A much improved market for permanent roles

A more stable interim market than 2009

The return of the “battle for procurement talent”

Restraint on salary increases

The apparent recovery in certain key sectors e.g. banking & FMCG

The growing demand for leading edge SRM experience

 Now three months later with the election behind us and fresh concerns expressed in the media about the economic recovery, we look at how the market conditions are affecting procurement professionals and their careers:

The improved market conditions for permanent procurement roles that we observed in March have continued and strengthened to a degree during this period.  Demand remains strongest in the middle market (£40-£80k) although there is little evidence of much movement at the most senior end of the scale. It remains to be seen when there will be real movement in the Director of Procurement / CPO market, but with so little activity at that level over the last two years we expect the big roles to be fiercely contested when they do become available, possibly later this year.

 The overall picture across all professions is stronger, with a leading research organisation reporting in May that demand for staff increased for the eighth month in succession, whilst the availability of candidates for permanent roles is down for the first time in two years.

Last quarter we observed some restraint on remuneration increases including bonuses, pay reviews and the increases in salary people seek to negotiate when moving companies.  This remains the case and in the current economic climate we would expect that to continue but there are organisations that are already having difficulty attracting the talent they need because of an inability to pay “market rate” and it will be interesting to see how this situation develops later this year.   

The interim market is currently in a relatively stable condition compared to 2009, but as we publish this report the real effects of the public sector cuts proposed by the new government are yet to be truly felt. There is a very strong suspicion with some early evidence to support it that spending on interim staff will be reduced, and this will be terrible news for the interim market as so many experienced procurement professionals have enjoyed some very lucrative contracts in the recent past on a variety of public sector projects.

Our fear is that the market will be flooded with contractors from the public sector over the next quarter, many of whom will be coming into a private sector interim market that has seen a substantial correction in day rates and margins over the last 18 months. This will lead to excess supply, causing further pressure on day rates and may prompt many career interim managers to consider going back into permanent roles. The early signs are there, and we have had many enquiries already from people concerned about whether their contracts will be extended or even terminated early so we will be watching this part of the market closely.

Most public sector senior managers that we asked for their thoughts on the subject were understandably reluctant to make any comment on the impact of the cuts at this stage, but one said “all recruitment, including approved vacancies, is frozen, and now has to be approved at a level which will inhibit us from even making the request!” We will be monitoring this situation closely and will comment on the impact this is having on procurement in our Q3 update.

In some of the key private sector industries the story is more positive with evidence that banking, retail, FMCG and leisure have continued the encouraging trends we observed last quarter. Furthermore both the technology and consulting sectors which we expressed concern about in our last report are now recruiting more in procurement and we believe this is a very encouraging sign.

Our focus on the SRM world as a result of our research and the growing evidence of a clear trend towards greater emphasis in vendor relations is proving to be very interesting.  As our reputation grows as a specialist recruiter for the discipline, we are engaging with more organisations and leading professionals than ever before and we expect to see more evidence of greater emphasis in this area in the second half of the year.  We remain particularly keen to speak to as many professionals with involvement in the area as possible. For more information please visit: http://www.edburydaley.com/supplier-relationship-management/ or join our network at http://uk.linkedin.com/in/edburydaleyandrew

There has been some further analysis of Supplier Relationship Management (SRM) trends undertaken by our research partners 105 Consulting which is available below.  The findings highlight that whilst SRM is now considered critical to many businesses, it seems value is being ‘left on the table’ through insufficient focus, installation and application of SRM capabilities and practice. To access the report click here: http://www.105consulting.com/main/images/stories/pdfs/srm-practitioner-survey.pdf

Future research projects:

We intend to announce the subject for our next online survey and research report at the end of July and will be inviting you all to contribute later in the summer and autumn.  Our previous reports are available here:

The growing importance of SRM: http://www.edburydaley.com/wp/wp-content/uploads/2010/02/EdburyDaley-SRM-jan-2010.pdf

The impact of the recession on procurement: http://edburydaley.com/wp/wp-content/uploads/2009/04/edbury-daley-the-impact-of-the-current-economic-climate.pdf

 The final quarter of last year saw a noticeable improvement in the market conditions for procurement professionals after a period of uncertainty created by the credit crunch.  The early signs this year are that this should continue and we believe the following factors have contributed:

• Improvement in a number of key economic indicators leading to better confidence in the economy
• Procurement’s unique ability to make a case to overcome “hiring freezes” in major organisations
• Greater urgency from clients to make appointments, especially where previous restrictions have applied
• Use it or lose it – a desire to spend budget before the end of the financial year
• A willingness to “get on with it” after a period of uncertainty
• Greater demands from senior management on procurement to deliver results  

The interim market also improved after a quiet summer with less availability of candidates than the first half of the year, although there remains some pressure on both contractors pay and recruiters margins.  The recovery in the interim market is due to:

• The need for additional resource when permanent head count is restricted
• The flexibility interim managers offer in uncertain market conditions
• The success many organisations have had in “squeezing” interim costs

At EdburyDaley we have been particularly active in the recruitment of senior category roles, head’s of function, vendor management/SRM and several international leadership appointments on both an interim and permanent basis during this time. If you have a key role in your team that needs a high calibre candidate then please talk to Andrew Daley, Charlie Bolam or Hannah Jackson.  Contact details here: http://www.edburydaley.com/contact2/

News

The latest EdburyDaley research project into The Importance of Supplier Relationship Management will be published next week.  With analysis from the Director’s of 105 Consulting we are confident that it’s the best survey we’ve produced yet. There are some fascinating comments on the subject and significant evidence that the standard of SRM capability can be improved upon in several different ways.

To register to receive a copy of the survey results, please e mail info@edburydaley.com

What is clear is that specialists in Supplier Relationship Management and/or Vendor Management arena are aware of the key issues we have raised.

Some of the positive comments include:

From an interim SRM specialist: I have just finished reading the report and wanted to congratulate you on a very interesting piece of work. Clearly there is a great opportunity in the SRM arena…

From the SRM leader of a major finance business: I really enjoyed reading this report, particularly as I am personally responsible for leading a project within my organisation to address the specific issues you raised. You certainly have given me a useful reference point that I will use to ensure that I continue to progress in the right direction.

 If you are aware of any organizations with what you consider to be a “best in class” to SRM, can you please let me know as I would welcome the opportunity to speak to them? 

What do you think?  Please contribute to the debate here.

Comments from the SRM lead of a major technology organisation: I’m in full agreement with the findings.  Whilst establishing a new SRM function at my current employer over the past 18 months I sought to find best practice at other organisations and have been surprised that very little exists beyond the basics.  

Having now set up and executed SRM basic performance measurement through to relationship management / governance and the pursuit of value through managing relationships we are very pleased with the impact its having within the business and our key suppliers.

The contract market has been slow for much of the year with downward pressure on day rates. There are still a number of good contractors without work at the moment so employing good procurement people on an interim basis shouldn’t present any problems, but these people typically are not looking to go permanent at £50k.

The permanent market has been ok but slow this year but we are seeing signs that things are picking up a little and companies are more willing to make decisions about hiring. I think this could be down to improved confidence, and the desire to spend budgets before they are lost at year end.

There remains a great deal of competition for the best procurement people in the £40-£60k bracket for the simple reason that there just aren’t enough good ones at that level.  Pre recession there was such competition for these people that in my opinion salaries got a little out of hand and there were examples of relatively junior (i.e. less than 5 yrs experience) but talented people already earning £50k+ in London.

The “temp to perm” market in procurement is limited because the pure interim market has grown significantly in the last 5 years. Current economic conditions dictate that some very good people are being made redundant through no real fault of their own.  Many of these want another “permanent” role so will consider a temp to perm arrangement and these are our obvious target people.

As with our study earlier in the year into the Impact of the recession on Procurement (the results of which are still available online) we are particularly keen to maximise the number of contributors to the research. If you haven’t had chance to take part yet, this is our final request for you to contribute.

The survey takes 5-10 mins and the closing date is Friday 30th October so please find the time to enhance the value of our research. The resulting report will be published in November.

The survey is available here.

With such a positive response already we are confident that we can produce some valuable research and aim to complete the report for publication this Autumn.

As ever the value of our research will be greatly enhanced by maximising the number of relevant contributors so if you haven’t had time to do so already, please can you take part by clicking here.

If you have any additional comments please feel free to contribute to the survey blog, or you can e mail us at info@edburydaley.com

Demand remains strong although the market has been characterised by delays caused by issues such as seeking approval to go outside of a company recruitment freeze, corporate politics, budget restrictions and the understandable desire to ensure that the right decision is being made before committing to an appointment.

Whilst there are many procurement professionals who are currently looking for new roles, both as interim and permanent members of staff, the strongest candidates remain in short supply, particularly in key areas of indirect spend.  

Due to the work we have recently undertaken with blue chip clients in consulting, banking, FMCG and retail sectors, we have engaged with a number of procurement professionals who belong firmly in the upper quartile of the profession. 

In particular we have several outstanding candidates with the following expertise:

• Procurement Consulting with emphasis on transferable skills, change & programme management etc

• Vendor Management specialists

• Category specialists in Professional Services, Telecom’s & IT, Facilities/Property, HR, Marketing, Travel

If you would like to discuss any of the skills mentioned or candidate availability, please contact Andrew Daley (0161 776 4603) Charlie Bolam (0161 776 4605) or Hannah Jackson (0161 776 4608) or e mail us info@edburydaley.com

“Real SRM is the one of the most important factors for success in a procurement role. However most SRM being discussed today is in relation to IT systems and not the real soft skills that will bring innovation and improved business performance to bear.”

Do you agree? 

Our experience tells us that there is certainly a lot of investment in Vendor Management in the technology sectors at the moment, and we have been encouraged by the number of SRM specialists who have got in touch with us about their careers since the survey was published.  Again the evidence is that a technology focus accounts for a lot of the biggest SRM roles.

Are you in an SRM or Vendor Management role with a different category focus?  We are keen to hear from you about your experience and your career aspirations. 

SRM is the best available tool to ‘unlocking hidden profits’ that derive mutual benefit. However it is a two way relationship and both parties have to be committed to the process in order to optimise and gain the real benefits.”

What do you think?  Do you agree or can you offer a different perspective? Please complete the survey and we welcome any additional comments here.

Andrew 

We also noted in our recent blog that there has been a noticeable increase in the number of specialist Vendor Management roles that we have been asked to recruit for in the recent past, particularly this year.

So in this survey we look at how SRM or VM has risen in importance as businesses increasingly seek value from their suppliers, and we examine how expertise and success in this area enhances procurement and supply chain professionals’ career prospects’

So please do find 5-10 mins to contribute, and we particularly value your input in the “other comments” section. The survey is available here.

Edbury Daley is an executive recruitment company specialising in both interim and permanent appointments. If you are having difficulty finding the procurement talent you need for your business, or are looking for a new role, please mail us at info@edburydaley.com Alternatively you can call Andrew Daley (0161 776 4603), Charlie Bolam (0161 776 4605) or Hannah Jackson (0161 776 4608)