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Purchasing is Dead. (And Other Conspiracies.)

July 25th, 2007 · by Tim Minahan · 4 Comments · skills rectruitment and development

As proof that you can’t believe everything you read, the U.S. Bureau of Labor Statistics reports that overall employment for purchasing and supply managers is expected to “grow slower than the average for all occupations through the year 2014.”

What?

  • Don’t tell that to the VP of Procurement and Operations at a Massachusetts-based manufacturing company I met with last week. He was griping “I can’t find people with the right talent fast enough.”
  • Or the U.K.-based procurement executive that worried that his veteran team lacked the skill set required to compete in today’s global and technology-proficient marketplace: “Many of our [supply management] team have been doing purchasing a certain way for decades. They are uncomfortable with adopting new processes and systems. I am concerned about driving adoption.”
  • And certainly keep it a secret from the hordes of CPOs that have sounded the alarm on talent poaching occurring in their ranks.

In fact, in a recent study of top purchasing and supply management executives, Aberdeen Group outright refutes BLS’ claims, reporting that ” top CPO’s rank recruiting, training, retaining, and aligning their organizations as their #1 goals.” (Download a free copy of the full report here.)

BLS’ errors don’t stop there. The government agency goes on to wrongly report that “demand for purchasing workers will be limited by improving software.” On the contrary, every recent study on supply management employment trends reports that technical skills and experience implementing, managing, and using procurement and supply management software are among the most in demand. (Listen to Professor Joseph Carter of Arizona State University and the Center for Advanced Purchasing Studies’ views and advice on the supply management talentissue.)

Pulled from 2004 assessments, the overview makes working in a salt mine seem more attractive than joining the purchasing ranks. (Although, BLS is positive about working conditions for purchasing employees, stating that “most work in comfortable offices.”) Case in point: the agency’s stats for purchasing compensation is also way off the mark when compared to recent annual salary surveys from ISM and Purchasing magazine. See comparison in table below.

Click image to enlarge.

average salaries chart.jpg

BLS’ assessment is not only wrong, it casts the entire purchasing and supply management discipline in a bad light. (And just as the C-suite is beginning to recognize the critical importance of the function.) With the purchasing getting such a bad rap as a career choice, the talent crunch in this sector will only get worse.

What can you do? In addition to improving your recruitment, training, and retention approaches, write or call the Bureau of Labor Statistics and demand they correct this egregious mistake. The agency has a special “hotline” set up to field “complaints concerning information quality.” And, when it comes to their 411 on purchasing there is a serious quality issue.

Lodge your complaint via e-mail: dataqa@bls.gov. Be sure to identify the information quality issue (see above), how it is negatively impacting your organization (ditto), and provide references on how the data can be improved (double ditto).

Your action can help secure the continued growth and enhance the profile of the purchasing and supply management profession.

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4 responses so far ↓

  • 1 Tim Cummins // Jul 25, 2007 at 1:24 pm

    There are many ways to look at this data - isn’t that always the case? But I have to tell you, I do not share yoru view that the BLS forecast of declining numbers is wrong; nor do I see this as in any way connected with a decline in status or pay.

    In summary, I would say that there will be more top jobs available - but overall, the numbers employed in traditional purchasing, procurement and supply management roles will decline.

    It is clear that automation and offshoring will take their toll of many lower level jobs. At the same time, the role becomes more strategic and complex because of the need to manage outsourced and global relationships. Hence the issue over skills and resource availability.

    Procurement is not alone in having to face a new world. Similar challenges face groups like Sales, Marketing, Project Management - even lawyers! Repetitive and structured work can be done in new ways and new places. What remains is far more ‘tacit’ (to use the term adopted by McKinsey).

    More generally, this topic cannot be disconnected from the wider questions of corporate organization. Today’s functional structure - and the threat to jobs - means that we see increased in-fighting over roles and empowerment. But as the old functional model breaks down, how exactly will the new teams be formed? Probably multi-functional teams supporting specific projects and processes. But quite what that does to professional roles and career paths remains to be seen.

  • 2 Tim Minahan // Jul 25, 2007 at 1:38 pm

    Thanks, Tim. As always, you provide a scholarly insight into practical business issues.

    While we rarely disagree, I must reiterate my stance that the BLS report fails to reflect the reality of the purchasing and supply management job market.

    Benchmarks from Aberdeen or Purchasing magazine or ISM (and even IACCM), all rate hiring and retaining skilled talent among the top challenges of the supply management discipline today. They also cite that the introduction of supply management software has actually increased the need for new skills and hiring.

    BLS cites this as a net reduction in the demand for purchasing employment. This is wrong. (Particularly when you consider that we’re on the cusp of a major demographic shift with a large portion of the purchasing workforce getting set to retire.) Instead, we are talking about a shift in work type and skills required to support this shift.

    Specifically, as supply management gets more strategic as a discipline, the types of activities supply managers are performing are becoming more strategic. Not to sound too Alvin Toffler here, but we are shifting from an era where purchasing professionals focus on transactional activities (such as reviewing and processing this mound of reqs on my desk) to one where supply managers are tasked with more strategic responsibilities, such as scenario and risk analysis and relationship building.

    This “Supply Management 2.0″ era demands the hiring (or training) of new skills. In the near term, the purchasing function is in a talent shortage mode — not, as BLS claims, a below average hiring mode.

  • 3 Charles Dominick, SPSM // Jul 26, 2007 at 9:57 am

    Tim,
    A great topic to tackle. Thanks for alerting me to it. You may be surprised by my opinions and analysis of the report at

    http://www.purchasingcourses.com/2007/07/read-yesterdays-purchasing-blogs-dont.html

    Keep up the great work!

  • 4 E-Sourcing Forum: the source of information and best practices in strategic sourcing // Jul 30, 2007 at 5:23 am

    [...] My friend, Tim Minahan (yes, he’s my friend even though he has made some poor career choices), found a concerning study - which he pointed me too last week. His discussion on topic is very insightful and includes comments from Tim Cummings of IACCM, which offer an insightful, yet, contrarian viewpoint. [...]

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