From Francisco Contreiras
Soon after I joined multinational corporations, I got the advice that there isn’t such a thing as ‘the company’ but, instead, there are ‘people’. This meant companies are made of individuals, with their values and behaviors and not an agglomerate of abstract concepts.
With 10+ years of experience in both consulting and in the global telecom industry, I realized there is more to it… turns out it’s not just about people, it’s also about context.
Understanding what context is about
Recently, I saw a job posting that advertised the role & responsibilities, but also included a comment regarding working conditions, like fun office environment, fresh free food and laptop, tablet & smartphone from iconic brand, for both company and personal use.
Company's sourcing decisions, especially around indirect sourcing areas (ex. IT, Telecom, Facilities, Travel, Fleet, etc.), influence company’s ‘context’ with direct impact in employer's brand perception.
As an example, in recent months, I found myself bragging to friends, on how cool it is to work for a company that has a mobile app that allowed me to book my business travel hotel needs directly on my smartphone (i.e. no number to call, no VPN, no extra login, no laptop, etc.) and manage the booking directly with no need to wait for travel agency confirmation.
How companies drive indirect sourcing decision making
After joining procurement, I found the most precious words around are: Suppliers, Quality and Savings. I understand that business needs to have clear targets to drive efforts in a certain direction, but limiting the perspective to savings or quality can significantly narrow the impact that indirect categories can have to improve an employer’s brand perception and / or employee engagement. Picking on my previous mobile hotel booking app example, such a tool can have a tremendous effect in having engaged business travelers.
As a recommendation, business leaders should create some ‘tension’ by mixing financial & people KPIs, like ‘savings %’ together with ‘Company Glassdoor rating’ or other employee engagement KPI. This way, we ensure that reaching company financial targets is not jeopardizing employee engagement levels. In short, the goal is to find a balance between both.
Are Millennials any different?
Yes, they are. Although oversimplifying it, I will split this into three main social trends that most impact indirect procurement
- New behaviors towards disintermediation & sharing economy
- Increasing awareness on resource scarcity leading to responsible consumption
- ‘Enhanced living’ becomes a reality with the latest innovative technology breakthroughs
Disintermediation & sharing economy trends
With the growing mistrust on traditional institutions (ex. financial crisis, Brexit, etc.) we might find employees that don’t want their salaries and pension funds being managed by traditional banking methods and would prefer to get paid with PayPal or bitcoins, as an example.
With the will to share vehicles (ex. Uber) and homes (ex. Airbnb), companies need to keep their sourcing decisions, like company car benefits relevant to employees (ex. Nokia call for innovation on benefit cars) but also allow employees to choose hotel or ‘home experience‘ in their business travels.
The future workforce is coming more from freelance work. Millennials look for more meaningful lives by avoiding full time jobs. With that in mind, companies need to be able to create and distribute isolated work packages through crowdsourcing platforms to access this new talent pool.
The microlearning trend is allowing Millennials to build ‘T’ shaped curriculums, as they prefer 3 minute mobile training videos instead of formal face-to-face training programs that last weeks, months or even years (ex. MBA) impacting indirect professional training services sourcing decisions.
Responsible Consumption
With today’s ‘unlimited’ access to information, Millennials are more aware of global resource constraints, and for that expect more from their employers in terms of sustainability targets. They demand more supply chain transparency, which may impact the approach to logistics and how to balance costs vs. environmental pressures. It's also expected that the very latest technology evolutions are being applied in today’s business workplace (ex. solar energy, zero water WC systems, etc.) and this equally applies to company benefits (ex. electric car fleet).
This generation is driven by purpose, and social shame from non-responsible businesses is a clear no go when picking their next job.
‘Enhanced living’
For the most junior positions, we are now recruiting a ‘touch-first’ generation. So why do we keep giving them traditional laptops with a mouse based UI? We can now have the computing power of a laptop in a single smartphone device (ex. Microsoft Continuum, Samsung DeX). IT hardware and applications categories need to evolve and adapt to millennials user experience expectations. Otherwise there is the risk of companies looking old fashion and outdated (ex. voice, Virtual Reality, Augmented Reality).
Automate redundant tasks with virtual assistants that organize our crowed and complex lives so that work feels more meaningful and by doing so, having more engaged employees.
Introducing biotechnology (ex. exoskeleton, nanobots, organ printing, etc.) could increase the pressure on traditional medical insurance, driving the need for innovation in the way companies protect employees and their families.
Finally, this oversimplified approach from Millennials and impact on indirect procurement is a first take on identifying opportunities for sourcing innovation while keeping companies relevant to their employees. Nevertheless, Gen-Z (aka Post-millennials) is around the corner, so this effort for companies to adapt and evolve must continue indefinitely.
Check out companies call for innovation in Open Ecosystem Network challenge section…
Francisco Contreiras
Strategy Analyst @ Nokia
linkedin.com/in/fcontreiras/