As we embark on the recovery from the biggest global crisis in most of our lifetimes, current recruitment activity, often seen as a key barometer of economic health and confidence, suggests that there is evidence that the Procurement and Supply Chain world is in a stronger position than many other sectors.
The associated technology and consulting markets are in rude health by comparison to much of the wider economic landscape and there is genuine optimism that things will continue to improve. This is because the profession is at the heart of how companies will solve the challenges created by the events of 2020.
Despite a large proportion of Europe being in various forms of national or regional lockdowns, the early signs in 2021 are that the job market for the sector is remarkably busy already. A significant number of software vendors and consultancies are actively in the market for staff. In the case of the vendors, the main demand is for revenue generation roles such as sales, presales and customer success, whilst the demand in the consultancy market is driven by a thirst for people with transformation experience usually including the implementation and adoption of digital procurement tools.
In their report into the UK jobs markets published in early January KPMG and The REC reported that: “UK recruitment consultancies recorded a renewed rise in permanent placements at the end of 2020, thereby ending a two-month sequence of decline. That said, the rate of growth was only marginal. The upturn was generally attributed to increased business activity and an improvement in market confidence, partly due to recent vaccine news, which led clients to press on with previously delayed recruitment plans. However, there were also widespread reports that the COVID-19 pandemic, renewed lockdown measures and uncertainty over Brexit had dampened growth of permanent hires.”
The activity in the market in January suggests both an improvement in demand in early 2021 and that procurement and associated technology markets are amongst the most robust professional job markets. Using the KPMG vacancies index to assess sector by sector activity, two of the three fastest growing permanent job markets are technology and financial, which supports our theory to a degree without giving specific data on the particular niche sectors that we are focusing on here.
So how did we get to a stage where the market is so busy, so quickly bearing in mind that hiring markets largely ground to halt for large parts of the second and third quarters of 2020?
Knowing how many tech vendors faired last year against their revenue targets and also how their sales varied over the course of the year, we believe there is evidence to support the theory that the Covid pandemic has, and will continue to be, a catalyst for increased digital transformation of procurement and supply chain in a number of industries. We look into more evidence to support this theory later in this report.
Before that, let’s reflect on a brief summary of the market conditions in 2020 that illustrate just how much things have changed:
Q1 – The first quarter of the year was actually quite a flat hiring market in the procurement tech sector. 2019 had seen many organisations significantly increase headcount whilst enjoying strong market conditions but with Brexit uncertainty still in the air, there was a degree of caution around hiring with companies generally focusing on getting the best from existing resources.
Q2 – The implications of the Covid pandemic hit Europe and the lockdowns began. Companies are in survival mode and professional job markets cease to operate as priorities are elsewhere. As we head into May and June we start to see spikes of activity as companies focus on business critical hires that can’t wait any longer, but the overall market is still incredibly quiet.
Q3 – Spikey activity continues but professional recruiters are largely struggling for work, whilst internal recruiters become fearful of job security. Most moves are being done through existing personal networks, for example, ex-colleagues as these feel safer for both parties and don’t incur any recruitment costs. There are some exceptions as the strongest software companies seek to hoover up talent in a less competitive market. Some companies start to adapt to hiring over Teams/ Zoom. The core Procurement professional job market is one of the better professional markets but the solutions providers largely remain quiet with a few notable exceptions.
Q4 – The job market gradually starts to improve despite redundancies taking hold in certain sectors, particularly for companies who were either struggling prior to Covid, made bad decisions in the pandemic or their market died, often for reasons beyond their control. However despite all that overall activity steadily improves with confidence returning, possibly due to vaccine hopes. For many businesses, there was also a realisation that things had to change and the answer for many lies in increased or better use of technology. That is why December was the busiest month of the year and the signs in Q1 of 2021 are that we have a remarkably busy hiring market.
So are companies feeling bullish about their prospects in 2021 because of the nature of what digital transformation in procurement and supply chain can deliver for organisations? It would appear so and would correspond nicely to the theory that more is expected from procurement and supply chain functions in challenging times.
This article is an excerpt from our Procurement & Spend Management Insider Report for Spring 2021.
If you would like to discuss any of the points raised, please email firstname.lastname@example.org.