CATEGORY MANAGEMENT FROM A RECRUITMENT PERSPECTIVE

Transcription

1 CATEGORY MANAGEMENT FROM A RECRUITMENT PERSPECTIVE Jigsa w Sea rc h is the c ountries lea d ing sp ec ia list p roc urement rec ruitment c onsulta nc y a nd ha s now b een tra nsa c ting in the Asia Pa c ific market p la c e for over 4 yea rs. In this time the Jigsa w Sea rc h tea m ha ve fa c ilita ted over 630 p la c ements in the niche segment of procurement and supply chain an average of 157 placements per annum or 13 a month. Roles Placed Since January 2007 by Capability Ea c h a nd every candidate s c ore skills a nd exp ertise a s well a s the d eta ils of the placements made b y the b usiness a re fastidiously recorded and core data is quickly c onverted into usea b le informa tion to enable our tea m to und ersta nd the ma rket a nd p osition the Jigsa w Sea rc h b usiness to b e better p rep a red to meet c lient and candidate demand. This report aims to share some of the key informa tion we ha ve ob ta ined over the last four yea rs a nd to give you a n insight in to some of the trend s that we a re ob serving and the dynamics affecting the category management sector of our industry. All of whic h ma y help a id your sup p ly c ha in rec ruitment strategies or help guid e you in your own career direction. The report is generated using the following data sets Candidates 3533 Companies 1935 Jobs Filled Copyright Jigsaw Search Pty Ltd 2010

2 Average Salary for Category Management across Industry Sectors Information taken directly from Jigsaw Search s real time salary guide Consulting Distribution Financial Services FMCG Heavy Industry Manufacturing Outsourced Services Pharmaceuticals Public Sector Retail Services Technology Category 3PL 117, , , , , , , , , , , ,000 Building Products 200,000 n/a 160,000 n/a 152, ,000 n/a 125, ,500 n/a 203,334 n/a Capital Works 160, , , , , , ,000 n/a 130, , , ,000 Clothing & Apparel n/a n/a n/a n/a 122,500 n/a n/a n/a n/a n/a n/a n/a Commodities 182,500 n/a 160, , , , , , ,000 n/a 174,167 n/a Components n/a n/a 150, , , ,044 n/a 140, , , , ,000 Contract Manufacturing n/a n/a n/a 120, , ,000 n/a n/a n/a n/a n/a n/a Corporate Services 144, , , , , , , , , , , ,744 Engineering 160,000 n/a 153, , , , ,000 n/a 151,667 n/a 159,036 n/a Facilities Management n/a 130, , , , , ,250 n/a 140, , ,238 n/a Fleet n/a n/a 137,500 n/a 139, ,000 n/a n/a 140, , , ,250 Ingredients 120,000 n/a n/a 152, , ,667 n/a n/a n/a 143, ,167 n/a IT 159,167 n/a 161, , , , ,500 n/a 148, , ,000 n/a Labour 143,750 n/a 144, , , , ,000 n/a 167,000 n/a 150, ,250 Marketing n/a n/a 144, , , , , ,667 n/a 155, , ,334 Merchandise n/a n/a 105, , , ,000 n/a n/a n/a 155, , ,500 MRO 151, , , , , , ,000 n/a 135, , , ,500 Packaging 220,000 n/a n/a 148, , , , , , , , ,500 Plant/Equipment n/a n/a 150, , ,167 n/a n/a n/a 130,000 n/a n/a n/a Print n/a n/a 144,000 n/a 142, , ,000 n/a n/a n/a 153, ,000 Prof Services 155,000 n/a 157, , , , ,000 n/a 205,000 n/a 172, ,000 Software 125,000 n/a 180, , ,220 n/a 165,000 n/a 150,000 n/a 150, ,265 Sub Contractors n/a n/a 200,000 n/a 146,667 n/a n/a n/a n/a n/a 90, ,000 Telecoms & Networks 125,000 n/a 155, , , , ,000 n/a 157,500 n/a n/a 153,584 Transactions n/a n/a 151,250 n/a 146, ,000 n/a n/a n/a n/a 150,000 n/a Travel 117,500 n/a 135, , , , ,500 n/a 160,000 90, , ,500 Utilities/ Energy n/a n/a 160,000 n/a 149, ,500 n/a n/a 140,000 n/a 173, ,000 The gaps in the ta b le a b ove ind ic a te tha t Jigsa w Sea rc h ha ve no rec ord of a ny c a tegory ma na gers emp loyed in the ind ustries shown, often ind ic a ting tha t these industries simp ly d o not have a need to emp loy c a tegory exp ertise for certain portfolios within their struc ture, or they ma y ha ve simp ly not invested in ma na ging the spend portfolio at a strategic level. Alterna tively their organisational charts may rep resent stra tegic sourc ing/ vend or ma na gement struc ture a s op p osed to the more p op ula r a nd p roven c a tegory management structure. From the data it a p p ea rs tha t Distrib ution (3PL) b usinesses seem to invest the lea st in c a tegory ma na gement, with pha rma c eutic a l a nd retail businesses a c lose 2 nd and 3 rd. This ma y b e a result of c a sh ric h businesses not seeing the imp orta nc e of c a tegory ma na gement or they ma y simp ly ha ve no interest in increasing the margin between sales and the cost of sales. Another interesting a sp ec t of the d a ta is in the c onsulting ind ustry, where the d a ta tells us that Mining, Hea vy Ind ustry a nd FMCG b usinesses are utilising p rofessiona l services across the MRO, Commodities and Packaging categories. We know from the ma rket that over the p a st 4 yea rs ma ny of the FMCG b usinesses ha ve merged a nd this would exp la in the d ema nd in p a c ka ging a nd c ommod ity driven experience to service sourcing and process integration. 2 Copyright Jigsaw Search Pty Ltd 2010

3 The strong d ema nd for b uild ing p rod uc ts a nd MRO categories would suggest a nd rec onc ile with our knowled ge that ma ny hea vy industry a nd c onstruc tion b a sed c lients have only just sta rted the journey of p roc urement from a c a tegory ma na gement a p p roa c h a nd tha t c onsulta nc y firms have played a la rge p a rt in developing the category platforms and procurement structures. Over the past 4 years Financial Services as with the Consulting industry has made the move from the fra gmented stra tegic sourc ing mod el whic h ma ny organisations emb ra c ed a t the sta rt of the d ec a d e a nd ha ve now hea vily invested in c a tegory management structures and employees. This trait has d evelop ed d ue to p oor results b eing rea lised in those more fra gmented mod els, within them the ma ke/ b uy/ sell stra tegy ha s b een d iluted a nd va lue delivery transcends to the SRM group. Tec hnology, La b our a nd Professiona l Servic es ha ve b een most in d ema nd a nd a premium has been awarded to strong candidates with this expertise. The next phase of fina nc ia l servic es evolution will b e to head towa rd s glob a l c a tegory management a s they a lign their mod els with their aggressive off shore a c q uisition policies. This glob a l fra mework is a lrea d y in p la y with ma ny of the glob a l resourc e business. As our d a ta a lso shows sub jec t ma tter dema nd wa s highest within tec hnolog y (ha rd wa re, softwa re & a p p lic a tions) a nd most p la c ements were tra nsa c ted within the fina nc ia l sec tor. The d river for this a p p ea rs to b e a result of ma ny fina nc ial institutions a c q uiring new b usinesses a nd req uiring in-d ep th p roc urement a nd technology knowledge to merge and leverage their combined operations. The wea kest d ema nd in c a tegory ma na gement wa s for c omp onents (va lves, b ea rings, wa shers) d ue to the ever growing move of b usinesses towa rd s the outsourcing/off-shoring of ma nufa c turing op era tions to low c ost c ountries. This has d irec tly a ffec ted the need to a p p oint p roc urement c a p a b ility, b ut ha s c onseq uently led to a n inc rea se in dema nd for Ca tegory Ma na gers (OEM a nd Co- Packing) within these FMCG and Technical Engineering sectors. As a n a sid e a nother trend in the Ca tegory Ma na gement rec ruitment ma rket ha s b een the inc rea sed d ema nd for long term c ontra c tors instea d of d irec t to permanent appointments. Recruiting Category Managers Of the 74 alloc a ted p osition titles within Jigsa w Sea rc h s uniq ue skills list, by fa r the most c ommon req uest for our servic es ha s b een for exp erienc ed Ca tegory Managers, 239 Placements or 39% of all of our placements are for this unique skill set. However a s this is often a rela tively new a sp ec t of rec ruitment within orga nisations a nd the engagement with rec ruiters is und erta ken b y HR not the hiring ma nager it is c lea r tha t ma ny rec ruitment op era tions fa il to und ersta nd the na ture of true 3 Copyright Jigsaw Search Pty Ltd 2010

4 c a tegory ma na gement a nd in turn fa il to get the b est emp loyees for their recruitment dollar. Evidence of this stems from the very fact that most of our placements in this segment are with customers with whom we have no panel relationship in place. This whic h mea ns tha t c lients ha ve ha d to break their own compliance rules, b y using a non-listed sup p lier (us) in ord er to ensure their b usiness c a n ob ta in the d esired level of p rod uc ts a nd servic es for the Huma n Ca p ita l Ca tegory of their business In other word s their p referred solution p rovid ers c a n not servic e the needs of the b usiness in c a tegory ma na gement a nd p roc urement so hiring ma na gers a re forc ed to fight their own HR p olic ies in ord er to ma inta in the level of c omp etenc e they need for their own departments! Demand v Supply Category Management (APAC Region) Total Procurement Candidates Registered 3533 (100%) Total Category Managers Registered 501 (14%) Average Annual demand for Category Managers 60 (1.7%) No of Category Managers actively available at present time 49 (1.4%) No of Category Mangers passive at the present time 249 (7%) As c a n b e ob served from the a b ove figures exp erienc ed c a tegory ma na gers a re in the minority within the APAC Region a nd it would b e fa ir to a ssume this trend is comparable with Europe and the Americas. As the figures a b ove show of the tota l c a nd id a te p ool of p roc urement p rofessionals only 14% constitute Category Managers whilst demand for this key skill set is at 12% of all jobs registered. As a rough guid e b a sed on these figures a t a ny one time there a re only enough a c tive c a nd id a tes with a skill set in c a tegory ma na gement to fill 81% of the markets requirement. This is of course a crude figure, but we should also consider the added c omp lexity of sub jec t ma tter a nd c ultura l requirements for ea c h role whic h ma kes the right candidate for the role even scarcer. From a wider macro level if we consider that unemployment levels in Australia are at rec ord lows hovering b etween 5-6% - within Ca tegory Ma na gement tha t figure is nea rer to 1-1 ½% with d ema nd rising a ll the time. Then ta ke into ac c ount the ma rket shift to emb ra c ing c a tegory ma na gement (p roc ess, knowled ge d ep th a nd c onsulta tive) a s a p referred mod el to a c hieve susta ina b le value to the b usiness a b ove tha t of p rojec t based stra tegic sourc ing (p roc ess a nd rea c tive) and it seems rea sona b le to a ssume that c omp a nies are going to struggle to fill their c a tegory ma na gement need s within their organisational charts from both a structural and expertise perspective. 4 Copyright Jigsaw Search Pty Ltd 2010

5 Category Management Structures in Australia As b usinesses tra nsc end ed from p urc ha sing to a round the turn of the c entury there wa s a la g b etween skill d ema nd a nd skill sup p ly. Ma ny c a nd id a tes ha d simp ly not b een exp osed to sourc ing p ra c tic es b efore a nd ha ve effec tively lea rnt on the job itself gaining experience and making many mistakes along the way. This lea rning p roc ess c yc le will a lso b e the c a se for end -to-end Ca tegory Ma na gement a s p roc ess d riven sourc ing exp erts a nd vend or mana gers a ttemp t to fill the plug between the demand for exp erienc ed c a tegory ma na gers and the supply in the market. The ultimate b enefit of the c a tegory ma na gement mod el is the wa y in whic h knits procurement in to the op erationa l fa b ric of the b usiness, c ementing the p roc urement func tion a s a n a rea of exp ertise. It d ema nd s grea ter sta kehold er tra c tion through in-d ep th und ersta nd ing of the ma ke/ b uy/ sell d ec ision ena b ling Ca tegory Ma na ger to further influenc e interna l d ema nd a s op p osed to just concentrating on price, compliance and risk. Below a re exa mp les of three of the most p opula r p roc urement d ep a rtment structures currently being utilised in Australia. Under Invested Fragmented Structure In this exa mp le the stra tegic sourc ing func tion is nea rly a lwa ys und erta ken b y the Proc urement Ma na ger, d a y to d a y governa nc e of sup p lier a c tivities is ma na ged b y the Vendor Managers and the purchasing activities are undertaken by the Buyers. 5 Copyright Jigsaw Search Pty Ltd 2010

6 Well Invested Fragmented Structure Within a more ma ture fra gmented struc ture tha t ha s ha d investment in sta ff the stra tegic sourc ing a c tivities a re und erta ken b y sp ec ia list p ra c titioners a s op p osed to the Procurement Manager in the earlier example Category Management Platform Organisa tions using the Ca tegory Ma na gement p latform use Category Managers to exec ute the full end -to-end p roc urement p roc ess. These p roc urement exp erts interp ret the stra tegic goa ls of the b usiness a nd its sta kehold er a nd c omb ine that with the sup p lier la ndsc a p e in ord er to d evise a c a tegory p la n for the p ortfolio of goods and services they control. 6 Copyright Jigsaw Search Pty Ltd 2010

7 They then ma na ge a nd exec ute b oth the sourc ing a nd vend or ma na gement activities becoming the technical product and service experts in the process. This a c tivity is then rep orted b a c k to the b usiness showing how stra tegic va lue ha s been added. Advantages of the Category Management Structure Sup p liers ha ve one point of c onta c t in b oth the negotiation a nd d elivery sta ges of the p roc urement c yc le whic h p revents them from renegotia ting their terms in the delivery phase rather than improving their performance. In this mod el the Ca tegory Ma na ger is a lso a b le to d evelop the rela tionship in line with future c orp ora te stra tegies a s op p osed to simply rea c ting to a n a greement negotiated by somebody else. Disadvantages of the Category Management Structure The ma in d isa dva nta ge is that the organisa tion is relia nt on one person for the entire delivery of value for each category, leaving them venerable if this person leaves. This is often c ountera c ted in la rge b usiness (a nd esp ec ia lly in retail), b y a lloc a ting assistant Category Managers or other types of category hierarchies. Category Managers - Career Positioning From the informa tion p rovid ed Jigsa w Sea rc h would a d vise c a nd id a tes to p osition themselves within a glob a l b usiness tha t emb ra c es the c a tegory ma na gement model, trying to lea rn or exec ute c a tegory ma na gement p roc esses a nd method ologies within a b usiness without a c a tegory ma na gement struc ture is a waste of your time and the wrong hire from the business perspective. Ta rgeting d ifferent ind ustries will d ep end on whether your d rivers a re sa la ry or security and so in turn would the category you develop your experience within. Fina nc ia l Servic es would d eliver the highest sa la ry when c omb ined with experienc e in tec hnology a nd p rofessiona l servic es, whilst interestingly 3PL seems to b e the only c a tegory tha t is in d ema nd a c ross every ind ustry segment. And this would suggest that c a nd id a tes with this exp erienc e would ha ve a b roa d er c hoic e of ind ustry when looking for a new role, whilst on the flip sid e sa la ries seem lower p rob a b ly d ue to the rela tive la c k of c ritic a lity to the b usiness a nd the wid er ra nge of potential c a nd id a tes with the b a se 3PL knowled ge (Logistic s Ma na gers, Tra nsp ort Ma na ger and existing 3PL category experts). 7 Copyright Jigsaw Search Pty Ltd 2010

8 In summa ry a s this rep ort ha s shown Ca tegory Ma na gers a re in short sup p ly a nd highly sought after in an ever-increasing amount of businesses. If you a re c urrently emp loyed within a b usiness whic h d oes not d ep loy a c a tegory framework with well invested headcount to deliver outcomes, you may run the risk of finding your skill set being obsolete in the coming years. However titles should not b e seen a s a b a rrier to p rogression a s a Proc urement Ma na ger within a $500m turnover b usiness ma y ha ve c onsid era b ly less resp onsibility tha n a c a tegory ma na ger in a $4 Billion turnover b usiness a nd will a lmost c erta inly be delivering less value and often earner less than the expert Category Manager. The key fa c tors in esta b lishing the va lue of c a tegory ma na gement within a b usiness is to und ersta nd whether the b usiness ha s or is investing in Category Ma na gement a nd then whic h c a tegories a re most c ritic a l to the profita bility a nd suc c ess of tha t business. Key Points to Consider Ca tegory Ma na gers a re effectively Proc urement Ma na gers of d efined portfolios of products & services Categories and goals are different in every business. Categories have phases of maturity and need different skills for each phase. Employers pay salaries based on the criticality of the category. Jigsaw Search s estimated mean salary for CM s is $130k. The best CM s add validated value to their employers. End to end Category Managers are always in demand. The best CM s collect category tools and techniques. The very best CM s know which of them to use and when. If you would like to d isc uss a ny of the a b ove further or would like a c c ess to our live online Sa la ry Guid e or our Ca nd id a te Sea rc h fa c ility or would like a ny other specific information or market data for you or your business, please us at info@jigsawsearch.com or call us on Sydney Melbourne Copyright Jigsaw Search Pty Ltd 2010