MARKET BULLETIN AUTUMN 2023
PROCUREMENT AND VENDOR MANAGEMENT
More people than posts, but not always the right people…
Overall demand for Procurement and Vendor Management labour has remained largely flat throughout the year. The fast growth in both Permanent and Interim demand we saw in 2022 as firms rallied post pandemic was not maintained into 2023. This year has seen an increase in available labour and a reduction in demand as businesses have responded cautiously to the UK and wider economic and geopolitical outlook. We have seen some fluctuations and an overall slight increase in Interim activity, but periods of increased demand have not been consistent. 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, remains a significant challenge for many organisations.
Post holiday boost…
On a more positive note, recruitment in September usually picks up as people return from holiday and the final quarter of the year is normally the busiest as businesses start looking at restructuring plans for next year; consider upskilling and resourcing to help improve underperformance and start looking at next year’s activities and budgets.
Interim rates stay flat for most, but salaries have increased…
Increased labour supply and less available jobs has kept Interim rates at about the same level as they were and the beginning of the year; and with more Contractors available since the tech industry shrinkages earlier in the year, we have not still seen any significant increase in day rates. Permanent rates have been pushed up by cost of living/inflation rates, in line with other sectors, although particularly hard to find Category skills or specialisations are securing better than industry and sector average salaries & packages, and interim day rates.
Procurement & Supply Chain is doing better than other sectors...
The UK Report on Jobs for August (KPMG/ REC) said that “survey data pointed to a broad-based decline in hiring activity across the UK. Permanent staff appointments fell at a rapid pace that was the quickest seen in over three years, while temporary billings also contracted. It goes on to say that “Recruiters frequently mentioned that employers were hesitant to commit to new hires and adopted recruitment freezes due to a weaker economic climate.”
The REC Chief Executive, Neil Carberry said: “August is always a slower month for new permanent roles, but this has been exacerbated in 2023 by the lack of confidence to start the new hiring we saw among firms in the Spring.” On a more positive note, he says “as inflation begins to drop, it is likely that firms will return to the market later in the year – employer surveys suggest confidence may be returning.” (Source: KPMG/ REC, UK Report on Jobs, August 2023)
WHAT IS HAPPENING NOW…
INTERIM
Interim recruitment activity has increased over the last month. Some category and specialisations have been extremely hard to find and budget pressures on some firms have seen significant disparity between the rates offered and talented needed. Contract opportunities can be slow to fill, and some London based roles have been particularly challenging; although the availability of Hybrid or Remote Working options will help secure hires. Increased supply has seen average day rates staying almost static.
Most roles (unless very senior) are still inside IR35 regulations, and we continue to see a circa 80% inside IR35 and 20% outside split.
We have seen Interim activity across most sectors, our busiest roles have been:
- Category Managers £600-650 (inside IR35) and £500 - 600 (outside IR35)
- Head of Procurement £750-900 (inside) and £650 - 800 (outside)
- Analysts / Buyers £350-450 (all inside)
PERMANENT
Utilities & Infrastructure sectors are still busy with a disconnect between salaries looked for and salaries paid, many roles are staying open for a long period of time.
Financial Services & Fintech sectors are still busy especially at the Category Management level and Risk and Vendor Management roles. Many Fintech firms and some Financial Services firms are more likely to pay top market rate or above to secure the best people.
We have seen a lot of activity in Private Equity and Pharmaceutical sectors.
Automotive sector is still busy, however there is a lack of skilled UK people. The UK Automotive sector traditionally recruited a lot of skilled automotive experienced procurement people from the EU; Brexit has made recruiting suitable talent much more challenging for UK Automotive firms.
WHAT IS GOING TO HAPPEN! This year…
We expect the shoots of growth we have seen in September, to continue through the next couple of months, as firms start investing and restructuring as they hope for more favourable economic conditions and reduced risk in a deflationary economic environment.
Businesses are starting to look at their plans for next year; and many will need to review and upskill their procurement and vendor management functions and teams, to ensure business security and competitive advantage. There is however, still hesitation among some of our clients on permanent staffing investment, and we expect more clients looking at more flexible Interim Solutions to help them minimise their risk in what still is an uncertain economic environment.
Average salaries are rising under cost-of-living pressures and the demand for hard-to-find talent for many procurement and vendor management disciplines has meant that people in our sector are seeing slightly higher rate increases than the UK average, across sectors.
Fully remote working a legacy of covid and lockdown is no longer as prevalent. Returning to the office is becoming more important for many organisations, with 3 days in the office and 2 days at home more frequent, especially in FS sector. We are seeing many firms now basing their Bonus levels on the number of days in the office. Conversely returning to the office is becoming more important for some candidates too! Overall, the office / home hybrid pattern has become critical to the talent you will attract.
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SUMMARY
Economic uncertainty is still making recruitment decisions for businesses hard, and some employers are still reluctant to commit to permanent roles. For firms looking to recruit permanent staff, finding great fit procurement & vendor management people remains a significant challenge in many instances, despite more candidates on the market.
Securing candidates with the right category experience and soft skills requires (market verified) competitive employment packages, salary (and where applicable, bonus) packages; and efficient and friendly on-boarding processes to attract and secure the talent employers need. Employer’s brand value and flexible working options need to be carefully considered to ensure the best talent is not lost to competing employers.
For most candidates, the market stays favourable as starting pay continues to be driven up by inflationary pressures and high demand for candidates with specific skill sets. Contractor rates will need to mirror permanent rises, but with plenty of ‘Interims’ available, we do not expect a significant rise is day rates, unless the economic situation improves significantly.
We expect the increase interim recruitment demand seen over the last month to continue over oncoming weeks, as businesses look at lower risk resourcing strategies to meet with their plans for 2024.
Talented procurement and vendor management people will continue to make a critical contribution to businesses success in meeting the ongoing challenges post pandemic. Brexit, Supply Chain Security, Environment, Sustainability, Corporate Social Governance, and war in Europe do nothing but fortify the importance of effective supply chain and procurement teams and we see procurement and vendor management sectors remaining buoyant.
If you would like more information about Interim or Permanent Recruitment Solutions for Procurement, Supply Chain and Vendor Management disciplines, please call:
T: +44 (0)1403 248 448
E: info@beselect.co.uk
The Beaumont Select Recruitment Team
Beaumont Select Market Bulletin, Autumn 2023
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