In yesterday’s PurchTips, I wrote about three procurement challenges in a hot economy. These three particular challenges were all externally-focused: supply availability, supplier service and quality, and upward price pressure.
But there are internal challenges in this environment, too.
The biggest internal challenge is acquiring and retaining procurement talent.
When an economy is hot – as evidenced by the uber-low unemployment rate cited in PurchTips – it can be hard to keep employees. Good employees are able to easily find more rewarding jobs.
So, you might lose good people. A normally bad thing. But, in this economic environment, it’s a doubly bad thing.
You see, losing a good employee in a colder economy (e.g., in 2009) didn’t sting quite as bad as losing a good employee today. Then, the US unemployment rate was around 10%. There were a lot of talented people looking for work at the time. They were happy to get a job that may have paid less than they historically made and/or work harder than they were used to working just because it was slim pickin’s in the job market. So, you could easily backfill a vacated position with an equally – perhaps even more – talented person.
But, in a hot economy like today’s, finding good employees looking for work – especially if your compensation package is less than competitive – can feel almost impossible.
I think there’s one key. If you are hiring for a procurement position, look for people on the rise. This may mean a smart administrative assistant or ambitious warehouse supervisor who wants to transition into a entry-level buyer role. Or it may mean a buyer who just earned the SPSM Certification who wants to advance to a purchasing management position.
In a hot economy, people generally don’t want to move to the same job, new place. They want to advance, particularly in the salary department. So, you need to either adjust how much you pay people or the profile of the person you think should fit the vacancy.
Procurement talent management in a hot economy is a challenge. But I think if you approach it the right way, things are more in your control than the aforementioned external challenges.