Talent management is a hot topic in procurement – and has been for a while now. Baby Boomers are retiring, and there’s a shortage of rising procurement leaders ready to take their place. In fact, the U.S. Census Bureau predicts that more than 60 million baby boomers will exit the workforce by 2025, and only approximately 40 million new bodies will enter. That’s a pretty big gap.

With technology continuously advancing and the skills needed to succeed in today’s market constantly evolving, finding procurement professionals with both the right experience and technical know-how is challenging. But talent is key for procurement’s future – it directly contributes to value creation, performance and competitive advantage, and the business’ knowledge of products, processes and partners within the supply base – all critical components for long term business success.

When looking to the next generation of procurement leaders, where are the biggest talent gaps today?

  1. Data analytical skills. Living in an information-centric world, we have loads of data at our fingertips – and we need to make sense of it in order to drive value. Rising procurement leaders need to understand and be capable of fully analyzing complex categories, supplier information, and relevant third-party data regarding supply, suppliers, and markets. This involves diving much deeper than simple analytics, spend management and reporting. When data is properly analyzed, procurement can gain actionable business intelligence by identifying trends and correlations that can’t be uncovered with traditional methods.
  2. Category expertise and negotiation skills. Supply networks are complex and often made up of thousands of suppliers across the globe. Procurement professionals need to fully understand the complexities of defining what’s needed, evaluating what’s offered and negotiating the pitfalls. Knowing the market, the players, and how to work with them is key for driving value in a relationship-oriented landscape. And in today’s job market, where employees tend to jump around significantly, establishing deep and specific industry knowledge is tougher than ever for new procurement and sourcing professionals.
  3. Innovation and collaboration skills. Being receptive to new ideas is essential for keeping pace with the landscape and moving business forward. Fostering relationships with sourcing partners by aligning your economic interests and objectives with theirs encourages them to improve processes and foster innovation for mutual success. Procurement leaders today need to be effective collaborators and relationship builders, as establishing these types of partnerships gives the team an edge over competitors. In our recent survey of procurement professionals, 50% of respondents considered data analytical skills to be the biggest skill gap in procurement – category expertise was identified by 35% of respondents as the biggest area for improvement, 35% are lacking innovation and collaboration skills, and 15% desired better negotiation skills in their organization. This research revealed procurement teams are still struggling with finding the right mix of skills and experience to fill the void.

Honing these skills is part of what sets best-in-class procurement organizations apart from the rest. Investing in the team you have through internal job rotations, training, external sourcing partnerships and establishing cross functional teams helps reduce turnover, increase job satisfaction and ultimately draw in (and build) more talent.

Collaborating across the functions of finance, manufacturing and engineering, for example, can bring a broader understanding of business and technical experience to the group, and help set procurement up with the knowledge and data they need to perform their job effectively. Another example: working with the marketing team to better understand what’s driving customer demand, and then taking that knowledge to suppliers to ensure you’re producing the best and most-ready end-product possible.