Indirect procurement - private sector August 2015 market update

In the first half of 2015, growth across indirect procurement within the private sector has been extensive compared to the same period last year. Many organisations are continuing to invest resource in this area as saving opportunities within the indirect spend portfolios are being targeted. The current market is candidate-driven, with emphasis upon pace and process. This is particularly evident in the retail, financial services and logistics sectors where we have seen rapid growth in temporary staffing levels.

The spend areas that have continued to be most oversubscribed are IT and professional services. The demand we saw in 2014 across these specific areas has not waned and from market intelligence they will continue to be a major focus moving forward. 

The areas where we have seen the biggest growth in demand for candidates in 2015 are 

There has also been a shift in demand for specialised roles including specific contract management, energy-focused skill sets and supply chain management.

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. 

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.

There has been a noticeable increase in the occurrence of counter-offers being made to candidates. There is a risk that this culture can have a negative impact on the market as employees will feel that resignation or the threat of resignation is the only way in which they will be considered for a salary increase. It is strongly advised that employers implement retention plans to avoid this happening

As well as developing their career and improving their salaries, many candidates in procurement and supply chain are now looking for flexible working opportunities. Flexible working can often mean working one or two days from home and businesses willing to offer such opportunities are likely to widen their pool of good calibre candidates.

The market is set to continue growing and shows no sign of slowing down. Organisations will need to operate under fast paced processes. This includes businesses with internal recruitment teams, which will need to ensure quick turnaround from interview to offer stage, along with good offer management.

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