At the moment, the construction sector is showing unprecedented levels of activity.
The industry has announced the fastest rise in residential house building, the strongest for 12 months, pushing growth in the UK’s construction industry to a 7 month high. Moreover, the Markit/ CIPS UK Construction Purchasing Managers Index hit 59.9% in September 2015, up from 57.3% in August. But, residential house building is not the only growing sector. The commercial and civil engineering industries have also seen growth driven by; the high profile projects across the Rail and Nuclear sectors, the never ending requirement for the utilities sector to update and maintain their infrastructure, the new Highways program and the number of commercial new build projects that are going up all over the UK. This parallel growth across the sector brings a lot of challenges for companies as they compete to have the best procurement and supply chain talent on both client and contractor teams.
I have been part of the Investigo’s Procurement division for nearly 4 years, leading Investigo’s offering into the Property & Infrastructure Sector. As a business, Investigo tends to employ experienced consultants and encourages them to focus on becoming experts in their sector. This is vital for the Construction and Infrastructure Sector where the skills required from a P&SC professional are often very different from other sectors. This is not just the spend areas but also in the culture and stakeholder dynamic which can be quite unique.
One of the biggest challenges facing our clients in today’s market, is attracting the required talent. Contractors are having to deliver and maintain profit margin in a market where there is increased pressure on the supply chain, bringing about a rise in subcontractor spend. This leaves contractors needing to grow their supply chain function, but faced with a smaller pool of skilled staff to pull from. For example, the Rail and Nuclear sectors are essentially looking for similar types of people, so their challenge is to build balanced teams which combine the experience of procuring for large infrastructure projects within the utilities regulations and fresh talent to drive innovation and challenge the norm.
Contractors need to deliver projects on time and within budget in a market where margins are currently tighter than ever. This puts even more pressure on the P&SC function to build a supply chain that delivers on both cost and value. A failure to do so can have a very big financial impact and with so little room to play with, this will not only effect one job but the organisation as a whole.
The varying expectations of procurement across the construction industry makes attracting experienced P&SC professionals even more challenging. Some organisations demand full involvement from the bid stage to build the SC strategy, whilst others use procurement purely as a admin function.
This means that, when candidates are looking to change jobs, some of the key questions they are asking are: ‘how is procurement viewed internally?’ and ‘what level of influence and control will they have during the buying process?’.
A high quality P&SC professional can bring significant benefit to a project by reducing costs, managing risks and extracting greater value from the supply chain. But, someone with these skills will not be attracted to an organisation where their involvement is not encouraged at all stages of the project life cycle.
In order for clients in the sector to attract and retain the best talent in the market, they need to demonstrate a Supply Chain strategy that is dependent on the procurement input from the bid stage through to delivery.
As a recruiter in this market, my job is to know the clients and to understand how procurement is viewed and utilised in each organisation. This enables me to know and understand my client’s expectations in order to introduce them to the right candidates.
If you would like to get in touch with Adam, please contact him on firstname.lastname@example.org or 020 3009 3035.