Why knowledge retention is key to securing the future of Procurement 

The procurement industry is experiencing a period of high staff turnover and fluctuation due to economic instability, changing labor demographics, and advancements in technology and artificial intelligence (AI). Next to job cuts and general talent shortages, technology is also changing the required skill profiles for procurement professionals.  

Knowledge management is critical to ensure organizational resilience in this changing business environment. This article explores the underlying factors contributing to the knowledge retention challenge and explains how a digital solution like Cirtuo can help organizations proactively guard against knowledge loss by maintaining critical category and supplier information and knowledge. 

3 reasons for an accelerated loss of procurement knowledge 

Three key factors currently contribute to the increased risk of losing critical knowledge in procurement departments. 

1. Job cuts 

Nearly half of US companies expect to lay off workers in 2025 due to economic struggles, industry-specific challenges, organizational restructuring, and technological advancements. The federal government is also laying off around 200,000 workers, many of whom are expected to work in procurement. This development is not unique to the United States. Earlier this year, the UK government announced the dismantling of NHS England, and many other countries are also eying opportunities to increase efficiency in public procurement. Job cuts pose a serious risk as institutional knowledge and expertise in specialized procurement areas like categories or about supplier relationships are often lost when staff members leave. 

2. Labor and skills shortages

The procurement industry is struggling to attract and retain talent. According to the Deloitte 2023 Chief Procurement Officer Survey, 70% of companies said talent acquisition and retention was their most significant internal risk. This challenge has not disappeared since. Reasons for the limited availability of skilled talent in developed countries include demographic shifts as older employees retire, high resignation volumes during the COVID-19 pandemic, and preconceptions of procurement as an “unattractive” career choice among graduates who don’t fully understand the profession. Skills shortages mean that available positions often take a while to get filled, and new staff members must rely on stored information to get up to speed. 

3. Technological advancements and AI

The increased availability of digital tools and AI is changing the procurement skills landscape. As companies increasingly use technology to automate transactional processes, procurement professionals' roles shift to focus more on strategic tasks. Their day-to-day responsibilities increasingly require them to have the skills to work with data and use digital tools confidently. Due to these changes, existing job roles are evolving or disappearing, amplifying the impact of job cuts and labor shortages on the procurement industry. As the profession evolves, preserving expertise is critical, especially as tech can leverage this information down the road. 

Digitizing knowledge to increase organizational resilience 

By proactively capturing and storing critical procurement knowledge around categories and suppliers, organizations can prevent the loss of crucial expertise during periods of high employee turnover. With Cirtuo, companies can create a centralized information repository and standardize their content and processes, increasing organizational resilience when team members fluctuate. 

The benefits of using Cirtuo for knowledge management include:

• Faster onboarding: A centralized information repository enables new employees to get up to speed and make informed decisions quickly, avoiding costly mistakes and ensuring strategic alignment.
• Auditable decisions: A clearly documented and approved strategy ensures the rationale and motivation behind the selected strategy can be audited and reflected upon when new team members join or the business environment changes.
• Increased collaboration and knowledge sharing: Cirtuo enables knowledge sharing across departments and teams to ensure critical information isn’t siloed or lost when employees leave or roles change. 
• Lower risks: Knowledge retention helps identify and mitigate risks by preserving lessons learned from past experiences. 
• Consistent supplier relationship management: With Cirtuo, supplier relationships are documented and can be seamlessly transferred to new team members.
• Increased innovation and automation: Information documented in Cirtuo can be used to train AI and further automate processes.

Proactive knowledge retention with Cirtuo

Procurement departments face enormous challenges in retaining institutional and tribal knowledge as organizations lay off staff members in the face of economic uncertainty, demographic changes amplify skills shortages, and AI and tech challenge established organizational structures. In this business environment, capturing and making knowledge easily accessible is crucial to ensure critical expertise isn’t lost, supplier relationships can be maintained, and business objectives can be supported. Cirtuo can help organizations retain their category and supplier knowledge and make this information available across procurement. Talk to us to find out how other businesses have improved their process governance and knowledge management with Cirtuo.