking more questions?

Now back on the Barrack Obama thread, the Economist magazine recently reported that during his time as a US Senator, Barrack Obama, a man who I think you’ll agree has amassed an impressive network over the years, asked more than one third of his fellow Senators for ‘help’.

Be targeted in your approach

No one likes spam. Not in their email accounts, not in their sandwiches and certainly not when they are networking.

When you are looking to connect with people, be genuine not generic.

If you have a particular person you want to meet at an event, it pays to take some time to research them and their interests. The background work you do will not only spark your targets interest but also help to break the ice.

When connecting with people on social media sites try to send personalised messages rather than the default settings of the platform. It doesn’t have to be much but “Hey, I noticed you also work in advertising procurement, lets connect” is infinitely better than “I’d like to add you to my LinkedIn network”.

Don’t ask for a job

It’s true that social platforms like Procurious and LinkedIn are effectively online CV repositories, and that these platforms are increasing being used by companies and recruiters to fill vacancies.

However, the direction of this flow should not be turned around. Job seekers should avoid directly soliciting for jobs or big-noting themselves to hiring managers through social media platforms or at networking events.

The key here is subtly; it’s OK to ask someone at an event for advice, an opinion or even to meet up for a drink after the conference. However, by asking for a job, you end up alienating yourself from the very person you’re trying to impress.

Keep going, it’s important

Whether it makes your toes curl or not, networking is important. People who network find better jobs more easily than those who don’t.

The Guardian newspaper recently reported that a staggering 90 per cent of UK employers use social media a means to find staff.

The importance of networking is magnified as you progress through your career. A large portion of senior positions are never formally advertised, with firms preferring to rely on references and people they ‘know’ to fill important roles. The question is will they ‘know’ you?

The importance of networking stretches beyond finding your next job. Networks can be a source of inspiration. They can provide you with information and insight you would have never otherwise encountered. Effective networking may help you find your next mentor, role model or god forbid even a friend!

So get out there and network!

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.

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.

Supply chain finance schemes: a worrying new trend?

Diageo under fire for increasing payment terms

The Forum of Private Business (FPB) has this week launched a scathing attack on beverage giant Diageo over its plans to extend supplier payment terms from 60 to 90 days in its UK business.

Diageo let suppliers know, via a formal letter, that the payment terms changes would come into effect as of February 1st 2015. The firm announced that the new terms make up part of a “different procurement process” the company plans to implement for future tenders.

Diageo justified the move by stating:

“Diageo continually looks for ways to enable us to invest in the growth of our great brands. This activity supports the long term sustainability of our business and yours.”

Speaking on Diageo’s move to extend payment terms, Phil Orford, the chief executive of The FPB said: 

“We are very concerned, but sadly unsurprised, to learn that Diageo is yet again extending its payment terms, a practice that is hugely damaging for small businesses.”

Countering criticisms that lengthening payment terms will be highly detrimental to small and medium size enterprises in the company’s supply chain; Diageo announced that it would offer supply chain finance programs to any businesses adversely impacted by the new terms.

Supply chain finance programs allow suppliers to access money they are owed more quickly by leveraging the favourable credit lines of larger buying organisation.

In response to this move Mr Orford claimed:

“The practice of big businesses using a supply chain finance scheme in order to extend payment terms and protect their own cash flow is a worrying trend that is spreading across sectors and industries.”

The FPB is now working with the Institute of Credit Management and Department of Business Innovation and Skills to have Diageo’s status as a signatory to the Prompt Payment Code revoked.

Why do we question, comment and discuss?

To answer this [question] we’re going to reflect on findings from a number of social network-specific research papers that have made themselves known to us.

Comaniciu Dan/Shutterstock.com

The Arma International Educational Foundation published its theories around ‘Social networks and their impact on records and information management’ in January 2011.

For clarity, records and information management will be shortened henceforth to RIM:

Arma said: “there is a value in the speed of distribution of questions and answers that can be seen on various Social Networks. RIM professionals who have questions can post them on Social Networks and within minutes—if not seconds—receive answers from other RIM professionals. For the individual, this removes the feeling that may exist of being all alone on the job. This type of Social Network where the topics are specific to RIM professionals creates a community of commonality.”

Now this could be written for any cross-selection of people, it needn’t be profession exclusive (as seen here applied to RIM professionals).

Similarly, a report put together by the European Commission in November 2010 said the following on human-powered community question answering and expert finding:

“Human powered (aka crowdsourcing) systems gave promising solutions to problems that were unsolved for years. The research community should continue working on leveraging human intelligence to solve critical problems and answer questions that otherwise would be impossible to answer automatically. Social networks contain immense knowledge through their users. However, it is not trivial to find the one that has the knowledge and is also available to share it.”

Just look towards the healthy ‘Discussions’ area on Procurious to see this thinking in action.

Discussions on Procurious

From here you are free to browse any open discussion topics, or create your own to pose to other Procurious members.

Start by filling in the ‘Ask a question or start a discussion’ field, then expand in the ‘Add more details’ area. This is the perfect place for any additional details,  or URLs you might want to share. Then you’ll need to select a topic/subtopic from the respective dropdown menus (this will help signpost your discussion to those members with similar interests).

Those dropdown menus will come in handy if you want to dip straight into discussions that touch on your specialty. Use the filters on the main Discussions page to show questions by topic/subtopic, or order by those latest/trending.

Alternatively you can get a heads-up (of the two most recent discussions at least) from the Community homepage. Can’t see it? It’s to the right of your Community Feed.

The European Commission report also touched on a topic it called ‘Personalisation for social interaction’, in which it explains as “In order to improve social interaction and enhance social inclusion, personalization engines that locate peers with possibly common likes, dislikes or developing trends should be engineered. Towards more efficient search engines that will be able to serve the users only with relevant content, personalisation algorithms have to be studied in a greater extent.”

Could we go as far to call Procurious a ‘personalization engine’?

We’re always keen to hear your thoughts so why not add to the discussion by leaving a comment below?