Does Procurement Have a Skills Gap Concern?

With procurement's continuing evolution into an increasingly important and strategic function for businesses, a gap is developing between the sector's current skill availability and its future needs – and it's becoming increasingly apparent.

The Economist Impact undertook a research programme, sponsored by Amazon Business, which 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.

The same leaders aren't yet aligning their training programmes 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.

Key findings

• 54% of procurement leaders say digital transformation skills will be important in five years, up from 36% today
• 64% of procurement leaders agree that AI and machine learning tools help procurement professionals do their jobs better
• 65% of procurement leaders report relying on external resources for technology skills

Procurement's skills transformation

With the landscape of procurement still in the midst of 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 organisations 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,"

Klaus Staubitzer, Chief Procurement Officer at Siemens, adds: "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."

Misalignment between current skills and future needs

As the landscape shifts, regular reassessment of skills becomes necessary to ensure they will meet broader objectives and shifting priorities. However, many organisations are not effective at taking stock of the existing skills levels amidst their employees as they seek to evolve priorities. This result is a disconnect which 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 organisation in the future and the competencies their teams possess.

There is also a misalignment between current training frequency and the skills prioritised for the future, with firms are 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.

The cause of the gap

The gap between current skills and the priorities of the future are believed to stem from two main issues which are related, according to the research. 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.

Sheri Hinish, Global Consulting Sustainability Technology and Ecosystems Leader at EY, says: "Most of the real-time feedback that I listen to is that they're often understaffed."

Bridging the gap

To address this strategic planning gap, procurement leaders must take a hands-on approach.

Sheri 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.

As procurement looks to bridge the skill gap, it will not only take investment in new technologies, but a renewed focus on developing the human capital needed to make it through the complexities of modern procurement.

You can read the full report here.

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