Procurement and Supply Chain Recruitment - Market Update, November 2021

From gentle growth in recruitment activity in the first quarter 2021 we saw activity really picking up as we entered the second half of the year. Momentum has continued at pace and recruitment activity shows no sign of slowing down at this time.

Demand for procurement and supply chain talent is now above pre-pandemic levels as the need for specialist talent is driven by post pandemic economic growth and focus on UK and global supply chain challenges; as the need for optimal and effective supply chains becomes the hottest topic on board room agendas. Our own activity mirrors recent economic data form CIPS/Markit, showing UK recovery regaining momentum in October, with the UK Composite Output Index showing 56.8 in October, up from 54.9 in September and the headline seasonally adjusted IHS Markit / CIPS Flash UK Composite Output Index was the highest since July and remained well above the neutral 50.0 mark.

The IHS Markit/CIPS UK Services PMI for October, showed the fastest rise in business activity for three months at 59.1 in October, up from 55.4 in September signalled the strongest pace of recovery since July.

Some Uncertainty…

However, Markit/CIPS UK Services PMI for October also indicated that cost inflation accelerated to its strongest in over 25 years. Tim Moore, Economics Director at IHS Markit commenting on the latest figures said "record rates of input price and output charge inflation appear to have dampened business optimism, which eased to its lowest since January. Further comments from survey respondents also cited worries about prolonged staff shortages and constraints on growth due to the supply chain crisis.” Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said “escalating business costs remain deeply concerning” and “a third of supply chain managers reported stronger job creation as vacancies grew to meet fresh demand, but many struggled to find the right staff from ever-decreasing numbers of job seekers.”

 

Despite great economic uncertainty and the possible risk of a slowdown amid the recent rise in COVID-19 cases, we see overall demand for talented procurement and supply chain professionals remaining strong; and we believe fluctuations in demand for procurement and supply chain talent will be less effected than most other disciplines.

Candidate Short…

The most significant challenge for employers in all industry sectors, continues to be securing candidates with the specific procurement and supply chain skills required in a ‘candidate short’ market. Prospective candidate’s move decisions have been hindered by economic uncertainty in a pandemic effected market, where many are taking a cautious approach to securing a new job unless it meets all their ‘move criteria’.

The rapidly increasing demand for specialist supply chain labour and more jobs available than suitable applicants, has put significant upward pressure on both interim and permanent market rates. Good candidates are getting multiple offers compelling many companies to offer at the top of bandings (or getting senior approval to go in excess of banding) to get people on board.

Needs to offer a good balance of benefits, including market competitive salary, competitive benefits, bonus (where applicable), development opportunities and home/flexible working.

Finding suitable candidates has become progressively more difficult as the year has progressed. Many of the best Supply Chain and Procurement candidates are likely to be passive and occupying good roles already. Some degree of caution remains among many prospective candidates, who are reluctant to move in these uncertain economic times. Job security and a good work/life balance have undoubtedly become ever more important for many in a post pandemic jobs market.

Remote/flexible working is become more important to a lot of candidates and we would suggest that demanding for example 5 days a week, office based in London will count out 50% of the candidate pool.

Recruitment and on-boarding:
Processes need to be slick and candidate focused. With good people increasingly harder to find organisation need to optimise their Interview Offer and On-boarding processes. The market is moving quickly and talented people with hard to find skills can afford to be ‘choosey’. Any gaps or delays in the company’s recruitment process, runs the risk of losing the candidate’s commitment and loss to other employers.

We have seen an increased demand across almost all areas. Evidence of exceptional soft skills; supplier management, stakeholder management with effective engagement and persuasive skills remain as critical as ever. Categories we have seen most in demand are: -

IT Software – ‘main player knowledge’ e.g. Oracle, Microsoft, SAP, AWS

Industry bespoke smaller vendors

Application Development

Cyber Security

Cloud

Data Centres

IT Professional services – managing suppliers such as IBM, Cognizant, Accenture, Tech Mahindra etc.

Professional Services

Legal

Consultancy panels

Marketing

Digital Marketing for Websites, Apps and Integrators

Logistics

Across the board


INTERIM RECRUITMENT…

We have seen a steady increase in interim demand, particularly as we have moved into the final quarter of 2021. Requirements would appear to be twofold, to cover off lack of headcount while organisations seek permanent people or to fulfil Covid-19/pandemic projects coming online.

The fixed term contract is still popular with clients, but very unpopular with most candidates. Lots of these roles are taking a long time to fill, if at all! Organisations that really want to maximise their talent pool should consider securing their interim resourcing outside IR35 Off-Payroll regulations (where they can).

Interim rates are definitively rising, so whether using Limited Company, FTC or Umbrella, organisations need to be aware that rates that were competitive three months ago are unlikely to secure hires in the current market.

We anticipate interim rates continue to strengthen as we move through the remaining year.

CONCLUSIONS…

It remains a very busy and aggressive recruitment market, with few active candidates available and recruiters competing for a diminishing pool of Procurement and Supply Chain professionals.Good candidates are getting harder and harder to find, as the economy picks up and companies focus on supply chain risk, continuity and procurement efficiencies. We see the demand for procurement and supply chain talent remaining strong.

People with the necessary specialist skills and category experience are harder to attract in a cautious pandemic effected market, so employers should consider carefully their attraction package and on-boarding processes to ensure they reach and attract both the best active candidates AND the best passive candidates, willing to ‘jump ship’ from secure roles. Finding and attracting the best talent requires employer to present solid brand value, security, opportunities for career development, as well as market competitive and comprehensive salary and benefits package.

The most significant change we have seen post pandemic, is an expectation amongst our candidates is for comprehensive flexible/home working options as part of the employment contract.

We have seen an increase in salaries and interim rates across almost all disciplines. Employers are having to offer significant salary uplifts, to secure talented professionals already in good jobs. The FTC remains unpopular with interim contractors, other interim employment options should be considered where possible.

To engage the candidate and ensure commitment throughout the recruitment process, the recruitment package needs to be backed-up up by efficient, quick and responsive interview and onboarding processes; in what is a fast moving and highly competitive race for talent.

Beaumont Select Market Bulletin, November 2021.