Indirect procurement – Public Sector August 2016 market update

Our Public Sector business has continued to show strong growth throughout the first half of 2016.
Organisations are continuing to look to the interim market for a number of reasons – for traditional reasons, such as maternity cover or project-based work, but also to provide senior-level cover whilst permanent roles are recruited. Meanwhile, the permanent market continues to show growth as businesses increasingly look to procurement as a way of improving cash flow and driving efficiency.

Procurement is in demand

Now more than ever there is a focus on public sector bodies to cut spend. With an increasing pressure on budgets, procurement is quickly becoming a central function to a number of public bodies. European Regulations mean that where public money is being spent, procurement departments have a very real mandate, with minimal maverick spend. Specialist knowledge such as familiarity with OJEU, NEC and JCT are valuable on the market place. However, we are also seeing public bodies looking to the private sector market to drive commercial behaviours and deliver the best possible value. This is key in the private sector where businesses have to be self-funding. 

Current Trends and tips for recruiting:

This year has so far seen an increased challenge on the ROI of procurement functions. Organisations continue to look for better margins, cash flow and efficiency while a constriction around the availability of high caliber candidates within the procurement field could be seen to delay growth. 
In the public sector, job flow is on the rise. Permanent hires are up 6% year on year and interim up a massive 15%. The biggest challenge, however, appears to be obtaining quality interim resource within the tight budgetary constraints. This is particularly true of the NHS, where Monitor Rate Caps effectively result in day rates being in pro-rata form from the equivalent permanent salary – thereby eliminating any financial or lifestyle benefits to being an interim in the NHS. The combination of this and an increase of 9% in average interim rate expectations, means the result could ultimately be a candidate shy market and a reduction in the overall seniority or caliber.
On the permanent side, the war for strong candidates is intensifying and in a world where the average recruitment process is taking between 4 – 5 months, candidates can become disengaged. The importance of bringing new ideas into a function cannot be underestimated or undervalued in the quest to advance a team, therefore, slick processes are absolutely critical. Also, salary bandings and strict recruitment guidelines can limit the talent available to an organisation. Our most recent Salary Comparison tool should highlight whether or not you are in the right vicinity to attract the top people.

Tips for Recruiting: 

  • The market has continued to be extremely candidate driven. Whether it be interim or permanent requirements that you are looking to resource, the key is to act quickly in all stages of the recruitment process.
  • Communication has to run both ways.  
  • Constructive feedback is crucial. Regardless of whether a decision is made to hire or not the reasoning behind it has to be explained to enable a candidate to take this forwards. 
  • As procurement candidates are in short supply; salary caps can be a real hindrance. In a field where candidates can have a direct impact on savings/budgets the right person could have an incredible effect on the organisation for years to come – is this worth missing out on?

Looking ahead

Planning and pace will be key for organisations to draw in the new talent they require to progress a team forwards while the reluctance to lose the skills already in house is evident; a continued 80% of candidates are being counter offered with more than 30% of those being accepted. 
The ever-evolving interim market will play a crucial role in this progression and support public sector procurement going forward.
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 Lewis Thompson at Michael Page Procurement & Supply Chain for a confidential discussion.