Retaining Top Spend Management Talent
In this series of posts on four strategies for winning the war for top spend management talent, I’ve discussed the importance of getting more out of your current high level people, how to rewrite your job descriptions to attract top the best candidates, and how to shift your criteria to open yourself up to a wider talent pool. The final piece is making sure you retain the people that you bring in.
With so many companies automating transactional procurement and moving in the direction of strategic spend management, the competition for talent has become fierce. It seems like everyone is out there putting the moves each other’s talent, so you better have a retention strategy so that your people are approachable, but not poachable.
We all know that those that people who leave don’t just leave for money. They are likely unhappy. They're not just getting poached to the more exciting company. If they were happy, challenged, and felt they had good career prospects at your company, they would have stayed.
So, how do you make sure people in spend management feel good about their jobs, feel challenged, and that their career is on track? It’s all about respect, for the profession, and the person.
Indirect procurement historically has not been well-respected within companies, and it was often seen as a dead-end job. Procurement people were seen as the people who said no, bureaucrats focused on enforcing the rules at the expense of getting things done. People would joke that you go to indirect procurement to retire. Is it any wonder people didn't feel great about their jobs?
We are used to looking at savings as the main success metric for procurement, but we need a balanced scorecard that considers how the function is seen by the rest of the organization. How well is your organization respected? If it is not well respected, why is that?
Many times, it’s because the organization is drowning in tactical, transactional work and can’t proactively partner with the business. You never can get into value added work if you're chasing paper POs around the company. You need to shift your focus to strategic sourcing. You have to deliver value so the company feels good about the organization and what it does, and therefore your people feel good about the organization that they're in.
Leading companies have been able to accomplish this by automating the repetitive clerical tasks. They’ve largely turned compliance over to software, getting themselves out of the policing role. They’ve gotten indirect procurement the respect that they deserved by quantifying the value that they could deliver. They partnered with the business to deliver better suppliers, at lower cost, with better quality, to help the business reach its goals. That raises the credibility, and the morale of the whole organization.
A Path to the Top
Of course, people can feel good about the organization they're in, but not feel good about what they do. That's where managerial skills come in. Everyone in the organization should be clear on their goals and objectives, and what their development plan is. Managers need to make sure their people are doing work that they feel is stretching them, and they're being developed in different ways on the job, and in formal learning programs to grow their skills.
Finally, they need to see a clear path to career progression. In a transactional procurement organization, the execution of a purchase order and a contract with a supplier was about the limit of what you could do. In a more value-added organization, you can start to establish a career progression in indirect procurement.
Entry level people just out of college can learn the ropes of working with suppliers and negotiating. The next stop could be an associate sourcing manager role, as a transition for talented people to get into more of the business strategy work. From there, they can progress into sourcing manager, and then senior sourcing manager.
At the director level, they start to control a significant fraction of the company’s spending. At senior director they might be controlling up to 20 to 30 percent of the spending of the entire company, or even a larger percentage in one category area. Beyond that, they might become vice president of the organization, or even Chief Procurement Officer.
If you can put that career progression in front of them, written down of course, then no matter where they are entering in that progression, they can see that there's a documented way to go up that ladder, and the skills they need to develop to climb it. They can see that you care about them, and that their work has value to the company.
If you can do that, and you can maximize your current talent, and attract the best new talent, you will be well on your way to winning the war for top talent, and to building the spend management organization of the future.