With the turn of every new decade come the myriad reflections on the past 10 years and predictions about what’s to come in the next decade. In sticking with this tradition, the American Productivity & Quality Center (APQC) just released a report that gives us insights into what the procurement professional of the future might look like.
In “Identifying and Developing the Future Skills Needed in Sourcing and Procurement: Evolving Landscape Requires Revamped Talent Development”, the benchmarking authority takes a deep dive into the profession to come up with a picture of the most in-demand skills for the future, with a focus on future talent development needs.
The group wasn’t overly impressed with the findings. “Our report finds that procurement talent development is not adequate in developing the most important skills for the future,” APQC concludes.
The Four Categories
In presenting an overview of the most in-demand skills, the biggest skills gaps, and how procurement leaders can close the gap, the group asked procurement professionals to rate the importance of—as well as their organization’s effectiveness in training and development for—skills across four categories:
- Job-specific: technical skills specific to the procurement function
- General business: business skills relevant in and beyond procurement
- Social: “soft” skills involved in collaboration and managing change
- Deep work: skills indicative of being able to focus without distraction
Overall, APQC’s findings show that the most important skills for the future are not job-specific. “Looking at the top 10 skills across categories,” it says, “it’s clear that the skills future procurement professionals need most are those that help them build relationships with internal stakeholders and suppliers, make difficult judgement calls, and translate business needs into procurement decisions.”
For example, nearly 60% of procurement professionals singled out business ethics as the top skill needed for success. The same percentage see communication (oral and written) as the top need area, followed by stakeholder management (55%), relationship building and management (52%), critical thinking (48%), and supplier relationship management (47%).
Other skills that procurement professionals see as being critical in the future include leadership (cited by 47% of respondents), complex decision-making (42%), and traditional negotiation (41%). Finally, 40% of procurement professionals see being a team player as an important trait for future success.
Filling the Skills Gap
When APQC asked procurement professionals about their effectiveness in training and developing the top skills outlined above, it picked up on some sizable gaps. In fact, there is a double-digit gap for each of the top skills between importance and performance, and some gaps are particularly notable.
For example, almost 60% of respondents said business ethics is critical/very important, but only one-third of them feel that they’re effective at helping employees develop this skill. “The consequences of not addressing these gaps are huge,” APQC points out. “If organizations cannot develop these skills in-house, they will be forced to secure them through external hires and/or consultants. This will increase the procurement function’s costs dramatically”
Of course, not developing these skills could be even more expensive, and downright dangerous. “Organizations may be able to rely on a handful of experienced procurement professionals for now,” the organization points out. “But when those people retire (and they will), the function will be in the hands of people who never learned how to lead, think critically, or act ethically, and who have never built relationships with key suppliers and internal stakeholders.”
Innovative Approaches
APQC’s research found that chief procurement officers and procurement directors understand the importance of training and development. In fact, nearly 55% view training as an essential or high priority. However, most senior executives are still focused on procurement’s cost reduction and risk avoidance capabilities vs. its more strategic and value-added benefits.
For procurement leaders to get executives to support their talent development plans, they’ll have to change the conversation from costs and risks to value generation. “The APQC benchmark data shows just how conflicted organizations are,” Sourcing Industry Group’s Dawn Tiura points out. “They all want to invest in training and education, but then fall into the trap of having short-term and tactical actions on costs and risks.”
Ultimately, APQC says procurement leaders should work with HR and other internal partners to realign talent development. A strong partnership combines HR’s employee-centric support and direction with the function’s operational knowledge of necessary skills, it says.
“Procurement leaders should also consider working with HR and other business partners to implement a job rotation program,” APQC continues. “Only 34.8% of organizations currently use job rotations in procurement, so implementing this practice in your company may provide crucial competitive advantage.”
