Exclusive Trusted Magazine Q&A with Sergii Dovgalenko , Head of procurement, consultant, tutor, book author, procurement process architect
Why are so many colleagues not pursuing professional procurement certification?
As a Fellow of CIPS (FCIPS), I’m asking this question to sense-check my earlier decision to become a member of CIPS (MCIPS), then a Fellow, and then a Direct Associate (a Tutor).
The answer may reside in the job market. I asked Chat GPT to provide a generic assessment across 1,000 procurement job ads and define the portion of those requiring professional certification.
The following result may not be 100% correct statistically, but it coincides with my “gut feeling”—not more than 40% of new positions require professional certification. In most ads, such certification is a nice-to-have requirement; perhaps only 10-15% of ads make it mandatory.
This observation assumes that most employers are prepared to delegate spending budgets to people who can demonstrate relevant experience and skills but may lack an appropriate educational background. This article investigates the potential root causes of such a situation. It represents the author's subjective view and does not pretend to provide precise answers.
In his conclusions, the author will employ some familiar economic theories to be considered less subjective.
Information asymmetry
The employers and potential candidates represent the classical situation of information asymmetry, where one party in a transaction has more knowledge than the other. This creates an imbalance of power that can lead to inefficiencies or unfair outcomes.
Indeed, firms may only guess as to the true capabilities and virtues of their prospective employees.
To mitigate the risks of information asymmetry, employers conduct a thorough screening process, where another exciting but controversial theory can be applied – the theory of signaling.
Signaling Theory
This theory suggests that education and professional certifications act as signals to employers about a job seeker's qualifications.
Firms can only easily recognize the more productive workers by hiring them and finding post-factum, leading to residual risks and costs and increased attrition.
Signaling theory says that, in pursuing more education, people who know they are more capable thereby send a signal to potential employers that they are the more capable workers.
Those are so-called costly signals, as obtaining a certification can involve time, money, and effort, Education, therefore, may segregate the low-productivity workers from the high-productivity (more educated) ones. Firms favor the latter because firms know that the high-ability workers will likely be those with additional education.
Possible route causes of limited applications of the signaling theory in procurement
Mechanistic requirements
Burns and Stalker defined "mechanistic management systems" as suitable for stable industries as early as 1961. These systems are highly hierarchical and marked by the precise definition of member functions. However, organic systems are more appropriate for changing industries and are characterized by fluid definitions of function and interactions.
This theory reminds me of “mechanistic” requirements for procurement candidates, where niche industrial experience prevails over a solid educational background and vast skillset, and domain knowledge is more valuable than 360-degree vision and best-practice awareness.
Unfortunately, despite multiple testaments to value generation and agility, procurement in some firms may still not be perceived as an “organic” profession.
The Value of Practical Experience
The value placed on practical experience raises some doubts regarding traditional certification. While certifications denote a standardized level of knowledge and commitment to the profession, the hands-on experience of navigating real-world procurement challenges is often perceived as more telling. Firms frequently prioritize candidates who can apply theoretical knowledge effectively in practical scenarios.
This preference underscores the importance of redesigning certification programs to bridge the gap between theory and practice. These programs should incorporate case studies and simulations, which my training audience always expects and highly praises in the course postmortem.
The lack of competence framework
I used to work for or consult many firms where procurement needs the basic competence framework if not JDs. Therefore, their candidate requirements concentrated on domain experience and technical skills rather than educational background and professional development.
This problem can be systematic, and separate research is needed to determine its extent. Perhaps that’s the single aspect of procurement's limited functional maturity in many companies, where colleagues operate without a strategy and basic frameworks beyond corporate governance.
Consultants as role models
In my multiple encounters with top-tier consultants, I didn’t find many holding professional designations but still presenting themselves as subject matter experts. Where procurement isn’t sufficiently developed or empowered, they enter the scene as custodians of best practices and domain expertise.
Since consultants are welcomed at executive floors and act as role models, the C-level appreciates consultancy experience over professional education and accolades.
Colleagues unwilling to invest
We can blame employers, consultants, or anyone else, but no one stops us from investing in our development. I have encountered rare instances of my subordinates pursuing self-development through professional certification. Still, most of them have been dragged into the path of additional education by company programs and management initiatives. There are many possible explanations for the Prospect Theory alone, e.g.,
Loss Aversion: People tend to be more sensitive to potential losses than potential gains. The fear of failing the exam or not seeing a significant return on investment might deter some from pursuing certification.
Present Bias: People often prioritize immediate gratification over future benefits. The delayed gratification associated with potentially higher future earnings due to certification might not motivate some individuals to invest the time and effort upfront.
Overconfidence Bias: Some professionals might overestimate their existing knowledge and skills, believing they don't need formal certification to succeed in their careers.
In summary, my experience as a decorated procurement professional is mixed. It hardly helped me in job contests, while the risk of being treated as overqualified is apparent. On the other hand, I gained the credit of trust to speak at events, teach, and mentor, which I sincerely admire.
I still hope that my costly signals will get the recognition they deserve. Otherwise, why all the hassle with the professional certification while getting rejection letters at the same pace as when you were just a reasonably experienced candidate with no honors?
The link to my blog : https://ukrsedo.blogspot.com/
The link to my book : https://www.koganpage.com/logistics-supplychain-operations/the-technology-procurement-handbook-9781789662108
Sergii Dovgalenko https://www.linkedin.com/in/sergiidovgalenko/
