In procurement, we are always on the lookout for the best deal we can get. And that focus applies to our careers as well if the consistent churn in employment is anything to go by.
My LinkedIn page is blowing up with procurement pros far and wide starting new jobs these days, heading for perceived greener pastures. And for once, the pandemic is not fully to blame for this ongoing professional migration.
While there are COVID-19 related issues like return to office policies and a newfound appreciation for work-life balance, the fundamental reasons procurement folks leave their jobs revolves around issues of compensation, workload, career development and professional respect.
Of course, there are exemplary companies that treat their purchasing organizations well, have high retention numbers, and are recognized as great places to work. But they are the exception.
For businesses looking to add or retain talent, here are some strategies that can have a positive impact on your procurement and supply chain operations.
Create a workforce planning strategy
We create overall procurement strategies, build mitigation strategies for global supply chain risk and create commodity-based negotiation strategies. But few departments create a specific workforce planning strategy that addresses talent related departmental goals and objectives for the next two to three years, if not longer.
A workforce strategy should look at more than staffing needs and should reflect the knowledge, skills and abilities needed to execute such a plan. What kind of positions will be needed today and in the near future? How do we address professional development needs to close the knowledge gaps we’ve identified? What actions do we need to take to align resources with priorities?
And finally, what recognition and rewards are needed to encourage, sustain and retain employees?
Keep the employees that you have
I have two friends who recently negotiated great job offers with significant increases in salary, benefits and title. In both cases, when they gave notice, companies made a counteroffer to match. Both still moved on to the new positions, hurt that it took another offer to get fair treatment from their present employer.
Keep the staff that you have to minimize turnover. Respect and trust your employees, pay them well, provide job security, and create opportunities to use their skills and abilities. Some pandemic linked flexibility wouldn’t hurt either.
Acknowledge the competitive job market
It’s a candidate’s market today with demand for positions outstripping supply, at least for now.
In most cases, potential employees will not be coming to you. You will need to reach out and be creative in your search, not just relying on web-based employment sites or word of mouth. Companies searching for talent should start by developing the specific criteria for the position, being careful not to create a superhero job description that will be impossible to fill.
You will need to also offer a competitive salary and benefit package that attracts good candidates. Hiring managers will need to use their personal and professional networks, offer recruitment incentives to current staff, use executive recruiters, hire and promote from within, and carefully use social media. Also, reach out to employees who have left. Some may want to come back but lack the courage to admit they made an error in leaving.
Most importantly, make your business attractive to prospective hires. The conditions you create to keep employees will make you a better destination for new candidates.
Understand the cost of a bad hire
Congrats for landing the great candidate that you were after. You’ve made it through the recruitment process, countless interviews, reference checks, and negotiations on salary and compensation. The offer letter has been sent and the staffer will start next month. He certainly has the experience you are looking for, but you have a nagging uncertainty if he will be a good fit for your corporate culture.
Companies lose an average of $14,900 with each bad hire, according to a CareerBuilder survey. But the financial impact isn't everything. Once you begin to allow your organization to fill positions with marginal people, you have begun the performance erosion process. Even in a tight labor market, you are better off leaving a position open then filling it with someone who's a bad fit.
All the more reason to keep your present crew happy.
This story was first published in our Procurement Weekly newsletter. Sign up here.