The growing skills gap is a critical challenge for the future of procurement, according to research by Economist Impact.
As procurement evolves into a more strategic function within organizations, the gap between current skills and future needs is becoming increasingly apparent. A recent Economist Impact research program, sponsored by Amazon Business, highlights a troubling challenge: there is a disconnect between the skills procurement leaders see as most essential for the future and current reported skill levels. And the same leaders aren’t yet aligning their training programs with those needs. This growing skills gap threatens the effectiveness of procurement in an environment where the demands on this function are greater than ever.
Procurement’s skills transformation
The procurement landscape is undergoing a significant transformation driven by technological advancements, increased complexity and new sustainability demands. Procurement leaders report that skills in these areas will be more important five years in the future compared with today.
Jacobo Pastor Garcia Villarreal, senior specialist on integrity and procurement policies at the OECD, reflects on this expanding range of capabilities and the need for organizations to keep pace. "Procurement professionals are subject to more and more requirements and demands from the landscape. Value for money is still the primary objective, but now there are also environmental, social inclusion, innovation and economic objectives to consider," Mr Villareal notes.
Klaus Staubitizer, chief procurement officer at Siemens, comments on the same. "We’ve moved beyond just cutting costs. Our focus now is on creating value through sustainability, innovation and resilience. This approach has been crucial, especially in light of recent global disruptions," Mr Staubitizer explains.
Misalignment between current skills and future needs
The shifting landscape necessitates a regular reassessment of current skills to ensure they meet broader objectives and shifting priorities. However, many organizations are not effectively taking stock of their existing skill levels as they look toward these evolving priorities. The result is a disconnect that could hinder their ability to execute future strategies.
One finding from Economist Impact’s survey is a gap between the skills that procurement leaders say are essential for their organization in the future and the competencies their teams possess. There is also a misalignment between current training frequency and the skills prioritized for the future, with firms no more likely to regularly upskill in areas of future importance than they are for other competencies. Together, these results underscore that procurement leaders are planning for the future but leaving their teams behind in these plans.
What’s behind the gap?
The identified gap between current skills and future priorities likely stems from two main related issues: procurement leaders may not fully understand the strengths and weaknesses of their teams, or they’re not yet mapping current training to the skills that will be most essential in the future. Effective future skills planning can be extremely difficult as procurement teams attempt to keep on top of their current workload. On this point, Sheri Hinish, global consulting sustainability technology and ecosystems Leader at EY, notes that, for the procurement function, “Most of the real-time feedback that I listen to is that they're often understaffed.”
Bridging the gap: a call to action
To address this strategic planning gap, procurement leaders must take a hands-on approach. Ms Hinish stresses this, adding that despite the challenges they face, procurement leaders are “trying to move from being reactive to more proactive.” Regular, objective evaluations of team competencies are essential for identifying abilities and tailoring training initiatives to meet future objectives. This process should be ongoing, with leaders continuously adapting their strategies as the procurement landscape evolves and new solutions for improved productivity become available. Bridging the skills gap will require not only investment in new technologies but also a renewed focus on developing the human capital necessary to navigate the complexities of modern procurement.
