How do you recruit and retain top talent in procurement? You need to go beyond what’s possible for any one person and leverage the power of communities and technology.
If you ask a classroom of children what they want to be when they grow up, you may get answers like “astronaut,” “football player,” “doctor,” or “ballerina,” but it’s rare you’ll hear “procurement professional.”
Let’s face it, procurement and indirect sourcing are not exactly sexy areas, at least not from the eyes of an outsider. There are few people who know exactly how much value procurement generates for a business and want to invest further in the organisation.
From strategic sourcing and supplier risk management, to contract negotiations and risk mitigation, procurement plays an essential role in any large business.
Talent Shortages Threaten Procurement’s Function
Despite this incredibly important function that procurement fulfils, consultancy firm KPMG reports that the procurement talent shortage is real and only getting worse. Though it might be enlightening to dive into the question of why such a shortage exists, the reality is that it does and this is impacting businesses today.
Ultimately, we need to figure out how to work around it.
If hiring more procurement professionals is not an option, one obvious procurement strategy for growth is to scale your existing procurement team’s reach as much as possible given the limited resources. There are several ways to do this, from outsourcing work to procurement consulting firms to implementing supplier consolidation strategies.
As an example, Group Purchasing Organisations, also known as GPOs, are gaining popularity as a way to increase the impact of procurement without adding headcount.
GPOs Are Low-Cost, Low-Effort Alternatives to Adding Headcount
A GPO is an organisation built to leverage the purchasing power of several businesses to take advantage of high-volume discounts from suppliers. The idea being that utilising the collective buying power of its members creates benefits for both vendors who can grow their business and buying organisations that want to get better deals.
In consumer terms, this strategic buying is like purchasing at Costco or a similar bulk discount store.
GPOs are a great way to centralise procurement functions and scale the impact that procurement can create without the headache of reorganising departments within a company. They allow companies to prevent spend leakage, get better terms and discounting, and outsource the risk and time associated with contract negotiation, not to mention the time saved when employees no longer have to run RFPs for all good and services.
Members of GPOs report significant savings of up to 25, 30, or even 40 per cent of their previously best-negotiated pricing agreements.
Becoming a GPO Member May Even Help with Recruiting
An added bonus and secondary reason to add a GPO membership to your procurement solutions strategy is that it can help you attract new procurement talent. When potential candidates learn the business is a member, it tells them that cost savings, strategic buying, and risk management are high priorities for your business. A
t a bare minimum, this helps inspire confidence in the business because company leaders are prioritising ways to protect the company and better manage its spend.
It also tells a potential employee that when they come to work in your procurement organisation, they won’t be stuck in the dark ages hunting down RFPs or the latest version of a contract.
Ultimately, an investment in a GPO gives your business a competitive advantage over similar companies looking to hire that may not have considered procurement innovation a priority. And if procurement experts are in such short supply, this could be a serious leg-up.
The Future of Talent in Procurement Is Uncharted
Even if you don’t opt to go with a group purchasing organisation, there are several ways to make your procurement organisation more attractive to potential new recruits. Investing in new procurement technology, professional training initiatives, innovative recruitment marketing, and more are all ways you can up the business’ desirability as a career driver for future candidates.
That said, GPOs are a highly manageable and attractive way to both drive savings and efficiency in the short term while signalling to candidates in the longer term that procurement is a priority.
If you’re looking for an efficient and practical way to get the most out of every dollar while scaling your procurement organisation, a GPO is definitely worth a second look.