Procurement & Supply Chain

Direct purchasing and supply chain - market update

 
The FMCG sector is one of the few sectors with guaranteed growth in synergy with population increase. The internet's influence on FMCG is also growing, with one in three people buying online and self-collecting goods. This is projected to increase to 76% by 2017. The sheer size of the food, drink and pharmaceutical industry, which employs 400,000 people and makes up 16% of the UK’s manufacturing workforce, means it’s one of the few industries where growth and further product development is always expected. The UK Food and Drink Federation predict the industry will need 45,000 more workers by 2017. 
 
Sales and operations, and integrated business planning continues to be the hot topic in the FMCG world. Since the release of these processes, more and more non FMCG organisations are realising the benefit of ‘insight into demand’. The candidate pool for this experience is primarily in FMCG and pharmaceutical and this has caused a shortage of candidates and a sharp rise in salaries across the board in this field. At the lowest level demand planners’ salaries (outside of London) have risen from an average of c£26K in 2011 to c£32K in 2015 and this trend has affected the salary of every role from planner to VP of supply chain. 
 
The area with the lowest level of growth has been in generalist procurement. This is mainly due to companies favouring category management for the best results. More and more roles have a very specific requirement for market knowledge in fewer areas. 

Tips for employers recruiting in the current market:

  • Open up your industry requirement. If the candidate’s sector experience is necessary, ask yourself why and look for synergy in other sectors. Think if “a SKU is a SKU” does process remains the same? 
  • Before recruiting, factor in a relocation allowance and a budget for advertising.  Recruitment might seem expensive, but not as expensive as employing the wrong person.
  • Remember when interviewing this is a two way process. Top quality candidates are rare, if you like a candidate, act quickly. Sell the benefits of joining your business and give them a chance to have their questions answered. 
  • If you are unsure about a candidate, give constructive feedback and treat the candidate with respect as you may have to revisit them.     

Candidate trends in the current market 

 
The last 12 months has seen the performance and return on investment of procurement and supply chain functions continue to be challenged as businesses unrelentingly strive for better margins, cash flow and inventory efficiency. Additionally, there has been a further tightening around the availability of high calibre candidates within the procurement and supply chain field. 
 
While candidate flow and applications for roles are healthy (7% higher than at this point last year), the war for talent continues to heat up. Analysis of the market over the past 12 months has highlighted that almost four in five candidates who receive a job offer are subsequently counter offered by their existing employer. Information gathered from the market as a whole shows that two of these four candidates do not take up their new job offer and choose to stay where they are. Our own clients have seen a higher success rate of three in four accepting and starting in their new roles. While we play a major part in managing this risk on behalf of our clients, this ongoing trend serves to highlight the challenge of not only identifying and attracting the right talent but also having the right information, process and proposition to secure them. 
 
The main drivers for making career moves continue to be the ability to have an impact in the role, progression, financial reward and personal development. July 2015 saw the launch of our Salary Comparison tool which can help with managing the risk of losing talent based on salary. This online tool uses placement data to allow employers to benchmark the salaries they’re offering. 
 
As employers continue to evolve their structure, succession plan and progression opportunities, this data can hold valuable insight. For more tailored information in your local market, we would welcome a conversation. 

Salary comparison – gender pay gap

 
PageGroup recently ran an in-depth analysis into the gender pay gap at senior levels, presenting the results in an interactive graph. Among the occupations where at least 70% of jobs are held by men, managers and directors in manufacturing have the largest gender pay gap. Men in the top 20% of earners make £71,075 a year, whilst women make £56,396 – almost £15,000 less than men.
 
Based on this group analysis, we ran our own report for procurement and supply chain professionals. Throughout 2014 we saw that while the overall salaries clearly varied, the major common themes were that women within procurement and supply chain are currently paid less than their male counterparts by 13% which is greater than the average across all UK professions. We believe the pay gap will continue to close at an increasing rate due to competition for top specialist talent within the procurement and supply chain sector as well as a renewed focus on the anomaly by the current government. 

Looking ahead

 
As the market is set to continue growing with no sign of slowing down, organisations will need to be ready with fast recruitment processes. Businesses with internal recruitment teams will need to ensure they too have great turnarounds from interview to offer stage, along with good offer management. Brand protection is key in the current market; candidates expect a slick process and are often disengaged by slow processes. 
 
In response to current market conditions, it’s best to plan ahead. Get ahead of the competition by considering recruitment needs for the year ahead and engaging market specialists early so you’re able to engage the best talent. Benchmarking potential candidates will also help set expectations so when you do need to move quickly you already understand the market. 
 
Are you looking to take the next step in your procurement and supply chain career? Are you looking to hire talent? Or are you simply looking for some further advice in the current recruitment market? Feel free to contact Richard Krysiak, manager at Michael Page Procurement & Supply Chain for a confidential discussion. 
 
T: 07467000249