PASA Report: Shock lack of negotiation skills in procurement


Shock lack of negotiation skills in procurement

At PASA’s CPO Forum, interest was voiced about developing negotiation skills of procurement teams to drive business results. As a result of such keenly expressed interest, PASA has actioned our entrepreneurial spirit and produced a report based on research conducted in conjunction with Dr Matt. Lohmeyer & Dr R. Andrew Bean of Negotiation Partners.

* How well does the procurement industry negotiate?
* How common is negotiation skills training?
* Do executives actually negotiate or are they solving problems?

A total of 308 executives from across Australia and New Zealand participated in the PASA study to benchmark negotiation preferences across procurement, sales and senior management.

Knowing that negotiation skills are essential for procurement and supply professionals, this study is crucial to identify the nature of the challenge we face as an industry, benchmark preferences and highlight where the industry skill gaps are. To add value to our organisations, we must raise our game.

Key findings of the PASA study include:

  • Most executives over-estimated their ability to negotiate effectively – some dramatically so. Almost a third of participants rated their organisations “8/10” for negotiation ability, even though fewer than 6% prefer to use negotiation techniques to gain agreement.
  • Almost 40% of those surveyed have never had any negotiation skills training and a similar number last attended a 2-day (or longer) negotiation skills program more than two years ago. That means the majority of executives in the industry are either self-taught or were last coached a long time ago.
  • Senior managers have started to focus on negotiation skills in the last 12 months, as evidenced by a much higher rate of training uptake, compared to their more junior colleagues.
  • Most executives studied do not actually negotiate, even when they think they are conducting a negotiation. Much value and opportunity is lost through a lack of skill and a focus on only one or two problem solving techniques.

The procurement profession is over-estimating its ability to negotiate effectively. We have a way to go in recognising negotiation skills as a key professional requirement – and that begins with a greater understanding.

Put a stop to losing value and opportunity through lack of negotiating skill.


About Author

Procurement and Supply Australasia (PASA) is the leading provider of information and education to procurement and supply professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, awards, plus various community and network building activities. PASA is a trading name of BTTB Marketing, for many years recognised as the leading producer of conferences and events for the procurement profession in Australia and New Zealand. Whether producing under the BTTB, CIPSA Conferences or now PASA brands over the last ten years, our events have consistently led the market in terms of both educational and networking opportunities.

1 Comment

  1. A great partnership between legal and procurement teams can be the first step in addressing this issue. Getting a detailed understanding of key contractual levers and risk points from their legal colleagues empowers procurement professionals to engage more actively in genuine negotiation with suppliers.

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