Procurement talent management: Exceptional outcomes require exceptional people Over the past decade, the people behind the relatively Amid all this activity, something is still missing. Other than vague label “procurement function” have collectively put the imperative to secure executive buy-in, the individuals billions of dollars into software, transformation programs, who perform these roles are rarely mentioned in these and third-party services. The goals of this spending have initiatives, instead being described generally as a team, unit been noble—improve efficiency and enhance capabilities or function. to support objectives such as better M&A outcomes, globally adaptable supply chains, regulatory compliance, Where does human capital—the talent—fit into a new and and brand and product stewardship. improved procurement area? By redefining the intersection of human capital and procurement, and recognizing that As procurement has worked toward these goals, it has individuals do the work, it’s possible for organizations to established a core savings foundation built on spending change the dynamic following a four-step process: visibility and awareness, first-wave sourcing opportunities • Plan and design a procurement talent structure such as better bidding, implementation of strategic • Attract and orient new talent sourcing processes, and compliance tracking. • Manage and develop the skills of existing talent • Retain talent Now, top-performing procurement functions are evolving into service providers to the business. They help enable Through this process, companies can identify and cultivate global capabilities and align with other enterprise areas exceptional people to drive both the procurement function in sourcing, savings, and risk management efforts. and the broader business to higher performance levels. They perform source-to-pay integration and manage commodity volatility and broader risk with systematic performance tracking. Procurement and talent: common challenges to meet business needs. The question is not so much The perception that talent identification and management how procurement gains a seat at the corporate leadership is more art than science continues to hang over talent table, but how to stay there. Permanently addressing decisions in some organizations. Human capital may talent gaps and maintaining a decision-making role require be seen as a weak link in achieving and improving knowing the business first, keeping up with rapid changes, business outcomes, with several factors contributing to and understanding how procurement fits within the this perception. overall organization. Who actually “does” procurement? What doesn’t work (at least in isolation)? Hint: it’s not just about the procurement department Procurement organizations often pursue various initiatives anymore. Procurement remains a far-flung, decentralized to strengthen talent management—create a center-led activity in some organizations, with business units procurement organization, develop specific reporting handling much of their own purchasing. The number structures, train and enhance skills, and enable category of procurement, supply chain, and accounts payable management. Launched as individual activities, these resources involved directly in purchasing can be multiplied initiatives can be hit or miss, wasting both time and by a factor of 10 to arrive at the actual number of resources. However, if they’re accompanied by efforts to people with a role in the process.1 Companies can find it foster a talent-centric culture, gain executive buy-in, and difficult to establish a talent management capability that secure needed funding, they can help produce lasting encompasses everyone. procurement impact. Looking for a seat at the top table Having examined the potential and the challenges of Business conditions and other requirements continually elevating procurement talent, we can explore the four-step change and expand the procurement skill sets needed for process of closing the gap between procurement needs businesses to thrive. These evolving expectations affect and human resources, beginning with planning and design how organizations approach securing the talent needed of the talent management function. Foolproof design Design Structure of the Workforce Organization organization and Planning Design workforce planning Attract Acquiring talent and Orientation & Employer Brand Talent Acquisition preparing them for Onboarding their new job Develop Competency Leadership Assessing and Learning Strategy & Career Experiences Modeling & Skills Development & improving existing Solutions & Mobility Assessment Succession talent Retain Keep employees with Performance Communications & Employee Rewards Diversity & Inclusion the company through Management Engagement various means For illustrative purposes only 1 Based on Deloitte client engagements and analysis. 2 Talent management is about figuring out what is • How should procurement be involved in talent strategically important and where people are needed. development and management in high-visibility Asking several questions can help determine what type of categories such as marketing and legal, which have talent an organization wants to foster: historically been managed by the business? • How well equipped is the procurement organization to More broadly, what is the purpose of developing work with stakeholders in their language and on their procurement talent? Ultimately, talent supports an level in areas such as finance, HR, IT, and, if applicable, organization’s overall mission. Some personnel will be manufacturing? nurtured and managed internally, while other resources will • What aspects of an eProcurement system should come from outside the business. procurement staff run? • Should procurement personnel manage commodity purchases such as office supplies? A focus on attracting rising stars Design Structure of the Workforce Organization organization and Planning Design workforce planning Attract Acquiring talent and Orientation & Employer Brand Talent Acquisition preparing them for Onboarding their new job Develop Competency Leadership Assessing and Learning Strategy & Career Experiences Modeling & Skills Development & improving existing Solutions & Mobility Assessment Succession talent Retain Keep employees with Performance Communications & Employee Rewards Diversity & Inclusion the company through Management Engagement various means For illustrative purposes only Leading procurement functions are aggressively recruiting Industry hot buttons can help attract strong internal strong leadership candidates from universities. Businesses and external talent. Industries such as technology are offering attractive compensation and touting the can draw people interested in a broad spectrum of multidisciplinary nature of working in procurement and value creation including innovation, external capacity supply chain. In consumer packaged goods, for example, building, sustainability, and sales and marketing support. sell-side category managers are often future business Procurement can become known as a leadership unit presidents and CEOs. Buy-side category managers proving ground. essentially run their own mega-category akin to an entire services business. 3 Managing and developing talent once you have it Design Structure of the Workforce Organization organization and Planning Design workforce planning Attract Acquiring talent and Orientation & Employer Brand Talent Acquisition preparing them for Onboarding their new job Develop Competency Leadership Assessing and Learning Strategy & Career Experiences Modeling & Skills Development & improving existing Solutions & Mobility Assessment Succession talent Retain Keep employees with Performance Communications & Employee Rewards Diversity & Inclusion the company through Management Engagement various means For illustrative purposes only A detailed needs assessment, diligent resume review and The importance of a good cultural match an extensive interview process have delivered a promising Managing procurement talent is about nature and nurture, hire. Now what? skills and disposition. Just as top salespeople may not make good sales managers, a strong negotiator may not fit well The next step is to enable and develop talent to succeed. as a supplier manager, internal relationship manager, or Many progressive procurement functions are hiring talent continuous improvement leader. Talent management can from internal stakeholder groups and top suppliers; help reduce such mismatches. For example, enterprise-level the specific skills these high performers possess can be talent processes such as behavioral assessments can help augmented with procurement-specific knowledge sharing identify procurement talent with important traits. and training. A cautionary note: it’s important for procurement talent Training is important to help instill knowledge areas across to possess soft skills and self-awareness. A procurement the wide array of procurement competencies. A “train leader from manufacturing may not be a good cultural fit and do” experiential approach can build confidence in in a financial services organization, and vice versa. procurement staff, while delivering self-funded benefits to the business. 4 Mentorship can make a difference • Tailoring the process: Adapting the talent management High-potential staff can become high performers process to your organization can help create ownership by learning both the mechanics and the art of the and buy-in. For example, Deloitte