Reskilling Procurement for Digital Success and Equity
Along with the challenges of managing supply chains through a global pandemic, CPO’s today must also juggle the increased expectations for agility, cost savings, innovation, sustainability, ethical procurement and digitisation, all while fighting for gender equity and dealing with a talent shortage.
Filling the pipeline with top candidates that can help you meet the high demands procurement is facing is no small order. Bronwen Hann, President and Senior Partner at Argentus, a leading supply chain and procurement recruitment firm was kind enough to take a few moments to answer some questions on why women continue to be underrepresented in supply chain, what we can do about it, and reskilling procurement for digital success and equity.
1. Firstly, could you give us an overview of how supply chain and procurement ended up to be such a male-dominated industry?
“First of all, thanks very much for asking me to do this interview!
“I think the world of corporate leadership in quite a few different industries has been traditionally male-dominated, with women having to work harder to “break the glass ceiling” and get a seat at the leadership table. Supply chain is like many industries in that respect. That being said, supply chain, in particular, does have roots as a “blue-collar” function, and I think that’s a factor as well.
“Historically, Supply Chain Managers were promoted off the shop floor, from warehouse or front-line manufacturing or logistics roles which have traditionally been more male-dominated. In the past, people working in warehousing or transportation were more likely to be men, and since that was the talent pool for leadership positions (e.g. operations managers, logistics managers), those leaders tended to be men as well. As the industry has become more analytical, more strategic, with more focus on formal education, there are more opportunities for women to get involved and rise into leadership, so this is changing.”
2. According to Gartner Inc.’s 2020 Women in Supply Chain Survey, representation of women in the total supply chain workforce remains unchanged at 39% year over year, however, 17% of chief supply chain officers (CSCOs) are now women – an increase of 6% compared to 2019. Yet, there are proportionally now fewer women at the vice president and director levels
So, it seems that although we have made some advancements, women continue to be underrepresented in leadership roles. Could you, firstly, tell us why you believe this is, and secondly, what you feel can be done to about it?
“I think there are quite a few factors. I’m a woman who has been involved in the Supply Chain industry for 20 years through my company, Argentus Supply Chain Recruiting, so I have some front line experience with this issue, but like many similar issues, it’s incredibly complex and difficult to unpack.
“However, there are a few things I’d point to: according to the Canadian Women’s Foundation, only 25% of VP positions in the broader economy are held by women, and only 15% of CEO positions are held by women. The lack of female representation in supply chain leadership is, to an extent, a symptom of the larger lack of female representation in corporate leadership more broadly.
“This doesn’t mean that supply chain shouldn’t address the problem. There have been some great initiatives, like Supply Chain Canada’s Top 100 Influential Women in Supply Chain, and others, to highlight the wonderful leaders in the field today. Certain organizations have formal diversity targets when it comes to elevating people into senior leadership, and that can be useful. But more broadly, I think we need to be loud and proud as women leading in supply chain, to draw attention to this issue wherever possible.
“Supply chain has always been a field that people “fall into,” rather than choosing it out of school, but this is changing as well. People are starting to recognize how sophisticated and exciting the field has become, and that’s leading more young people to take degrees, formal education, and build intentional supply chain careers. I think leaders in the industry, whether male or female, need to show those young people that, not only is supply chain an exciting field with great growth opportunities -- it’s a tremendously diverse field as well, where women are leading the charge”.
Overall, I think it’s a mix of formal programs and initiatives, and all of us doing our part to change the culture.
3. It’s long been said that procurement has a branding problem. How do you feel we’re doing in that arena since the onslaught of Covid-19 on supply chain, and again, could you lend some words of wisdom on what can be done to improve its reputation?
“Despite the massive challenges and disruptions, COVID-19 represents a huge opportunity for the supply chain profession. For the first time, average people have an awareness of the mountains supply chain professionals move every day, as well as the inconvenience, and -- when it comes to things like vital goods and PPE -- suffering caused by supply chain failure. Supply Chain Management is absolutely essential work to keep society moving, and more people recognize that than ever before. It’s become a key strategic function that touches on every aspect of a business. It’s more digital than ever before, more diverse than ever before, with very strong compensation and career prospects.
“All the pieces are in place for supply chain to emerge into the wider consciousness as one of the most exciting career paths that young people can take. But in some circles, it still has a reputation as a fusty, back-office function. As leaders in the industry, we need to take a stand and say, “it’s not the ‘80s or ‘90s anymore. Supply Chain isn’t boring. Supply Chain is cool, and here’s why.” Because it is. People who have built their careers in the field get it. But young people don’t always get it -- because we haven’t done enough to communicate just what makes it such a great career. As I said, this is changing.
“Here’s an example from our own work: at Argentus, we benefit from updating supply chain’s image to match with the times. The more we attract passionate, driven candidates who get into the field and connect with us, the more we have to offer our clients looking to hire. So on our blog, we work to highlight awesome supply chain role models and communicate the great things happening in the field, with the goal of helping to update supply chain’s image.
“I think, as industry leaders, we should be finding creative opportunities to tell stories from the world of supply chain -- and show people, not just the failures, but the success stories, and all the incredible things great supply chain management makes possible”.
4. Procurement is experiencing a major shift towards digital transformation and by leveraging technology we’re able to now focus on other initiatives such as strategic procurement, driving sustainability, diversity, and innovation. How has this, or should this, change how we hire?
“These changes are really driving the growth of the procurement function, and that’s definitely changing the hiring landscape. As procurement delivers more to companies -- including innovation, diversity in supplier bases, sustainability, and strategic value -- the skills needs are greater.
“Front-line procurement skills are still important, but they’re now table stakes. For example, people should know how to make a purchase order, run an RFP, develop an effective contract, and how to use fairness and transparency in the procurement process. But to deliver all those added benefits you mentioned, individuals need other skills as well. In our conversations with leaders across the field, there’s a huge emphasis on soft skills. Written and verbal communication, the ability to present insights to stakeholders across the business, but even more importantly the ability to build real relationships with stakeholders and suppliers and build mutual value. Companies need people with exceptional emotional intelligence to build these relationships, and the overall business acumen to identify those ways of adding extra value.
“In short, this makes it harder to hire. Companies need to be more creative. It’s not about checking skills off a checklist. Many of these qualities can’t be gleaned from just a resume. It involves really digging into a candidate’s approach and what makes them tick when you assess them. It also means being willing to invest in people’s skills development after you hire -- whether it’s through coaching, mentorship opportunities, further formal training, rotating them through different roles or categories in a department, or other methods. It’s more difficult, but the opportunities are huge”.
5. Could you share some advice to those who are in leadership roles and are looking to attract top procurement talent in a tight market?
“As a recruiter specialized entirely within supply chain and procurement, we’re lucky to be giving advice to these leaders all the time! Many companies feel that they’re missing out on attracting the right talent or struggle to hire even for roles that feel like they shouldn’t be hard to fill.
“When I advise companies about how to attract talent, the fundamental is compensation, and that hasn’t changed: do a real analysis of competitors, and salary bands, to make sure that you’re positioning the role at the right level.
“Beyond that, there’s some low hanging fruit that companies don’t even realize is causing them to lose out. Often this comes down to process: Do you have a junior HR person reviewing resumes, or someone who deeply understands Procurement? How long does it take you to follow up with candidates? Do you insist on 4-5 interview stages, with an endless internal approval process before moving to the next stage? Companies win out by hiring nimbly and fast. This is not a market where top candidates are sitting around waiting for you to call them back. Sometimes candidates will be fielding 3-4 offers. If you adopt the mindset of, “we’re doing this candidate a favour by considering them, and they’ll be there when we get around to moving the process forward,” you’ll lose out every time to your competitors who recognize how in-demand the top candidates are.
“Another piece of advice for procurement specifically is this: with the exception of certain highly technical procurement categories, don’t get hung up on requiring exact category experience. My advice is to find people with very strong procurement fundamentals (understanding of RFx processes, contracts, supplier relationship management, analytics), as well as strong soft skills (business acumen, presentation ability, relationship building, emotional intelligence), and train the category later”.
6. Corporate ethics, including sustainability, diversity, and ethical procurement, are all hot topics being quickly pushed to the top of the C-Suite agenda. There have been studies that show that employees today are looking to work for companies that align with their personal values. Could you speak to this and whether you feel corporate ethics and brand reputation can be a hindrance or an advantage in attracting top contenders?
“Ethics and reputation are a definite advantage in attracting candidates. This is especially true when it comes to attracting candidates in the millennial generation, or Gen Z, which is becoming an increasing focus for companies especially as the baby boomer generation retires. More than ever, candidates want to work for companies that are making a positive impact -- and in ways that aren’t just paying lip service to causes, they believe in.
“When you hire, you need to do a frank assessment of your assets and liabilities in this area, and tailor your approach accordingly. Sometimes the problems run deep, and you’re hiring in an industry whose values don’t align with these candidates. But sometimes it’s a matter of investment of time and resources. Leaders should recognize where they might be falling short in these areas, and how that might be impacting the candidates they attract. They should build up these capabilities in a holistic way. It’s not just changing the branding on your careers page, but making a real investment in sustainability, diversity and ethical procurement. These things won’t just help you attract candidates, but they’re good business”.
7. Of course, one of the biggest challenges facing procurement leaders today is managing their team, and suppliers, remotely. Adding to this are the effects of the global pandemic on mental health. Would you have any suggestions or words of wisdom on managing a team through the struggles?
“Adjusting to remote work has been a challenge for everyone - including my own recruitment team at Argentus. But if you think about where we were a year ago, it’s remarkable what organizations have been able to accomplish. We’ve seen companies pivot their workforces and pivot their hiring in ways that are extremely impressive.
“To pick an obvious example: we’ve been beating the drum about recommending clients use video interviews for years, as well as allowing for remote work, and the uptake in these areas has sped up immensely. I think it’s because not only are these necessary adaptations to the situation caused by the pandemic, but they’re also good practice to hire more nimbly and attract stronger candidates.
“I think, when it comes to managing a team through the struggles, it’s important to still expect results, but also have compassion for the difficulty people are facing. Recognize that everyone is adjusting in some way, and you don’t always understand the magnitude of what people are dealing with outside work. It’s important to stay connected and check in with your team to make sure everyone is pulling the boat in the same direction, and support them when you can. We’re all in this together”.
Germany Adopts Revolutionary Supply Chain Human Rights Laws
While the title states that Germany’s newly adopted that targets human rights abuse across global supply chains is “revolutionary” ─ which it is ─, it certainly shouldn’t be. But nonetheless, today, on June 11th, 2021, the German Parliament has ushered in a long-awaited shift to mandatory company compliance rules. After months of negotiation, the German lawmakers finally pushed it over the finish line within the final days of the current legislative period. The bill will see German multinational corporations held legally responsible for any human rights or environmental abuses found across their global supply chains.
“The German government has taken a critical step to ensure that companies operate responsibly,” said Juliane Kippenberg, associate director, children's rights division, at Human Rights Watch. “Respect for human rights in global supply chains is not something that should be optional.”
This news comes at a time when global corporations are already being pushed towards environmental, social and governance (ESG) compliance, with a massive drive to reduce Scope 1, 2, and 3 carbon emissions from their supply chain operations and a concerted effort to avoid suppliers and manufacturers that do not meet the standards that industry-leading companies are now expected to meet.
Who will the new law affect?
With Germany’s new legislation, organisations that fail to meet the rules and regulations could be forced to pay fines potentially equivalent to 2% of their annual global turnover. However, it isn’t applicable to all.
According to Reuters, under the act, companies above a certain size will be forced to establish set due diligence procedures that prevent the abuses; from 2023, only companies with more than 3,000 employees in Germany will be affected. From 2024, the rules will expand to companies with more than 1,000 employees.
Statistics from within the country suggest that the first stage of this regulation rollout will affect 900 companies, while the second stage will put 4,800 companies under the spotlight. The bill will also enable the government to temporarily exclude from public tenders companies that receive fines in excess of €175,000.
“Incalculable risks arise for companies,” said Joachim Lang, general manager at the Federation of German Industry. A word of warning from a respected leader, at a time when industry lobby groups and wholesale businesses fear that the new law increases bureaucracy and suggest that price rises may be inbound.
The Take of German Giants
After looking at the incoming legislation, Daimler AG, known more commonly as the automotive giant Mercedes-Benz, a company which, should there happen to be any ESG-compliance issues along its multinational supply chain, would pay a hefty fee, is welcoming of the push for change but hesitant about certain aspects of the bill.
“Daimler's position is: The respect for human rights is a central aspect of our sustainable business strategy. We, therefore, welcome the progress made on the Supply Chain Act. Although the regulations are very ambitious, the proposed legislation has a sound approach overall. It is based on internationally recognised human rights and on international agreements. And it gives companies more legal certainty in an area that has so far only been partially regulated.
Supply chains are not "chains" but rather exceedingly complex networks: Daimler alone has over 60,000 direct suppliers - and many more sub-suppliers. For this reason, we also consider the proposed risk-based gradual model to be sensible. The responsibility of the companies lies primarily in their own business area and with their direct suppliers. Companies must then take action in the deeper supply chain if there are concrete indications of human rights violations. Daimler AG already does that today.
Even though we support the proposed legislation in principle, we consider some aspects to be critical, e.g. the planned fines of up to 2% of the average annual turnover. Instead of threats of sanctions, we consider concrete measures, which companies must take in the event of deficits, to be more expedient. In addition, certain wordings are still vague and leave room for interpretation. Terms such as, e.g. "fair standard of living" should be phrased precisely in order to create legal certainty. Furthermore, documentation and reporting requirements should not lead to unnecessary bureaucracy and should be harmonised with existing rules. On the one hand, this does not help the people on the ground, and on the other hand, it puts a burden on the companies – and the implementation can pose substantial challenges for smaller companies in particular.”
This law is arguably one of the most important developments in the supply chain space so far this year. But it must be remembered that changes do not and will not happen at the push of a button and that democratic principles should be applied to the discussion prior to enshrining legislation into tablature. Environmental and human rights advocacy is a hike, not a brisk walk around the park ─ so, for German companies, it’s time to get their boots on the ground and start assessing their global, interconnected supply chain operations. And, hopefully, they’ll set a stellar example for the rest of us.