In a business environment driven by high customer expectations for speed and quality, increasing volatility and risk, and market interconnectedness, best-in-class sourcing and procurement is a significant competitive differentiator. But organizations are struggling to find skilled procurement professionals, especially for positions at the manager level or above. Universities and certification programs are working to close the talent gap, but organizations need to revamp their in-house development programs now to secure the next generation of procurement professionals.
In collaboration with the University of Tennessee and subject matter experts Kate Vitasek, Bonnie Keith, and Emmanuel Cambresy, APQC surveyed 205 procurement professionals and conducted focus groups and interviews with procurement professionals to identify the skills future procurement professionals need and evaluate organizations’ approaches to procurement talent development. The overall finding is that procurement talent development is not adequate and must be overhauled to prepare for the future.
APQC examined skills across four categories: job-specific skills distinct to the function, business skills relevant in and beyond procurement, social skills involved in collaboration and managing change, and deep work skills involved in cognitively demanding work. Overall, business, social, and deep work skills were rated as more important than job-specific skills. This reflects the need for procurement to build more collaborative relationships with suppliers and the business and make difficult judgement calls to mitigate risks to reputation and profitability.
The top five skills (none of which are job-specific) follow.
- Business ethics, which are essential not only to avoid bad behaviors such as bribery and bid rigging, but also for achieving corporate sustainability and social welfare goals.
- Communication (oral and written), which is required to understand the needs of the business, clarify expectations with suppliers, and maintain positive relationships with both.
- Stakeholder management, which is especially crucial as organizations shift up the sourcing continuum to more strategic sourcing business models.
- Relationship building and management is key, because personal relationships make the difference when the supply chain is disrupted.
- Critical thinking, which is necessary to turn numerous facts and figures around cash flow, usage data, pricing, forecasts, and market trends into strategic decisions on sourcing models and suppliers.
Most organizations’ procurement talent development programs are not aligned with the skills future professionals need most. APQC found a double-digit gap between importance and effectiveness for each of the top five skills. For example, almost 60 percent of survey respondents rated business ethics as critical, but only one-third said they were effectively developing this skill. Three of the top five skills are social skills (communication, stakeholder management, relationship building), and yet only 12 percent of organizations said their development programs emphasize social skills.
The consequences of not addressing the talent gap are huge. If organizations cannot develop these skills in-house, they will be forced to secure them through external hires and/or consultants, dramatically increasing the function’s costs. But the only other option is to not develop these skills—and that’s even more dangerous. When experienced procurement professionals retire, the function will be in the hands of people who never learned how to lead, think critically, or act ethically, and who have never built relationships with key suppliers and internal stakeholders.
Procurement leaders must work with HR, executives, professional associations, and certification programs to develop the next generation of procurement talent. In so doing, they should remember that the most in-demand skills—business ethics, communication, relationship building, and critical thinking—all take time to develop and are impossible to fully acquire without real-life, practical experience. Expect mentoring, job rotations, and other on-the-job learning approaches to play a major role in the future of procurement talent development.
For more details about this research, check out APQC's newly published report, Identifying and Developing the Future Skills Needed in Sourcing and Procurement. For an executive overview of the report, click here.