Welcome to procurement game changers. The podcast for procurement leaders that make a difference. Today, our podcast will talk about how to attract university students to procurement as a career choice.
And to answer that question, I have the immense pleasure to receive Alejandro Basterrechea. I hope I did that right. Head of Procurement Excellence and Corporate Services at Zalando, Europe’s leading online platform for fashion lifestyle.
Alejandro is a seasoned procurement leader with deep expertise in indirect procurement. Welcome to the show, Alejandro.
Hi, Hélène. Thank you very much for the invite. A pleasure to be here.
So Alejandro, can you tell us what led you to procurement?
Yes, sure. When I was in the university. I was studying Engineering and I did an internship in a manufacturing company.
And I started in supply chain operations, typical for an industrial engineer. And by doing the internship, I got in contact with the procurement team.
And actually I liked the people working there a lot that I decided to extend my internship and move to the procurement department. And since then I never left procurement.
So I guess that once a buyer always a buyer. And now 17 years later, as you mentioned, I’m heading Procurement Excellence at Zalando.
Wonderful. So, you know, you’ve been procurement for a while and you’ve seen procurement changing. And now new technologies are helping organization to automate the more transactional tasks and focus on more strategic ones.
Procurement groups can now devote more time to building relationships with internal clients and suppliers, but it also mean that the profiles that are needed in procurement are changing.
So how do we attract talents? How do we ensure we have enough candidates for the procurement careers and how do we keep our talents? That’s what we’re gonna talk about today. So let’s get started.
What is changing in indirect procurement that is impacting the profiles you need?
Yes, I believe procurement has evolved in the last 30, 40, 50 years, right? From a mostly transactional back office function to a more strategic role and nowadays even leading some of the, uh, functions within different industry. So it has been evolving over time.
Now in some companies, very advanced procurement organizations are being seen as an ally to the business, as a core function to drive not only bottom line, but also top line growth, for example. So that has changed.
That’s evolved over time. Additionally, if you look at the globalization, right, at the complexity of supply chains, how everything is more integrated, not only financially, but also logistically, this has an impact, of course, on organizations like procurement.
Also if you look at the spend, right, depending on the industry, the spend with third parties might be between 30% to even 70, 80% of the total revenue, right?
So this has an immense impact on cost, on how you drive cost, on how you drive profitability and therefore the attention towards procurement has increased over time as well.
In addition, I would say in the last 10 to 15 years, of course, technology and the fast pace of digitalization has enabled procurement to become more strategic while keeping the more transactional piece more efficiently thanks to technology.
It also has forced us to become more customer-centric, more data-driven and therefore new skill sets, but also new mindsets are required. And this is what we’re talking about today, right? So how do we get into one of the sources of talent in terms of skills, but also mindset?
So where do you find these new resources then? (Procurement)
Yes, I guess, like any other organization, you have the more classical channels, right? Either by having a good branding of a company branding, right, that people applying to your jobs.
I think what has changed is that you need to make the job profiles attractive so that people not only understand what the job is, but actually what is the culture, the environment that they’re gonna work with, you need to make that attractive.
You’re competing against many other companies, but also many other functions that might want to acquire similar skills in the market. Right? So this is, let’s say one element that has also evolved.
So it’s going to the same channels, but with an attractive proposition. I think that the second element of course, head hunters, let’s say executive search, but even in that market also has evolved over time.
Because also procurement now due to new skillset, you are also looking into data scientists, digitalization, experts and so on.
So you’re actually looking into recruiting into areas where other functions are recruiting, like technology, IT and so on. So even the head hunter piece has to evolve also with the function.
But I believe and coming back to the topic of today, there is untapped potential in university for procurement, especially at master and MBA degrees Because these are people who already have experience, let’s say professional experience.
They are doing their second degree and they might be looking to change their career, right? And this is where procurement have an opportunity to acquire the talent that maybe in the past was working in banking or in insurance companies or marketing agencies, whatever industry they were before, and really believe with their skill sets and their past experience, you can bring them into procurement, of course, give them the skills that they need to perform as a buyer, but with their already knowledge they have, right?
Whether it’s an analytical skills in the finance sector, or they bring soft skills because they were in sales, or they already have a strong contractual background because they’re lawyers.
So whether they are, and whatever they did, I think can be adapted to the procurement on commercial roles, but also technology roles. Right?
So people that maybe were software developers and wanna have more contact with the business. Procurement could be a nice area where they can continue develop, let’s say their IT skills, but in a different environment. Right?
So promoting procurement as a career choice, as a really interesting career choice for people that maybe didn’t start in procurement, I think it’s untapped potential. And therefore getting closer to universities is, I think, a key element for organizations.
So you mentioned that they don’t have the skills, so you need to get them to procurement. So indeed those new professional are not formally trained in procurement or supply chain.
So, how do you get them up to speed when they come to your procurement groups?
I do believe they bring some of the, let’s say, basic skills that any procurement professional needs to have, like analytical skills, commercial acumen, strategic thinking, let’s say certain soft skills, like people at the end procurement is quite a people business.
So how you deal with difficult situations, how you understand your internal customer and so on. So there are some basics, right, that I believe whether you were a psychologist before, a lawyer, a marketer, sales, whatever function you did in the past, you might bring some of these skills already.
What we need to do on top is how do you use that skill set and convert it into the purpose of a buyer, right? So it’s about repurposing the role of what, whatever previous skills they bring into their new role. Right?
And these are different things. I think a strong onboarding process, but this is even important for people who are also buyers and coming to your organization.
So I think an onboarding process that gives the people, let’s say, the understanding of the role, what it’s our purpose what is the impact that we, as procurement bring, how to manage your stakeholders? So any way you have to do this. So I think this is a good starting point.
Secondly, of course, how do you develop the people with certain specific skill sets within procurement, like negotiation trainings, today? I mean, let’s say, in the last two years, I’ve seen the development into, for example, how to do online negotiations. Right. We see a lot on the computer.
It’s not so interpersonal, like in the past. So also that has developed how you prepare a negotiation, how you carry out a negotiation virtually. So all of that, you can also develop a development program for buying professionals and also include the people who maybe were not buyers in the past.
And, but I think also on the job, right? So mentoring, coaching is something that has also getting more attention across companies, cross-collaboration. You can also let’s say, certified people, let’s say, in scrum, in agile and so on.
So there are different elements that you need to combine and develop any way for your teams. But then now include an aspect of how you bring somebody who maybe did know that in the past. And with that, they will transform themselves into a strong buyer.
Anyway, we always said that diversity is a strength for teams. So I imagine that there are other benefits to have people that are not formally trained in procurement anyway.
No, absolutely. I to say, absolutely. And we’ve seen that already. Let’s say, at least in our organization, if I look at our teams, not everybody is, let’s say, a buyer from nature, right?
So we now have people coming, for example, from direct procurement to indirect, that was in the past, not so attractive, now you see more.
So people that were in manufacturing, in procuring commodities now becoming indirect buyers because they see the chance to expand their, let’s say, their view on procurement from very specific to a more broader view. So that is one element.
We see also people coming from our functions, people that were stakeholders before. They work with us and they understand, okay, this is actually a very cool function. I have access to different elements and they wanna wider the scope.
So we also are now being attractive within the company. And the third part, of course, being attractive outside the company. Right.
So how do you bring people? We’ve seen that, for example, in marketing space, right? People that we’re working for, a marketing agency as sales that may become buyers on the other side of the table, because they wanna explore different views on the industry. So I think it’s possible.
I think we’ve seen it. it’s getting more and more because now I think procurement is more open to a diverse group of people and bringing different knowledge and that enriches the whole organization.
So it comes to the next question I have about, you know, within indirect procurement, you have that category that’s professional services or intangible services.
And what you’re just mentioned is that getting people who were from the other side of the table can really bring value when they have to buy now the services. Correct?
Absolutely people that, for example, I experienced in my past, I think in one of the organizations I worked for, the senior sourcing manager responsible for external workforce was previously working for one of the top contingency workforce organizations. So he understood the industry, the price schemes, the different factors, the regulatory elements, right, that every country has on contingency workforce.
So that person, even if [he] was not a buyer by profession, understood the commodity from inside out, right, from maybe a different perspective. Joining our team at that time, it was about just understanding how he can use his knowledge, his skills to shape it into a buyer role. Right.
And take advantage of that knowledge and, let’s say, experience that the person had. So this is one, one example, right, on how to do it.
Yeah, no, I agree. And I think, we have the same experience with consulting being former consultants is definitely helping because you understand how to drive to scope, how a project is unfolding and how it’s priced, which is probably the most important in that sense.
Exactly. Understanding cost drivers, understanding the impact that it has on the specific industry that is less tangible and so on. Absolutely.
Yeah. So what can we do as procurement leaders to change the status quo
Here? I would say I would start with the mindset. Also leadership needs to let’s say evolve with the, let’s say, rapid evolution of procurement to a more strategic role. So also I think it starts from the top.
Having that mindset that you wanna have and take advantage of a, let’s say, a more diverse pool of talent whether it’s coming, as I said, from a function from other industry, but especially now from universities to really make sure that you just don’t hire always the more experienced buyer that has only done buying.
There are good talents there as well, so I’m not criticizing that, but I would open my mind to other sources. And as I mentioned, I think universities, especially on the master and MBA degrees is untapped potential. Myself, I’ve been trying to promote procurement in the universities in Berlin.
And I’ve seen the reaction of people that never thought procurement could be a career choice for them. Because they understood that being a psychologist or a lawyer didn’t make sense for them.
But once they understand what procurement is about, what mindset you need or skills you need, actually they say: “I bring, I would say most of them, I just need to, let’s say, learn one or two things and actually seems quite exciting to do that”, for example. Right.
And I see the feedback after, when I present the topic, I’ve seen people then joining actually procurement organizations afterwards, right. Because they felt they wanna test it. So I’ve seen an effect of that.
So I think start from the mindset leadership, being able to open its mind, to new sources. And there are also additional sources, right? The whole startup world, right.
People going into startups, maybe they do that for two years and then they wanna move on to a more established organization.
So there’s also untapped potential there, because you have people that have gone through a more agile world, who have gone through a more pragmatic hands-on approach.
And you also wanna have that mindset in your organization. Right? So also this is another area where I would look into that – if I would recommend people listen to the podcast – is also looked into that, right.
They might not necessarily be the seasoned procurement professional, but they might bring mindset and skillset that you don’t have in your team because they have experience something different.
So what would be kind of the first step? So we say, yes, we’re gonna explore universities, MBAs, et cetera, but from a practical standpoint. How do you do that?
Well, I was always recommend, let’s say, to start small, but start immediately. I mean, 80% today is better than 100% never. So I would, if I give you an advice is, for example, get in contact with your local university.
This is basically what I did, right. Contact the two, three people there. They’re always very welcoming to have companies or functions presenting to their students. So they’re always [like] these kind of things.
They do a lot of network events and they invite companies as well. So it’s a good chance to get there, get to know some students understand what the students of today are looking for. And also, they do a lot of recruiting events.
So there’s also a chance to position the company, to have the one conversation with students that would like to apply to such jobs. I’ve done the three of them.
So presenting the organization, going into network events and going into, let’s say, recruiting days and all of them have helped us to get in contact with this.
And then universities keep you up to date right? They give you feedback. Look, they were not so interested in your company because this or this or that, or the roles were too senior to junior.
And it gives you the feedback or the input to adapt and, let’s say, organize better next time and so on and so. This is how I would start. So I think this is a more pragmatic approach.
Yeah. Sounds like it. So if there was like one takeaway, one thing that you want our listeners to keep after the podcast is over, what would that be?
Well, I would say there is a war on talent. It’s getting very tough to get the right people with the right skillset and also the right mindset. So the only takeaway that I would say is we, as procurement, as an organization, we need to think outside the box as well.
We need to become storytellers. We need to sell the purpose of procurement. What’s our impact? Why are we an attractive function to people from different backgrounds, right, different experience? And especially that we have a huge impact right there on the bottom line side, on the top line side. We enable growth, we help on the EBIT.
And we are an international and diverse group. Because as a procurement, you need to be in contact with different people, from different parts of the world. Nobody sourced from one country only. So it’s one of the most international functions that exists in a company and therefore it is attractive.
And therefore we need to think how we attract those talents, because it’s not only a competition between procurement organization in different companies.
But actually different functions within one company going to the same talents. And therefore we need to step up and become that attractive function that recruits the best of the best.
Yeah. Or in other words, us, indirect procurement leaders need to become advocates for our function inside and outside the organization. Well, now it’s your turn to tell us about your experience and your challenges in the comment section.
Don’t forget to subscribe if you want to be notified when the new episode is coming up. Thanks for listening.
Thanks, Alejandro for your participation. That was extremely interesting.
Happy sourcing to everyone and bye.
Bye bye. Au revoir