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The Impact of The Great Resignation on Procurement

The world—and the workplace—is evolving rapidly, and with changes comes shake-ups within procurement and beyond. One of the shifts we’re seeing today is the Great Resignation, which is transforming the workplace (and isn’t going anywhere anytime soon). 

Since this trend of workers resigning en masse is here to stay, inherent risks come with this change. We’ll explain those risks—specifically those most closely related to procurement and the supply chain—and offer you expert advice on how you and your team can best navigate the Great Resignation.

 

The Great Resignation and Procurement Today

Investopedia defines the Great Resignation as “the elevated rate at which U.S. workers have quit their jobs starting in the spring of 2021, amid strong labor demand and low unemployment as vaccinations eased the severity of the COVID-19 pandemic.” The Great Resignation is having a significant impact on procurement and well beyond the United States. We will look at the main issues and discuss how—amid the onslaught of departures—you, as a procurement professional, can influence more spend with the same effort and support the team you still have.

 

Cost of Replacing Procurement Professionals

The process of sourcing, recruiting, and onboarding a new hire can drain a company’s resources and finances. It’s a costly endeavor, and it can be even more expensive if a new hire doesn’t stick around. This is true for all industries, not just procurement. 

To give you a more concrete idea, a study from The Society for Human Resource Management (SHRM) reported that, on average, replacing a procurement professional can cost a company upwards of six to nine months of that employee’s salary. Factor into that equation that it reportedly takes 36–42 days to hire an employee in the U.S., on average, and six months for a company to recoup the cost of a new hire. This is currently resulting in a perfect storm that ultimately costs a company from one-half to two times an employee’s salary to replace them.

 

Staffing Impacts

As companies struggle to fill roles within a market where workers are in high demand due to scarcity, many firms have been left to operate understaffed. After all, demand doesn’t stop just because the staff is dwindling. But it affects productivity and volume, which we see directly in procurement due to staffing shortages resulting from the Great Resignation and an ongoing pre-existing talent shortage.

According to Gartner, 52% of procurement leaders have seen their procurement staff decrease substantially over the past two years. This is having an immense impact on areas like transportation. For instance, in 2021 the truck driver shortage reached 80,000 and is expected to grow to 160,000 by 2030. Due to the lack of drivers and high customer demand, we are seeing ongoing supply chain disruptions. 

 

Doing More with Less

As a result of the mass exodus of procurement professionals, companies’ remaining employees have now been tasked with what can feel like mission impossible, at least until more team members are found (and sometimes long-term). And they still have to get it all done, even operating with a skeleton staff. Simply put: We are learning that doing more with less is necessary.

 

The Procurement Talent Shortage in 2022

More issues arise as we now face a massive talent shortage in procurement in 2022. Along with the Great Resignation and a talent shortage, many skilled workers are reaching retirement age. Enterprises are losing decades of sourcing knowledge and need to replace seasoned talent with newer procurement talent. 

Despite retirement becoming a recent concern, procurement’s talent shortage is not a new issue. It has been ongoing for years, but things seem especially dire now. 

Just how bad is it? According to a Korn Ferry report addressing this situation, statistics show that by 2030, more than 85 million jobs could go unfilled simply because there just aren’t enough skilled workers qualified to perform them.

It’s not all bad news, though. Far from leaving you to contemplate our current procurement predicament alone, Arkestro can help you and your procurement team succeed. This includes showing you how to keep your colleagues motivated and strong amid any upheaval.

 

How Can Arkestro Support Procurement Teams?

Most businesses have witnessed firsthand how much technology revolutionizes how we do business. This includes how technology can help influence more spend with the same effort and make the best buying decisions faster across all spend. Arkestro is the solution.

How do you influence more spend with the same effort? We combine machine learning, human behavior science, and game theory to help you find the right supplier, at the right price, right now.

With Arkestro’s embedded procurement platform, there is no software to install, complicated and frustrating user training, and no login for suppliers.

The time to act is now. According to Anthony Klotz, who coined the term “the Great Resignation,” “We are not going back to the world of work in 2019,” and “these new changes are here to stay.”

Contact us today to find out how you can move forward, not back, reducing your procurement workload, speeding processes, influencing more spend, and making the best buying decision faster.

Want to learn more? Join us for a webinar at 10 am EST on October 5th, 2022: “The Great Reset: Taking on the Global Challenge to Find Procurement Talent?” Save your seat here.

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Rob DeSantis

Founder

As a former co-founder of Ariba running sales, Rob has deep expertise in the procurement space, having helped propel Ariba from zero to $250 million in revenue in four years and IPO of the year in 1999 before its acquisition by SAP a decade later. In addition to co-founding Ariba, Rob was also an early angel investor and board member of LinkedIn, the world’s largest professional online network.

More recently, Rob served as an investor and advisor to a small portfolio of companies including Bloom Energy, AEye, Inc., HiQ Labs, Agiloft, USEND and more. He is also a co-founder of Dibbs Technology and TrueParity. Rob holds a BSME from the University of Rhode Island.

Marty Meyer

Chief Financial Officer

A trusted partner and advisor on the executive team, Marty has a unique background having been the CFO of nine venture backed technology companies. Marty has raised over $300M in venture funding and has closed six strategic M&A transactions with a combined value of over $1B. Marty has deep domain expertise in ecommerce, consumer internet, networking, data security, data privacy, media technology and enterprise software industries. Marty is especially experienced in the finance and operations activities of SaaS companies and is driven by data and metrics to help create outstanding customer experiences and drive efficient growth.

Neil Lustig

President and Chief Operating Officer

Neil is a seasoned executive with over 30 years of experience leading and building teams in Tech. Neil brings insights from a variety of market spaces and company sizes. Most recently Neil was the CEO of GAN Integrity, an innovative SaaS Compliance technology company serving enterprise customers in North America and Europe. Before that Neil was the CEO of Sailthru, a leader in ML driven personalized multi-channel marketing communications for media and e-commerce markets. Prior to that Neil was the CEO of Vendavo, the leader in B2B price optimization and management for large enterprises. Before Vendavo, Neil led the commercial team at Ariba, the market pioneer that defined and created the eProcurement space. Neil served as the GM of Ariba Europe and subsequently the GM of Ariba North America. Neil started his career at IBM where he spent sixteen years, initially as a software developer, and then twelve years in a variety of Sales and Marketing roles

 

Neil has a BS in Computer Science and Applied Mathematics from SUNY Albany. He is a native New Yorker, Brooklyn born, and still resides with his wife and three children in New York City.

Bonnie Adams

Director of People Operations

Bonnie is a People Operations and HR veteran, with over a decade of experience establishing successful people and culture functions for early to mid-stage tech startups going through high growth phases. She has a passion for supporting and creating inclusive and collaborative work environments and is well-versed in driving positive changes in her organizations as a trusted leader. Prior to joining Arkestro Bonnie worked as the People & Culture Coordinator for Ionic Security, helping them scale from 5 to over 200 employees in addition to a $120M funding round. Most recently she was the Head of People & Culture for blockchain innovator Storj Labs and was the Director of Human Resources at PrizePicks, the largest independently owned Daily Fantasy Sports platform in North America.

Arym Diamond

Chief Revenue Officer

Arym Diamond joined Arkestro in January 2022 bringing over 20 years of experience in the enterprise software and consultancy industry.  He is responsible for the worldwide go-to-market revenue strategy. Prior to Arkestro, Arym was Chief Revenue Officer at CalAmp focused on Telematics and Logistics. He also served as the area vice president of North American Sales within the Salesforce.com Enterprise Business unit for Einstein Analytics & AI, where analytics and machine learning were re-imagined for the front office.  Prior to that, he spent over 10 years at Oracle in various sales positions. Arym holds an MBA from the University of Southern California Marshall School of Business, and an undergraduate degree from California State University.

2022 Gartner® Hype Cycle™
for Procurement and Sourcing
includes Arkestro.

2022 Gartner® Hype Cycle™ for Procurement and Sourcing includes Arkestro.

Gartner® Hype Cycle™ are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

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