It goes without saying that everyone wants to be fairly compensated whilst being provided with opportunities to further develop their skills. I’ve explored this debate, read on to find out where the challenges lie.
Great Expectations
What happens when there is a misalignment between salary expectations and perceived skill sets, and ultimately the value you bring to an organisation?
Research suggests that in Procurement, the salary bracket that demonstrates the largest chasm between skills and salary expectations is between those seeking or wanting to pay £50-70,000.
Why? Post Covid wage inflation and the cost-of-living crisis means that jobseekers are wanting to secure up to 20% more salary yet haven’t advanced their skills to warrant such a rise. With Employers NI increasing as well as the National Minimum wage following the recent budget, Employers are really having to drill down on skills assessment when hiring to ensure value for money.
Employer vs Employee Perspectives
What recruiters should be doing to help bridge the gap to secure more successful outcomes? Here are my thoughts from both sides.
Employer Stance | Common Scenarios
- “They aren’t worth the salary they are asking for” Often, this means that candidates were not able to evidence the skills required for the role in enough depth during the interview to give the employer confidence. Equally, the interviewers may not be appropriately trained on how to interview, or the format wasn’t right to facilitate getting the right responses.
- “We don’t have the budget to pay above the bracket we are advertising for even if we wanted to meet their expectation and believe they are worth it” Understandably, every business has a budget or some form of grading system for their roles. Two things to consider here are: how do they compare to the skills matrix you have for this level of role? What can you do by way of overall on-target earnings (OTE) if the base salary is fixed? Whilst salary is important, candidates will consider their overall OTE and benefits package when making decisions. Depending on the generation, different parts of a package will carry different weightings, with Gen Z favouring net pay versus Gen X favouring pension contributions.
- “They aren’t stronger than people we already have in the business who are paid less.” How do you know? What are you benchmarking this against? Is there any subconscious bias at play here? Often, the real reason for this scenario is a result of internal employees being given incremental rises versus the cost to employ someone from outside of the organisation. Retaining and developing your talent is critical to ensure they don’t leave to secure a pay rise elsewhere. Give them a reason to stay!
- “I don’t think their soft skills are strong enough or there isn’t a cultural alignment” What soft skills are needed for the role? How have you tested this at interview? Have they actually met the stakeholders they will be interacting with by way of a chemistry test? This is often the case of subconscious bias and a lack of diversity training within the organisation. Too often, people like to recruit in a similar guise to themselves as it feels safe/comfortable. By deploying behavioural profiling as part of your interview process that specifically measures the behaviours required for the role itself, this would be eliminated.
Employee Stance | Common Scenarios
- “My current company has counter-offered me more money to stay” This is a common scenario whereby people test the market to see if they can secure a pay rise and stay put for more money. If your motivation to engage with the market is purely financial, our advice is to speak to your employer first about your pay and reward and put a business case together to justify why you feel you should be paid more. If an agreement can’t be reached, only then should you explore the market.
- “I know the market is paying X for my level of role and this is what I want” Just because roles are being advertised at a certain level or bracket, does not mean that you as the individual applying will be offered a role at that level. By securing more salary, this often means more responsibility and pressure in your role, and you therefore have to be able to demonstrate the requisite skills and competencies to justify being paid at the very top end of the bracket. Just because an organisation CAN pay X, doesn’t mean they will pay YOU X.
- “My colleague is paid more than me for doing the same job. I don’t feel valued where I am” This is a contentious one as lots of bias could be at play here and you may not have all the information as to why. Just because two people perform the same job, does not mean they perform it to the same competency level and drive the same outcomes for an organisation. However, it is your job as the employee to challenge appropriately. How? Provide a list of competencies and a skills matrix for the role in question and plot yourself on there. Look at your skill gaps and ask what training can be provided to support you. Don’t forget, your development is also down to you, so take advantage of podcasts, online training, and anything you can be doing to drive your value and enhance your skills.
So How Do We Bridge the Gap?
How can organisations and you as individuals bridge the gap between skills and salary in procurement?
Employers:
- Ensure interviewers are appropriately trained to assess candidates at interview and ensure the format facilitates the outcomes of what you are testing/wanting to see.
- Consider behavioural profiling for different role types you have in order to eliminate bias. Behaviours for a Supplier Relationship Manager will be different to a Buyer, for example.
- Consider overall OTE when putting packages together for different role types.
- Create a competency matrix for each job role performed within your function.
- Create training modules that encompass hard and soft skills.
- Combine in-sourced and outsourced training and review and measure its effectiveness. Are your people becoming more competent and productive as a consequence?
- Review pay and reward annually and consult external benchmarking.
Employees:
- Ensure you are coached on how to interview both from a technical skills perspective and a behaviours perspective to ensure you can demonstrate your value.
- Consider your true motivations before exploring the market. Speak to your employer if you genuinely feel you are underpaid.
- List out the competencies and behaviours for your role and plot yourself against them. Go to your employer and ask what training can be provided to enhance your skills.
- Take advantage of any free training/advice that is out there for your own self-development. Podcasts and LinkedIn are rich sources of information for developing yourself.
Salary Vs Skills in Procurement | A challenge you don’t have to face alone
Choose your partners wisely
Recruiters are often criticised for driving wage inflation up as their reward structure and how clients are charged are often based on the base salary the candidate secures. By partnering with a reputable recruitment consultancy that specialises in your sector/discipline, you will be able to gain live market insights and data to support our advice as well as a pricing structure that is not fixated on salary, but more on the process and methodology we adopt to source and evaluate talent for organisations.
We’re here for YOU
When you want to talk about the skills in your Procurement team our consultants are here for you. We are proudly committed to delivering recruitment as a professional service. Arrange a call to find out how we can help you develop your skills, grow your team and assess the true value of your Procurement function!
Procurement Heads is part of the Heads Resourcing Group, encompassing HR Heads, Procurement Heads and Executive Heads. Whatever your business needs, our talent trilogy will ensure you thrive
