Labour shortage in procurement: Purchasing is running out of junior staff

There is hardly any other occupational sector where more vacancies are currently being advertised than in the area of procurement. Digitalisation does not stop at procurement, but hardly any industry insiders assume that digital solutions will become a job destroyer. On the contrary: digitalisation will make the profession more diverse, more dynamic and more challenging. Salaries in strategic and operational purchasing are already over 45,000 euros a year for career starters, and with growing experience up to 90,000 euros are possible. Nevertheless, a dangerous trend is currently emerging. The supply chain is losing a disproportionately large number of qualified employees, especially at the lower levels. This article explains the reasons for the "talent exodus" and how companies can counteract it.

Multiple reasons for a talent exodus

In a recent study (https://skilldynamics.com/blog/new-research-coming-soon-breaking-the-skill-loss-cycle-in-supply-chain-and-procurement%EF%BF%BC/), the situation in procurement was examined. Around 200 decision-makers from the USA and Great Britain were asked about the current situation. The results of the study:

- More than a quarter of the junior staff in procurement plan to change jobs in the next two years.

- 99% of all senior executives express concern about the consequences of high employee turnover.

- 62% of buyers cite a high workload as a reason to change jobs.

- For 47 %, a lack of promotion opportunities is the trigger for a change.

- 34% of respondents complain about a lack of respect for their work.

- 19 % do not feel valued by their own company.

A changing work environment - and companies that do not react to it

Almost three quarters of the junior staff in purchasing see an increased need for in-service additional qualifications in order to still be able to meet the changing requirements. Almost all respondents, namely 98%, would like to see more training and education. The big problem: procurement jobs in the supply chain sector often require comprehensive strategic decisions and problem-solving approaches right at the beginning of a career, for which young professionals are neither comprehensively prepared in training nor in their studies. The young professionals are "thrown in at the deep end", are confronted with high workloads, cannot fully fulfil the tasks assigned to them, do not feel valued - and consequently leave the companies. A constant, dangerous cycle is set in motion. The result is visible on the labour market in Germany as well.

Masses of vacancies and hardly any applicants

In October 2021, Focus  published an overview of the labour market in Germany. Based on data from the portal stepstone.de, it became apparent that in hardly any other sector were more job advertisements published than in the area of purchasing, logistics and materials management. The increase in job advertisements doubled here. There are masses of vacancies along the supply chain - but hardly any applicants. One reason for this could be the high demands placed on buyers. After all, no company can afford to make mistakes in procurement - because on the other side of the negotiating table are usually highly specialised sales professionals. Procurement specialists must not only have a sound education, but also know their own company as well as the procurement markets. Professional experience is indispensable, as are the skills to minimise running costs, to create security of supply, to be able to react highly flexibly to changes and to keep a constant eye on markets. In addition, there are legal aspects and documentation obligations after a contract is concluded - and qualified risk management in interaction with suppliers. In short: not everyone can do purchasing. But how do companies succeed in winning the war on talent in the supply chain and not only find high-performing junior staff, but above all retain them permanently?

The shortage of skilled workers has arrived in purchasing - and demographic change will exacerbate the trend even further.

The shortage of skilled workers has arrived in purchasing - and demographic change will exacerbate the trend even further.

Experienced, qualified buyers are virtually no longer available on the traditional labour market. In a few years, the "old squad" of buyers will retire and the shortage along the supply chain will increase even more. In addition, there is a change in the entire job description that has been emerging for about 20 years. Whereas buyers used to be primarily operational goods procurers, the focus today is on the demand for generalists. Modern buyers are project managers, confident in global markets with intercultural skills and are seen as shapers along the supply chain from the supplier to the customer.

There is still one thing missing in Germany: standardised training. There are no educational programmes and very few courses of study that qualify junior staff for a job in procurement. Instead, current buyers are usually lateral entrants from different sectors who have acquired their expert knowledge through further training and many years of experience.

What can companies do proactively to first find and retain supply chain talent?

1) Talent is primarily found within the company itself. The big advantage here: The specialists already know their own company, are integrated into the structures and processes and know the requirements "from the ground up".

2) The German Association of Materials Management, Purchasing and Logistics (Bundesverband Materialwirtschaft, Einkauf und Logistik e.V. - BME) has had a "Personnel in Purchasing" specialist group since 2009. As the largest provider of further training measures in the German-speaking world, the BMW offers further training to become a purchasing and logistics specialist, a certified purchasing expert or a purchasing manager.

3) Via the BME career portal (www.karriere.bme.de), companies can specifically address potential applicants for the field of purchasing or recruit via the applicant database.

4) Create career opportunities! Because only if junior staff recognise potential for their own, professional advancement will they be willing to commit to a company permanently.