Public Sector Procurement has evolved. Here’s our perspective on some of the trends and issues shaping how organizations recruit for this crucial function.
Procurement in Public Sector is a crucial function. This is both because Public Sector organizations have large, complex amounts of spend, and also because that they’re spending taxpayer dollars. For expenditure of Public funds, fairness and transparency are key.
But over the past few years, the function has evolved to add new layers of strategic value, taking queues from other highly-regulated industries like Financial Services. More Public Sector organizations are undergoing Procurement transformations, finding ways to use centre-led Strategic Sourcing models to save more taxpayer money, deliver more efficient services, and build values like environmental and social responsibility into the process.
At Argentus, one of our main lines of business is Public Sector recruitment, particularly for Procurement roles. Over the past 18 months, we’ve made many Public Sector Procurement placements with organizations such as the City of Toronto, Waterfront Toronto, Canada Post, and others.
So today, we want to use some of that recent experience to shine a spotlight on Public Sector Procurement: How has the skills profile changed? What challenges are companies experiencing in their recruitment efforts? How are their sources of talent, and recruitment practices, evolving to keep up with the latest in the function?
Read on to find out!
First: What counts as “Public Sector” in Canada?
- Government organizations. This includes the three levels of government: municipal, provincial and federal.
- “Broader Public Sector” (BPS) organizations. These include other organizations that receive taxpayer funding, but aren’t direct government bodies. They include a range of health care and educational institutions, as well as federal and provincial crown corporations (for example CN Rail, Canada Post, Canada Pension Plan Investment Board, University of Toronto, Metrolinx, Greater Toronto Airport Authority, University Health Network, etc.)
What’s the difference between Public Sector and Private Sector Procurement?
Classically, the biggest difference between Public Procurement and Private Procurement has been the importance of Broader Public Sector Procurement guidelines. In short, governments and BPS organizations have an elevated level of ethical responsibility compared to their private-sector counterparts. Because they are buying goods and services using taxpayer dollars, Broader Public Sector (also known as BPS) organizations have a legal obligation to provide fair, transparent and competitive Procurement. This means additional steps and documentation in the Procurement process, as well as additional rules for expenses and perks to make sure that employees are conducting Procurement in an ethical manner.
Historically, this has led to a focus on “fairness” as the main goal of Public Procurement, as opposed to cost savings, building supplier relationships, or innovation, which have been the traditional focus of Private Sector Procurement.
Of course there is overlap here — BPS has always directed Public Procurement to try to get value from the process, even if it wasn’t the main focus. And Private Sector organizations, especially those accountable to shareholders, want to be competitive and open in their Procurement process. That being said, “fairness” vs. “cost savings,” were the traditional lines of demarcation.
But this is changing.
Over the past number of years, many Public Sector organizations have become more strategic in their Procurement. While fairness and transparency are still the bedrock of Public Procurement, organizations have realized that they can build competencies to use Procurement to improve cost savings, build long-term relationships with suppliers, mitigate long-term risk, and find opportunities for innovation. In other words, the traditional focus of Private Sector Procurement has bled into Public Sector Procurement.
As Rosslyn Young, VP of crown corporation Metrolinx, said in our interview with her last year: “knowing the public procurement process is now table stakes…what I want to know is, how can you support your clients to get the best contract, with the best understanding of commercial drivers?”
This evolution has some big implications for hiring, and the skills Public Sector companies are looking for. Traditionally, most aimed to hire mostly from Public Sector backgrounds. Now, many are drawing on well-developed Strategic Sourcing talent pools in highly regulated industries like Financial Services and Insurance, broadening the scope of candidates.
“Many organizations still require Public Sector experience,” says Rosanna Palermo, an Argentus’ Partner who has made many high-level recent placements for Public Sector Procurement roles. “That being said, some have evolved to look at private sector experience as well, recognizing the strategic contributions that centre-led Strategic Sourcing models have made in other industries.”
Newcomers are Also Broadening Talent Pools:
Another development is that more Public Sector organizations are looking to international talent pools, even for those without Canadian experience, to fill their Procurement roles. This tracks with the broader importance of newcomers to Canada’s supply chain industry, to fill the considerable talent gaps companies are facing. Many of these organizations are finding newcomers well-equipped for the Canadian marketplace, with transferrable skills from overseas.
“I would say many Public Sector organizations recognize international experience more than ever,” says Palermo. “Before, it was ‘no way.’ Some of these candidates have Procurement experience with sophisticated Public Sector organizations overseas, but others have strong Indirect Procurement experience in Private Sector service industries.”
Salaries Remain a Challenge:
Salaries remain a perennial challenge for hiring in Public Sector, and searches for Procurement are no different.
The issue isn’t that public sector pays less — in fact, many Public Sector roles are very well-compensated. It’s that pay bands tend to be more rigidly defined, and that can make it harder to be responsive to changing salary expectations depending on the marketplace. Many salaries are governed by collective bargaining (such as many Buyer or Procurement Specialist roles at the sole contributor level), which makes them less flexible than the Private Sector. Even if those salaries are very competitive—as they often are—it’s hard for organizations to adjust compensation to compete for talent, the way companies can in the Private Sector.
“Compensation is very good for many Public Sector roles,” says Palermo. “But organizations can’t be as creative in their compensation. They can’t add signing bonuses, vacation, car allowances or other additional compensation to help pull in the right candidate. All in all, it creates fewer incentives for candidates to move, compared to the Private Sector.”
Public Sector organizations are making considerable headway attracting candidates, especially millennial and Gen Z candidates who tend to prioritize mission and social impact in their careers. But the rigidity of compensation can make it harder to pull candidates out of other “competing” Public Sector organizations.
These are just a few of the main trends and issues we see in recruitment for Public Sector Procurement. If there are any we missed, or you want to highlight, either in your own hiring or as you build your career, let us know!
A big thanks to Argentus Partner Rosanna Palermo for her contributions to this article.
And if you’ll indulge us, we’d like to highlight some kind words about our own Public Sector recruitment efforts. Here’s what Sandra Lisi, Director of Purchasing Client Services at the City of Toronto, had to say about her recent recruitment experience with Rosanna:
“Rosanna was instrumental in our recruitment needs for procurement management staff. Candidates presented were well vetted and suitable for the positions. We were successful in recruiting 3 management personnel who have the subject matter expertise, experience and personalities that align with our vision and path forward. She clearly understood our needs and was able to present us with candidates within days of connecting. It was a pleasure to work with Rosanna on this recruitment. Her knowledge, expertise and network make her a key partner in our strategic recruitment needs.”
So if you have any hiring needs in the Public Sector, or want to chat about what we’re seeing in the marketplace, reach out to Argentus today! Call 416 364 9919 or send an email to firstname.lastname@example.org. We’d love to chat.