For this week’s opinion piece, I’m looking at a recent article from Procurious.
It comments on some data that was released by LinkedIn, showing that there are an increasing number of supply chain professionals and procurement managers who are quitting their jobs.
If I quote the article:
According to data released by LinkedIn to Bloomberg, in 2020-2021, the average number of supply chain managers who left their jobs, called the ‘separation rate’, increased by 28%. Chillingly, this figure was the highest it had ever been since LinkedIn started tracking data five years ago.
The title of the article is a little bit click-baity because, as we know, Procurement and Supply Chain are not synonyms. However, the pressures and some of the challenges that are being faced by both functions are indeed very similar.
Why are Supply Chain and Procurement Managers resigning?
I’m going to relate this back to how digital procurement technology and procurement software could help as a catalyst. How can tech reverse some of the attrition we have seen with experienced procurement practitioners quitting the profession?
The Procurious article goes on to suggest why it’s the case that supply chain professionals are quitting their jobs in record numbers. They cite three key reasons:
- Burnout
- Higher Salaries
- Outdated processes
Let’s examine each of them in a bit more detail…
1. Increasing instances of burnout
Burnout is obviously a factor in any stressful job. It can be a driver of why people leave their current roles and and move into other positions. While it doesn’t necessarily account for people leaving the the profession, it certainly ties in to reasons behind the more common concept of “The Great Resignation” which has occurred post-COVID.
If you were in an industry that was particularly hard hit by the pandemic or your role put you under a lot of pressure dealing with broken supply chains, I think that’s certainly a factor.
For example, if you worked in retail, hospitality or aviation, perhaps you may have taken heavy-handed government responses to COVID as a sign to move to a less vulnerable industry sector.
How can procurement technology help to cure burnout?
So, how is burnout relevant to what we’re doing on the digital side? Well, a lot of burnout comes down to an unreasonable workload that procurement professionals just can’t cope with. The feeling of overwhelm stems from having to deliver more results and perform a higher workload, often with fewer resources.
Many CPOs and Heads of Procurement have little idea how much time their team spends on firefighting operational issues. Executives are hiring more and more people to write policies and monitor governance, and fewer to actually deliver the actual work. As such, they are often ill-prepared to negotiate with the CFO or Chief People Officer when they push for headcount reductions or hiring freezes.
Ironic really, isn’t it?! I don’t know whether to laugh or despair.
That’s where procurement technology comes in. It can drive more automation and improve the quality of data. Both are the things that we bang on about a lot on The Procuretech Podcast.
Automation can help to cut down or eliminate a lot of the wasteful administrative tasks and rework that procurement managers always get dragged into. Better data – and better presentation of data – reduces the amount of number crunching that is necessary in Excel.
Both of these can be catalysts to help to reduce the risk of burnout. They free up some of the bandwidth that procurement managers need. Delivering the results that you’re actually employed to deliver don’t usually consider fixing P2P problems or chasing up late deliveries.
2. Are higher salaries driving more people to change jobs?
The second reason the article states is that higher salaries are driving people to leave their existing positions. Offers of better remuneration for performing the same or similar role elsewhere are convincing people to jump ship.
Especially with 10% inflation, if you’re feeling the pinch then even just a $5k pay rise can go a long way towards offsetting your increased cost of living.
Of course, it’s not all about the money.
Feeling valued as an employee can also be big driver behind what forces you to quit.
I guess the point is that people don’t typically quit their job for pay cut or when the market is depressed. They usually see the opportunity to improve their financial situation hand-in-hand with their job satisfaction.
How can procurement technology help reduce attrition?
A lot of the non-financial factors driving the decision to quit are often linked to the feeling of being engaged with your work. Again, if you’re performing a lot of operational, tactical, administrative work as an experienced procurement manager, then you’re probably going to be quite frustrated and disengaged.
Being forced to perform repetitive, mind-numbing tasks that could be automated can be a legitimate driver behind why people quit their jobs.
Speaking from personal experience, one of the major push factors that ultimately resulted in me leaving the corporate world was that I often felt like a very well paid admin assistant.
We didn’t have the technology within the organisation (a Fortune 500 company) to do a lot of work that could have been automated, or at least simplified. The result was that I felt overqualified to do a lot of what I spent my day doing.
Can investment in technology be a preventative measure to keep your best talent?
Absolutely.
Is it the only factor? Of course not!
3. Are archaic processes driving Procurement Managers away?
Finally, reason number 3 in the article is outdated processes. I personally feel this is the biggest one in terms of driving people away from the profession as a whole.
Procurement has lagged behind Sales, Finance and HR when it comes to IT investment. Simplification and automation of repetitive processes has come much later to our function. Add to this the grindstone of internal legal and audit teams, who have to justify their existence by resisting a slim-down of bloated processes.
Especially in large enterprise organisations, procurement processes can be very cumbersome.
If you’re quite an entrepreneurial person rather than a technocrat, then a lot of day to day process that we have to deal with as procurement managers can often feel very mundane, very paper-driven, and just, well, very time consuming.
Yes, I’m talking about travel request forms and payment term adjustments that have to be submitted and approved via email and Excel.
Just eliminate this red tape. It’s completely unnecessary. Give people the tools and the autonomy that they need to be able to do their jobs.
How can procurement technology reduce busywork?
Even for more advanced processes, they often could be simplified and slimmed down in many cases.
Some of the most common, archaic procurement processes can easily be simplified and automated include:
- Travel expenses: can be submitted through an app rather than Excel and email.
- PO and invoice approvals: can be done via a mobile app rather than in ERP
- Category strategies: can be executed using best-in-class software rather than fiddling around with graphs and text boxes in Power Point. (Who else hates Power Point?)
- Sensitivity analysis on commodity pricing: can be performed in spend analytics or cost modelling software
- Savings reporting (and finance approval): can be done via a cloud-based performance management system rather than an Excel sheet.
- And of course, RFPs can be done online too: as long as you have a tool that suppliers want to use and procurement pros don’t need weeks of training to get to grips with.
Can procurement technology enable businesses to retain talent?
All three of these reasons why procurement professionals decide to quit their jobs can, to a certain, be mitigated by driving more digitalisation within an organisation.
So, if these really are the main reason why procurement managers and supply chain professionals are quitting the profession or moving to other roles, then investing in the right technology, which is easy to implement, user friendly, and will be adopted by the majority of the organisation can be a very shrewd investment.
Not only can it free up a lot of white space and prevent burnout thanks to outdated processes and unnecessary administration. Technology can also help to reduce the number of FTEs that you have in your overall procurement organisation. And by doing this, it can also combat the salary issue. If you’re losing talent because you can’t compete on salary, then why not leverage automation to drive the need for fewer FTEs?
You can then you can spread that wage bill over a smaller number of people and ultimately pay them what they’re worth and retain your best people. These people will also be more motivated, knowing that a lot of unnecessary process is no longer waiting in their inbox.
