WELCOME TO 2017, THE YEAR OF THE PROCUREMENT CONTRACTOR
Welcome to 2017, the year of the procurement contractor. It seems that both private and public sector organisations across Wellington have had a collective lightbulb moment and are seeing the bottom line value of procurement professionals. Frankly, it’s about time. In the last few weeks, I have fielded numerous enquiries from both contractors and clients regarding the current market rate.
Historically, contracting rates have been steadily increasing year on year. 2017 has seen a stabilisation of rates and a sigh of relief from some hiring managers. Three market forces are driving the stabilisation. They are in no particular order:
• Election year – Rightly or wrongly, the possibility of a change of government creates uncertainty. Contractors rather than FTE positions give employers a degree of flexibility. Consequently, this has become a preference, and the increased number of contract roles available has helped steady contract rates.
• Restructures – Nothing new here. There seems to be a somewhat constant state of restructuring throughout many government organisations, and procurement appears to be one of the first cabs of the rank. This has pushed some candidates to consider contracting, when typically their preference would have been a permanent role.
• Financial year end – Budget restraints. What’s left in the tank?
So what is driving this stabilisation? In short, there has been a significant increase in the size of the contracting talent pool, but there are other factors at play.
THE FIRST FACTOR IS THE ALLURE OF THE HOURLY RATE AND THE FLEXIBILITY THAT COMES WITH CONTRACTING.
This year has seen a significant rise in permanent staff making the leap into the contracting market, as more contract roles have become available.
The second factor that’s contributing to the increased size of the talent pool is immigration. Seasoned procurement specialists are relocating back to New Zealand or emigrating from the UK and Australia for lifestyle reasons. These candidates are skilled procurement professionals and are eager to get their foot in the door of the Wellington market, many of whom are flexible around rate to get that prized first gig.
Below is a benchmark guide for common roles within Procurement. Areas that include rates are a guide only and are based on a three-month contract within government:
PROCUREMENT DIRECTOR:
There are a limited number of these professionals and positions available in the Wellington market. $1200 per day is typically required to gain interest from the right candidate.
PROCUREMENT MANAGER – STAFF MANAGEMENT:
Again, there has not been a huge demand for these positions in Q3 this year, but a spike in the new government financial year would not be surprising. The added responsibility of staff management and probity responsibilities justifies an increase in hourly rate.
SENIOR PROCUREMENT SPECIALIST:
This is the category most affected by the factors discussed above. Demand has increased significantly for candidates at this level, but as has the supply of suitable talent. Current rates are firm on $100 – $110 per hour.
PROCUREMENT SPECIALIST:
Historically this has always been a small talent pool, typically because candidates have been in permanent positions with 4-6 years’ experience under their belts. There has been a slight rise in the number of candidates who are open to contracting at present. Again, the allure of the hourly rate contract and the prospect of organisational restructures causing uncertainty in positions at this level.
PROCUREMENT COORDINATOR:
To attract a coordinator with some exposure to generalist procurement functions, $30 – $35 an hour is a standard rate. Employees can try to pay less, but they will unlikely live up to expectations.
So what will Q4 bring? The only major external factor I see influencing hourly rates (potentially causing an increase) is the recent legislative change to withholding tax requirements for contractors. That aside, demand for hourly rate contractors should be steady for contractors until June.
SHARE
