Procurement has continued to support public sector organisations in their savings targets leading into 2015. Leading up to the election, an increase in permanent and temporary positions in education and housing associations balanced the decrease in positions in council and central government.
Council spending has dropped by 32% since 2010 with housing reducing almost 10% in its budget, followed by planning and development down by 9.8. Several other services also experienced moderate spending cuts, including adult social care (2%), education (2.4%), cultural services (4.5%) and children’s social care (0.4%).
As the budget cuts continue to be implemented, a commercial approach is beginning to lead the procurement functions, gaining more value and return on investments. This shortage of commercially astute procurement professionals will continue to be a wider issue as organisations in the public sector begin to recognise their value.
Talent attraction and retention
The demand for high calibre commercial procurement professionals is rising as well as good solid operational procurement to lead projects cradle to grave. However, the salaries are not reflective of this need, remaining the same for the past five years. Employers are beginning to utilise other recruitment solutions from the contingent recruitment models with search and selection campaigns, we have seen a 33% increase in retained assignments over the course of 2015 which offers clients the opportunity to best position their organisation in what is currently a very aggressive market.
The main requirements for talent have mainly been around the following areas:
- Commercial procurement
- Operational procurement (leading OJEU projects)
- Generalist procurement
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.
More and more candidates are seeking to change career paths and become professional interims. There are risks with the uncertainty of securing a contract and individuals thinking of making this move need to consider what the right steps are to facilitate this.
The permanent market is buoyant with an increase in positions registered over the first half of 2015 (up 15% on the same period in 2014), however candidates are often missing what is being asked of them in a new position and the skills they have to offer. If candidates don’t seek to develop their own experience and skill set, the ceiling on salaries will remain.
Salaries remain the main challenge in order to attract the right calibre of candidates. Employers are beginning to recognise that they need to offer more to top candidates in order to attract them. As pressure continues within the public sector to deliver cost down programmes, organisations are continually looking at how then can retain and maximise the potential of their existing team whilst adding specific technical procurement professionals from the private sector.
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 Carl Walker, business manager at Michael Page Procurement & Supply Chain for a confidential discussion.
T: +44 113 388 9046