Procurement Talent Management: Recruiting, Training...

Procurement Talent Management: Recruiting, Training & Retaining A Modern & Awesome Buying Team

A whitepaper courtesy of the Next Level Purchasing Association 1


A resource courtesy of the Next Level Purchasing Association 1

Procurement Talent Management: Recruiting, Training & Retaining A Modern & Awesome Buying Team A resource by Charles Dominick, SPSM, SPSM2, SPSM3 of the Next Level Purchasing Association

Introduction As a procurement leader, you undoubtedly dream of having the ultimate “modern buying team.” However, the perfect team is not usually merely handed to you. It is something that needs to be built over time. But hopefully, not too much time, right? There are three aspects of procurement talent management that will lead you to having the “dream team” at some point in the future. Do a good job in these three aspects, and that point may be more in the immediate future rather than the distant future. Those three aspects are: recruiting, training and retention. In this whitepaper, we will explore all three of these aspects, including dissecting – and challenging – newer trends. The goal is to give you the guidance necessary to minimize the time and potential mistakes involved in transforming the team you have into the team you want. Are you ready to build the most awesome procurement team possible? Well, let’s get started with the first aspect, recruiting!



Procurement Recruiting Over the past few years, there has been a noticeable shift in how some organizations recruit procurement professionals to fill open positions. Maybe this shift is due to the perception that the new generation of millennials entering the workforce is different from preceding generations. Or maybe organizations simply feel that “if you do what you’ve always done, you’ll get what you always got” - and they haven’t been happy with what they’ve been getting. Regardless, it is undeniable that some organizations have changed the criteria for what defines “a good fit” for their open procurement positions. This has created two seemingly opposite approaches to recruiting procurement talent: the Traditional Approach and the Radical Approach. We’ll talk about advantages and disadvantages of each. And we’ll share some additional wisdom afterwards to help you determine the approach that is the best fit for your procurement organization.

The Traditional Approach To Recruiting For a long time, almost all procurement leaders tried to find candidates for open positions whose background most closely matched the description of the available job. The perfect candidate was described as someone who:

Had experience in the industry of the hiring company

Had procurement experience

Had experience buying the same products and services that he/she would be buying for the hiring company

Even though we refer to this as the “Traditional Approach,” that is not to suggest that it is outdated or has no applicability in the modern world. It simply was an approach from which few hiring managers deviated years ago, unlike today when more than just one approach is common. Also, it can still work quite effectively.

Advantages of the Traditional Approach to Recruiting There are many advantages of candidates who are recruited using the Traditional Approach. These include:



Loyalty to the Industry. When a candidate jumps from one employer to another in the same industry, there is often something that the candidate loves about that industry. This sense of loyalty can result in better retention. If they could get any job in the world that they wanted and they chose a new employer in the same industry as their last employer, there is a chance that they will want to remain in that industry for life. This means that, to retain that employee, your organization doesn’t have to be the most attractive employer in the world, just the most attractive employer in the industry – a much smaller subset of all of the companies out there. Less Risk of Mistake. The complexity and many nuances of procurement make it a profession ripe for making mistakes. Whether that’s signing a contract with onerous terms or not exploring deeply enough in negotiations or failing to communicate a due date for a critical material, there is no shortage of landmines that can result in a procurement professional’s work doing harm to his or her employer. If a candidate has been in procurement for a number of years, that candidate has likely learned – either through training, mentoring or “the hard way” – how to avoid causing procurement-driven disasters. Shorter Time To Independence. Some things are easy to learn to buy. Office supplies, desktop computer equipment, and certain commodities don’t exactly require degrees in Engineering in order for one to be qualified to place a purchase order. However, some categories of goods and services do require an intimate knowledge of the details that influence technical acceptability, quality, and supplier synergy. For that latter group of categories, the learning curve can be steep. Having someone who has already learned the in’s and out’s of a category can shave off a tremendous amount of time between hire date and the time that he or she is able to function fully independently and effectively. And functioning independently is a prerequisite for value realization.

Disadvantages of the Traditional Approach to Recruiting Despite all of the sense that recruiting procurement talent via the Traditional Approach makes, it is not without its downsides. Specifically, these are some disadvantages of the Traditional Approach:

Lack of Infusion of New Ideas. If a candidate had the exact same job as the one for which he or she is being hired – especially if he or she is replacing an incumbent who did that job fairly well – that procurement role will probably not see a drastically positive transformation. Think about old ideas that were given new application – the drive-thru pharmacy, the vending machine for consumer electronics – these are ideas that crossed from a familiar industry into an unfamiliar industry. Often times, the biggest breakthroughs don’t come from ideas that are unique in every conceivable way. They come from ideas that worked in one application and were adapted to a new one. If you hire someone whose experience exactly matches the job they are to do, there may not be many “a ha” moments that lead to profitable innovations. Built-In Mental Limitations. I once read that circus elephants are tethered until they stop trying to escape. Once they give up on trying, the tether is removed. Yet, the elephant doesn’t try to escape. It simply assumes that it cannot go anywhere based on what it experienced in the past. Hiring someone whose past experience exactly matches job expectations may similarly result in an employee never trying something that hasn’t been tried before. This mental block can prevent new ideas from challenging the way things were always done, even if that way was inefficient, unnecessarily risky, and/or unethical.



Confidence Can Conflict With Culture. If a procurement professional is hired for a job that, on paper, matches his or her last job, that individual is likely to be expecting a sense of continuity. He or she will likely think that their actions, behavior, and the like can be exactly like they were at his or her last employer. However, though job descriptions can be similar between companies, the cultures may be insanely different. Interpersonal communication styles that were par for the course at the old employer may be in conflict with the culture of the new organization. Someone that has elected to stay in the same industry, in the same role, buying the same categories may be someone that is reluctant to change. As such, there may be a great deal of friction between that person and those who contribute to a vastly different culture in the new environment. And friction between a new procurement employee and his or her peers, management, and/or internal customers can often be the kiss of death for that procurement employee.

The Radical Approach to Recruiting Though finding a candidate whose past matches the job you foresee for them for the present and future at first seems to make a lot of sense, you can see that there are disadvantages. As such, a new approach to procurement recruiting has become more common. In this approach, three different characteristics define the perfect candidate, who has:

A personality that fits the corporate culture

Influential charisma

Intellectual potential

What makes this approach “radical,” relatively speaking, is that the hiring managers who use it are not bothered at all if a candidate does not have any experience with purchasing the category for which they will be responsible, or in the industry, or in procurement at all! These hiring managers feel that procurement practices can be taught to an intelligent person. But a personality that matches the corporate culture and charisma that can influence resistant internal customers are things that someone is either born with or simply doesn’t have at all and can’t easily be taught!

Advantages of the Radical Approach to Recruiting Procurement has evolved. Once a home to tactical order processing work, then a professional center of excellence for supplier interaction, it is now a multi-faceted hub for facilitating internal-external synergies between company stakeholders and the supply base. As such, human interaction has become much more of a focus of the profession. That is why the Radical Approach to recruiting has advantages such as:

Support for Procurement’s Increased Involvement. “Early purchasing involvement.” “Procurement wants a seat at the table.” “Eliminate the walls between procurement and internal



customers.” These are all phrases that represent the long-pursued effort to improve the perception of procurement from “red tapers and rubber stampers” to strategic business partners. All of the technical knowledge in the world won’t inspire stakeholders and management to change the way they’ve always interacted with procurement staff if they don’t like and trust the people that comprise the procurement team. When the procurement department is staffed with professionals who are part of the culture and who can inspire followers, the procurement function can get the cooperation necessary to fully leverage the technical capabilities it brings to the party. Bandwidth For More Advanced Technical Skills. What constitutes a full range of procurement skills is a moving target. Those skill sets that qualified someone as a “strategic” procurement professional in 1999 look a whole lot like the skill sets that are on the job description for a tactical procurement position today. Just because someone mastered one of the timeless procurement skills, like negotiation, doesn’t mean that they have the intellectual horsepower to be an expert in areas now inseparable from procurement work, such as financial acumen. Hiring an employee who has lots of intellectual potential ensures that they will be capable of learning all of the nuanced aspects of modern procurement and those that will emerge in post-modern procurement.

Disadvantages of the Radical Approach to Recruitment Though one might have been surprised at the latent disadvantages to the Traditional Approach to recruitment, it is probably not a shock that the Radical Approach has its downsides as well. These include:

High Risk of Mistake. As previously intimated, procurement can feel like a jungle full of pitfalls with all of the things that can go wrong. Ignoring the benefits of solid knowledge of core procurement principles when hiring a candidate can result in that candidate falling headlong into disasters. Possibly multiple times. Especially when put into roles where independence is expected at the outset and handholding is non-existent. Procurement requires a certain mindset. It can be developed over time. But one has to ask if the organization – or the candidate – has the patience for that mindset to be formed just because an employee is “liked.” Chance That The Employee Won’t Even Like Procurement. No matter how far the profession has come, procurement still isn’t the sexiest job someone can dream of. If someone has never done procurement before, it may sound cool. But whether they have the passion to stick with it long enough to be a master of the craft is anything but certain. You may like the new employee. Internal customers may like him. But procurement may not be his bag, baby. And, if that’s the case, he may be gone before the ink dries on the contract from his first sourcing initiative.

The Recruiting Approaches Aren’t Mutually Exclusive Despite the fact that a lot of favorable attention has recently been given to the “Radical Approach” to recruiting, I’d like to take a step back. It is important to realize that the criteria for the “Traditional Approach” and the “Radical Approach” are not mutually exclusive. Is it possible for a candidate to be both seasoned in procurement and a good cultural fit? Absolutely!



So, the dichotomy that has arisen in the media and at networking events really isn’t necessary. Perhaps it will prove impossible to find someone who has both a perfect procurement track record and a personality that will be adored by stakeholders and management. But shouldn’t that at least be the target? I say shoot for the stars! If you have to settle for less, choose the candidate with the best combination of characteristics from both approaches, keeping in mind which gaps can be closed through procurement training and which can’t.

Procurement Training Now, once you’ve completed constructing your procurement team via recruiting, it is essential to think about training. One nagging myth that has unnecessarily limited the effectiveness of procurement departments is that training is for new buyers only. False! While someone may only need to be trained on how to create a purchase order for a day or two at the beginning of his or her tenure, we have already discussed how procurement is ever evolving. Procurement is no longer a tactical job where you learn a process once, then repeat it in perpetuity. That means that procurement training is something that is never complete! It is an ongoing journey. Consider a procurement “professional” who received his last bit of formal training in 1998 (and, yes, there are people out there that fit this description, unfortunately!). That person wouldn’t fully know the efficiencies and values that technologies like eSourcing, mobile procure-to-pay, or optimization bring to modern procurement. Consider a procurement “professional” who received her last bit of formal training in 2007. Don’t think much has changed? That person probably never learned the details of supply chain social responsibility (SCSR). SCSR may be the most critical component of modern procurement. SCSR implemented properly has become one of the most valuable components of many large organizations’ brands. SCSR implemented improperly (or not at all) has resulted in many organizations being featured in negative news headlines. Anyone not brought up to speed on current SCSR practices is underserving their employer. And SCSR is just one of many “new” procurement best practices that should be top of mind for any procurement professional entrusted with delivering value to his or her employer. The bottom line is that you should have a procurement training plan lined up for each member of your team. The Next Level Purchasing Association contends that the Holy Grail of skills that every procurement professional should aspire to master is the Strategic Procurement & Supply Management Body of Knowledge®, or SPSM-BOK® for short. The SPSM-BOK® is a collection of authoritative educational materials and documented best practices. Together, these materials represent the core skills and knowledge, referred to as competencies, required within the procurement profession. This collection is



designed to help procurement professionals to overcome the majority of challenges they face and to succeed in practically all aspects of their work. The SPSM-BOK® is divided into four levels. Those levels, which increase in complexity, are each comprised of 4-6 competencies. The levels and their descriptions are as follows:

Level 1: Essential Procurement Skills

Level 2: Global Procurement Management

Level 3: Enterprise-Wide Procurement Influence

Level 4: External Procurement Influence The SPSM-BOK® levels and competencies are illustrated in the following SPSM-BOK® Mastery Model:

The SPSM-BOK® Mastery Model should be used to plan the competencies to be developed by each procurement professional in the organization. In planning the professional development of procurement subordinates, the SPSM-BOK® Mastery Model serves as a guide for procurement competencies to develop, the order in which such competencies should be developed, and a competency-based organizational hierarchy. From 15 years of experience training procurement professionals, the NLPA believes that anyone holding a professional procurement position should have a mastery of SPSM-BOK® Level 1 at a minimum. As a procurement professional accepts more complex responsibilities or rises to more senior managerial positions, the criticality of mastering Levels 2 through 4 increases. The timeframe for mastery of the entire SPSM-BOK® is flexible and can range from several months to several years. This allows for organizations to incorporate professional development plans into each subordinate’s workload without detriment to current responsibilities.



But, regardless of whether you use the SPSM-BOK® Mastery Model or you develop your own checklist of desired skills for your team members, the important principles are to:

Know the skills needed for each incoming procurement employee, right off the bat

Know the skills needed for each level of procurement employee in the organization

Identify the gaps between the skills needed at each level and the skills possessed by incumbents in those levels

Plan the training for each individual in the procurement organization – remember, procurement training is something that should be continuous

Regularly assess new skill requirements as procurement continues to evolve

Procurement Retention You’ve hired the “right” people. You’ve trained them to meet the demands of a profession that is constantly increasing in complexity. Now, you have to keep them so that you don’t continually find yourself at the first step of the talent management process. Recruiting employees – with all the resume reading, interviewing, and risk of hiring the wrong candidate –is something that hiring managers want to do as little as possible. When it comes to staffing their teams, hiring managers want to “set it and forget it.” When hiring managers ask the classic job interview question – “Where do you see yourself in five years?” – many secretly hope for an answer like “In the very same job that you are hiring me for, performing way past expectations, without any desire to be paid more or move to another position, ever.” It’s rare to find someone who will answer that question that way. But the value of organizational stability cannot be overstated. So how do you keep these carefully selected, expertly trained employees from leaving for the proverbial greener pastures? The first thing that comes to mind is to pay them so much that they could never find another job that would pay them so much. While competitive pay is certainly essential, most people will sacrifice a little bit of pay for a job in which they are happy. And as a procurement leader, you may be able to have more influence over their happiness than you have over where their paycheck can max out per corporate policy. Here are some retention techniques.

A Compatible Culture. We talked about aiming for a cultural match when recruiting. If cultural compatibility was considered when recruiting employees, you will have an easier time retaining them. People gravitate to places where they feel they fit. If they already fit, that makes your life easier. If not, you have to assess whether the lack of fit is with just one employee or many. If many, then a change to the culture may be necessary. A leader’s leadership style can influence the culture of a department perhaps more than anything. It can actually override the overall corporate culture for that department. And, if it does and you’re the leader, it may actually be your position that may be vacated.



Job Rotation. Employees often leave jobs due to the feeling that they are “going nowhere.” Most assume that “going somewhere” equates to giving an employee a higher-level position and a pay increase. But more money isn’t always necessary to obliterate the feeling of stagnation. A job rotation program where employees swap jobs every six months or so can be an effective retention tool. And one can be particularly effective in procurement. For while buying office supplies is a totally different animal than buying outsourced manufacturing services, there are many commonalities, too: Negotiating techniques, contract templates, stakeholder communication plans, etc. In addition to the benefit to the employees, the organization benefits by having a cross-trained team that doesn’t have an over-dependence on any single employee. The procurement organization can be agile and can quickly adapt to any changes in staffing. A Balanced Management Style. There’s a saying that “employees don’t quit companies, they quit bosses.” And that is probably true in a lot of cases. And perhaps the #1 characteristic of a “quittable” boss is a style that relies heavily on micromanagement. I don’t want to say “never micromanage,” because some situations may call for it. But use that type of style very sparingly. Don’t swing the pendulum too far to the opposite direction either by not involving yourself at all in an employee’s work. While that may feel empowering to the employee in some cases, in other cases, it can make the employee feel abandoned. As a leader, it is your job to coach employees and help them develop. So, find a balanced style that neither micromanages nor abandons your employees. Doing so will make you less “quittable.” Helping Employees Reach Their Potential. While the last point addressed what not to do, I hope that you aspire to be something greater than a “not very quittable” procurement leader. I hope that you strive to inspire your talent and be the best boss that they ever had. This type of leader does more than set goals and measure progress. This type of leader helps employees reach those goals by imparting the wisdom and the coaching that enables employees to be the best procurement professionals they can be. You’ve probably gotten to a leadership position by learning some effective approaches along the way. What you learned should help your employees achieve the same or better results, faster. Just because you learned some things “the hard way” doesn’t mean that your employees should. After all, your success – as measured by your manager – is defined by how successful your team and all of its members are. Praise. This is the simplest – and perhaps most effective – technique for enhancing retention. Yet, it doesn’t get used nearly enough. Praise your people for jobs well done. Think a 30-year procurement veteran doesn’t like to be told “good job?” Wrong! Think an “attaboy” won’t mean much to a hot-shot, fresh-out-of-grad-school millennial? Wrong! Think completing a project on time and with better-than-expected financial results is reward enough for a previously-struggling subordinate? Wrong! The average procurement professional would love to say “My boss told me I did a great job” when his or her spouse asks “How was work today?” It may be the best part of the workday in the sometimes thankless profession that procurement is. It costs nothing and barely involves any effort. But periodic positive feedback may add up and make a big difference in an employee’s decision to stay put versus find a new place of employment.



Conclusion Procurement talent management involves three tasks: recruiting, training, and retaining employees. Though you may lean towards either the “Traditional Approach” or the “Radical Approach” to recruiting talent, aim for candidates who have the best of both worlds. Don’t prematurely rule out finding someone who has demonstrated real-life procurement proficiency and a personality that will mesh with your corporate culture. After hiring procurement employees, you should onboard them into an existing training plan. This plan will supply them with all of the knowledge they need to hit the ground running. Your procurement training plan should also map out all the skills all employees need and how you plan to fill any gaps that exist. It is expensive – both in terms of money and resources – to hire the perfect person and to train them to be the expert you need them to be. The last thing you want for that investment is for them to leave too soon. Therefore, it is critical to put thought and effort – and possibly money - into employee retention. Many things can influence employees to stay: a good culture, job rotation, a likeable boss, praise, and more. A combination of these things can only help to strengthen your retention. Get good employees. Make them better. Keep them forever. That is what procurement talent management is all about. I hope that this whitepaper has given you the insights necessary to improve how you handle all three of these activities. Best of luck!

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