Procurement & Vendor Management Recruitment Update ~ Year End & 2024 Predictions

RECRUITMENT MARKET BULLETIN ~ PROCUREMENT & VENDOR MANAGEMENT

WHAT HAPPENED IN 2023...

RECRUITMENT MARKET VOLATILITY was evident throughout the year with little UK economic growth, geopolitical clarity or long-term stability, with many businesses cautious towards additional headcount. Whatever the talk, many companies were cautious about investment and circumspect with their permanent recruitment plans, with only a couple of sectors bucking this trend. 

PERMANENT RECRUITMENT MARKET REMAINED FAIRLY FLAT, and it did not maintain the rapid growth we saw in 2022 post pandemic, permanent sector growth remained languid throughout most of 2023.

PERMANENT SALARIES INCREASED SLIGHTLY ABOVE INFLATION across the board; some categories and disciplines showed greater increases than the average, including mid-level HR, Marketing, Digital, and IT category manager level people.

THE INTERIM MARKET GOT BUSIER over the year and Interim rates increased marginally as demand for interim labour increased (mostly due to the flexibility it offers organisations). We saw the normal main Indirects categories (particularly IT) driving this small increase.

AMMENDMENTS TO IR35 LEGISLATION DIDN’T CHANGE MUCH: Changes to the IR35 employment tax rules introduced in April 2021 with modifications due in 2024, caused significant expense and disruption for many businesses and contractors. Throughout 2023, we have seen a few more roles outside IR35, however the majority still sit inside (circa 75%) with some organisations now fully assessing their IR35 status rather than blanket inside IR35 determinations.

TIME TO HIRE INCREASED with many companies trying to secure people themselves through their internal talent acquisition teams, often for a long time and with limited success, then going out to agencies. This often led to muddled messages in the market, with roles that are advertised for many months often assumed to have something wrong with them.

A RETURN TO THE OFFICE with more organisations asking their staff to go back to the office 2, 3 or 4 days a week. This has led to a mismatch of expectations between job seekers demand for highly flexible hybrid working options, and many organisations belief that too much remote working damages business culture and reduces productivity.

AUTOMOTIVE SECTOR was busy as automotive supply chain challenges were addressed, and pent-up demand increased recruitment activity as the year progressed, at pace.

UTILITIES SECTOR was very busy throughout 2023 with several large recruitment campaigns for multiple vacancies (although the success of a lot of these campaigns has been mixed).

WHAT WE EXPECT IN 2024... 

 

INTERIM DEMAND WILL CONTINUE AT PACE while economic and geopolitical uncertainty persists. Businesses are reviewing upskilling their procurement and vendor management teams to ensure business security and competitive advantage as we move towards 2024. There is however still hesitation among some of our clients on permanent staffing investment, and we expect more firms looking at more flexible Interim Solutions to help minimise their risk in what remains an uncertain economic and geopolitical environment.

CURRENT PERMANENT STAFFING activity is expected to see gentle growth, any significant increase in activity is unlikely while geopolitical and economic uncertainty persists, and many employers will remain cautious towards significant permanent workforce investment. However, the need for talented procurement and vendor management professionals will be as acute as ever and while global and domestic supply chain challenges remain, we see the demand remaining strong, particularly for professionals with strong technology, analytical, SRM, supplier risk and strategic procurement skill sets.

STRONG DEMAND will remain for that mid-level contributor roles for candidates with excellent category knowledge. Up-to-date experience and skills in supply chain sustainability, corporate social governance and risk will remain in demand.

HYBRID WORKING MODELS: The new norm will be 3 days in the office and 2 at home, however many organisations would rather have their staff in the office than home, and we can see a move amongst some employers to get staff ‘back in the office’ to 4 days in and 1 day out model.

NEW CHANGES TO IR35 LEGISLATION will not make much difference to amount of contracts determined inside and outside the IR35 employment tax rules.

FINDING AND SECURING SUITABLE TALENT WILL REMAIN A CHALLENGE FOR MOST ORGANISATIONS: The continuing challenge for employers is not the quantity of applicants but the quality, finding and securing people with the right technical and soft skills to deliver, in a competitive recruitment market, will remain a significant challenge for many organisations.

GenAI and PROCUREMENT: Will 2024 be the year that GenAI starts changing the procurement landscape? Right now, there appears no clear pattern of this from our client’s, but the supply chain landscape is rapidly changing, and many innovative companies are realising the need to consider and implement AI technologies as a tool for strategic success. Procurement functions will need to consider where they sit in the AI revolution. With implementation of GenAI technologies it is likely that fewer resources will be required for category management, sourcing, negotiation, and operational process execution tasks, as well as for supporting activities such as spend analysis, risk control and contract management. Focus and tasks will shift, and new skills will be necessary. Repetitive text or document-based tasks are well suited to large language models (LLMs), and this will influence the supply chain and procurement recruitment landscape in the longer term.

 

ECOMOMIC FORECASTS: Procurement & Supply chain functions have traditionally been less effected by recessional or slow economic growth than many other disciplines. The latest KPMG and REC UK Report on Jobs for November indicated that total recruitment activity continued to be dampened by economic uncertainty, with Permanent placements falling, although at a slower rate than in the preceding 4 months, while temporary labour billings rose slightly as firms looked for flexibility in workforces. Latest Economic analysis by KPMG and others, highlight that geopolitical instability in the Middle East presents a near term risk to the UK economic outlook. It also points to the “series of economic shocks that have put the UK on a seemingly lower growth trajectory”; and although with latest ONS figures showing improved performance since pandemic, the KPMG report and other economic indicators suggest slow UK economic growth in 2024, and there are plenty of challenges and unknowns: borrowing debt, inflation, continued conflict in Europe and the Middle East causing further supply chain and energy cost risks, are just a few.

Pandemic, war in Europe and numerous other economic and geopolitical challenges demonstrate the role successful supply chain management makes to people’s lives. Skilled and innovative Procurement and Vendor Management teams have been crucial in dealing with the unprecedented economic and geopolitical challenges seen over the last 3 years; and the immense contribution made by talented procurement, vendor management and supply chain professionals does nothing but improve the visibility and prominence of Procurement Teams within both private and public sector organisations.