Buyers are red hot
'Strategic' professionals are in demand
By Susan Avery -- Purchasing, 11/3/2005 2:00:00 AM
Purchasing professionals are concerned about supply and demand. That's what they do. But if they haven't recently had to fill a job opening or look for a new position themselves, they may not be aware that there's a shortage of individuals with the right skills, education and experience to develop sourcing strategy and manage supplier relationships in today's global economy.
Competition's hot for talented purchasing professionals who can think and act strategically.
Kevin Rohan, director of procurement recruiting for J.P. Canon Associates in New York, has seen a very active market for purchasing professionals since the beginning of 2004. "There has been a dramatic increase in the number of purchasing openings, with strategic sourcing roles the most common," he says.
At J.P. Canon, purchasing placement activity increased 66% in 18 months compared to all of 2002 and 2003 combined. Companies are contacting Rohan to help fill positions specifically in technology procurement (hardware, software and related services) and indirect sourcing (human resources, legal, marketing, travel, and facility services).
This increased activity is across the board—in both manufacturing and service industries nationwide, says Rohan. He has filled vice president, director and manager posts in financial services and pharmaceutical and consumer products industries in larger metropolitan markets such as New York, Boston, Chicago, Miami, Seattle, Detroit, and northern and southern California. On the other hand, he's seen a slowing in hiring in the automotive and high-tech industries. "We've seen a very large number of people looking to leave the auto industry," he says.
What Rohan and others are not seeing is interest in hiring purchasing agents and buyers who play more traditional roles—that is, individuals tasked with processing transactions. These jobs are slowly disappearing at most big companies that have installed e-procurement and enterprise resource planning systems (ERP) with purchasing modules, making way for more challenging positions that require professionals qualified to perform more strategic activities.
Despite the bull market for strategic purchasing professionals, the U.S. Bureau of Labor Statistics says overall employment of purchasing managers, buyers and purchasing agents is expected to be slower than average through 2012. "Demand for purchasing workers will be limited by improving software, which has eliminated much of the paperwork involved in ordering and procuring supplies, the increased use of credit cards by some employees to purchase supplies without using the services of the procurement or purchasing office, and the growing number of purchases being made electronically," states a recent BLS report on the hiring outlook for those in the profession.
People with a bachelor's degree in business should have the best chance of obtaining a buyer position, the report says. And, it adds, industry experience and knowledge of a technical field will be an advantage for those interested in working for a manufacturing or industrial company.
The increasing professionalism of corporate purchasers and their importance to the competitiveness of the companies they work for has long been promoted by organizations such as the Institute of Supply Management and publications such as PURCHASING. In a white paper he authored at the end of the 1990s, entitled Purchasing in 2010, James P. Morgan, editorial director emeritus, wrote that the days of the piece-part buyer are numbered.
"In his place are rising buyers who are constantly nuzzling suppliers for ideas, for better ways to produce components, for ideas about alternatives to components now in use," predicted Morgan. "Those who will run the supply strategy of the future will be able to clearly relate supplier power to corporate competitiveness. They will be those persons who best use the supply base resource to meet corporate competitive goals."
Skills
In other words, fewer purchasing agents, materials managers and purchasing managers mean more supply managers, supply chain managers and strategic sourcing managers. Other titles recruiters increasingly are asked to fill include chief procurement/purchasing officer, strategic sourcing vice president, director, and manager. With these new job titles, come new job descriptions.
Recruiters and hiring managers are seeking individuals with a diverse skill set. They're looking for people with leadership qualities and those who are team players. The new posts require an ability to communicate as well as strong sales and marketing skills. Project management skills are a plus.
Karen Weinstein-Millson, director of corporate procurement, Boston Scientific, Natick, Mass., recently hired a purchasing professional to fill an opening in her department for a purchasing card administrator. "Our pcard program has grown more than we anticipated so we wanted to get the right skills and competencies in the organization to ensure the program is well managed and that we don't have any leakage or fraud."
Weinstein-Millson categorizes skills required by individuals seeking employment in her department as "critical" or "desirable", depending on the level of the position. Typically, she looks for employees with customer service and leadership skills. She seeks out candidates who are driven and attentive to detail.
She also likes team players and individuals who have "insight into self and others." She looks for job candidates who are capable of thinking conceptually and are flexible. To determine whether a potential employee has these critical skills she uses "in the box," "close to the box," and "outside the box" as a ranking system. "An in-the-box candidate would have all these skills," she says.
But she adds that these in-the-box candidates are in short supply. "We find that people who have these skills have solid succession plans within the companies they currently work. That's key. In general, companies want to attract people who are not necessarily seeking a job or those who are looking to use a different skill set in a new position."
Weinstein-Millson begins her search internally. "We have very strong succession plans that allow individuals to grow into the organization," she says. She goes outside the company when she can't find the skill sets needed internally.
That skill set is constantly changing. "It's different than two or three years ago and it's not going to be the same in five years," says Weinstein-Millson. "We have an approach that isn't perfect but that looks at the future state—the skills, knowledge and competency needed to support our organization." She says they continually review the skills and perform gap analysis to determine whether they can fill the posts internally or if they need to go outside the company. In the screening and hiring process, they continually monitor and refresh the skills on a regular basis. She also checks outside sources such as the Purchasing Management Association of Boston, PURCHASING and consultants.
Experience, education
Boston Scientific offers its employees a 12-week purchasing and supply chain certificate program it developed with Northeastern University in Boston. Eighteen people are currently in the program, which consists of a class that's offered once a week on-site at company headquarters in Natick, Mass. The class takes place from 4 p.m. to 7 p.m. so that employees use some of Boston Scientific's time and some of their own time. "The commitment level is there," says Weinstein-Millson. "We had more people than openings."
Leadership qualities is one reason Robert Kane, director of supply chain management for three divisions of General Dynamics, Falls Church, Va., likes a job candidate he recently interviewed. The individual is a graduate of the U.S. Naval Academy and has served in Afghanistan and Iraq. "He's an individual I can train in this function and he will accelerate to the top of the heap very quickly," says Kane.
In his time in the profession, Kane has seen "a fairly significant paradigm shift in the importance of supply chain management." While General Dynamics is an aerospace and defense company, Kane's organization supports a high-tech business. As such, he's had to recruit individuals with different levels of experience.
For example, General Dynamics uses third-party and off-the-shelf software in many of its products. The license terms are complex. "Our inability to negotiate the right set of terms and conditions could find us with a lien on one of our products," says Kane. "So, we've created a group that does just software licensing and we hired lawyers to staff it because they have the knowledge and sensitivity to Ts and Cs [terms and conditions] that a typical commodity manager wouldn't have."
Other experience deemed valuable by recruiters and purchasing pros looking to fill posts includes sourcing in China—that is, actually working in the country to qualify and develop suppliers. Still others seek individuals for top-level jobs who have worked as supply chain consultants.
General Dynamics recruits graduates from colleges and universities with supply chain management degree programs such as Arizona State University and Bowling Green State University. A graduate of Bowling Green, Kane likens the recruiting process to the farm system used by major league baseball. For the General Dynamics facility in Scottsdale, Ariz., Kane hires junior and senior students majoring in procurement and supply chain management to fill contract positions. In these posts, the students build meaningful experience by helping out with such projects as a recent Ariba software implementation across 20 locations. Upon graduation, he hires the most promising. "We have a very solid farm system that's built up through the procurement and supply chain programs at Arizona State," he says.
Arizona State was the site of a Career Forum last month for students in the procurement and supply chain program. At the event were purchasing professionals and human resources managers from such companies as Intel, IBM and General Mills. But these are not the only recruiting opportunities for the students and the companies looking to hire them. The department brings in one company per week to interview prospective hires, says William Carr, vice president of career development ISM/ASU, W.P. Carey School of Business, Arizona State University. Asked about the prospects for new graduates, Carr responds, "It's extremely easy for ASU students to find a job in procurement or supply chain management."
In addition to procurement and supply chain management degrees, recruiters and hiring managers are looking for individuals to fill purchasing roles who have received an education in finance or engineering. MBAs are also valuable. They also seek out those who have earned professional certification from such associations as the Institute for Supply Management.
Salary
Along with the demands, salaries have been rising as well, says Tonia Deal, president of Tonia Deal Consultants, Hudson, Ohio. The current job market, she says, "is truly excellent."
In her position, Deal sees services companies such as Royal Caribbean and Kaiser Permanente revamping their supply chain processes and seeking to hire qualified purchasing pros as a result. "The bar has been raised and raised and raised," she says. "There really is not another field that is looking for such diverse talent. Companies are looking to hire individuals with advanced degrees who have demonstrated accomplishments in strategic sourcing. Hiring managers want to see that these people have consolidated purchasing, reduced costs and rationalized the supplier base. I don't know of any other area as demanding today."
J.P. Canon has clients in the pharmaceutical and financial services industries that have hired purchasing professionals from leading edge, "best-practices" manufacturing companies and consulting firms, people who can bring a manufacturing discipline and new ideas.
"Over the past 10 years, we have seen a steady, market-driven increase in compensation for qualified purchasing professionals," says J.P. Canon's Rohan. "Six years ago, we placed a director of purchasing with a leading media services company in the New York area with a starting salary of $115,000, plus incentives. Today we are placing strategic sourcing managers and associate directors at higher salaries." He notes that clients are more focused on hiring the right skill sets and set of experiences and are willing to pay competitively.
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