Do you need a procurement team, or procurement done?

When costs rise, the reflex in a mid-sized business is to hire a head of procurement. Costs are rising. The CBI's quarterly Industrial Trends Survey in July 2026 reported manufacturers' average costs growing at the fastest pace since late 2022, with the share of firms citing internal finance as a constraint on investment at a six-year high. So the reflex is understandable.

But the board's real request is narrower than "build a function". It wants third-party spend under control, prices that stand up to a benchmark, suppliers that deliver, and fewer nasty surprises in the gross margin. Those are outcomes. A team is an input.

What a team actually costs

Start with the people. The CIPS salary guide's 2024 survey put the average UK procurement director at £113,200 and the average chief procurement officer at £162,628. Across all UK procurement roles, the 2025 edition produced with Hays reported an average salary of £54,576 and pay rising 5.75% in a year.

Then add what sits on top. Employer National Insurance went to 15% from April 2025, with the threshold cut to £5,000 per employee. Add pension, bonus (CIPS found 56% of heads of procurement eligible for one), recruitment fees, systems, training and management time.

An illustrative build, not a quote. One head of procurement at £95,000 and two category buyers at £55,000 each is £205,000 in salary. Employer NI adds about £28,500. With pension, bonus, a sourcing tool and a recruiter's fee, the first-year cost is comfortably over £250,000 before a single contract is renegotiated.

And you have to find them. Hays reported in 2025 that 58% of UK hiring managers had struggled to find the right procurement talent in the previous year. A six-month search followed by a six-month settling-in period means the first full year of savings often lands in year two.

When building is the right answer

Sometimes it is. Build a team when:

• Third-party spend is large enough, and complex enough, that category knowledge has to live inside the business year after year.
• A few strategic categories decide your margin and need daily management, not an annual tender.
• Procurement is tightly bound to product design, engineering or regulatory approval, and outsiders would spend most of their time catching up.
• You already have a strong head of procurement who needs capacity, not direction.

In those cases the fixed cost is justified, and the job of any outside help is to support the team, not replace it.

When you need it done

Plenty of mid-sized businesses sit in a different place. Spend is meaningful but spread thin. Nobody has looked at the tail for years. A few big contracts come up for renewal at irregular intervals. The finance director already owns supplier terms by default, alongside everything else.

Here the honest question is whether a permanent team would stay busy. Tendering the logistics contract, rebasing packaging prices and putting indirect spend on framework agreements is intense work for a year, then much lighter. A team sized for the peak becomes expensive in the trough. A team sized for the trough never clears the backlog.

Managed procurement fits that shape. You buy the work, not the headcount: sourcing events run, contracts put in place, savings tracked against an agreed baseline, and a small amount of ongoing supplier management afterwards. Cost flexes with activity. You get people who have run the category before, which matters more than it sounds, because the first tender in a category is where most of the value sits and where inexperience costs most.

And the trade-off is real. Knowledge leaves with the provider unless the contract forces it to stay. So insist on the outputs being yours: the spend cube, the supplier files, the contract register, the price benchmarks. If the arrangement ends, the next person should be able to pick it up in a week.

A £30 million business was about to hire a head of procurement and two buyers. Their spend was concentrated in five categories, so we suggested a fractional lead two days a week, supported by a part-time analyst. It delivered the savings for about a third of the cost of the full team.

A test for the board

Put two numbers side by side. The fully loaded cost of the team you would hire, over three years. And a realistic estimate of what it would deliver over the same period, net of what would have happened anyway. If the second isn't a clear multiple of the first, you probably need procurement done rather than a procurement department. Revisit the question once spend, complexity or ambition has grown enough to change the answer.

Many businesses end up with a hybrid: one capable internal owner who sets priorities and holds suppliers to account, with outside capacity for the heavy lifting. It is less tidy on an organisation chart and usually better value.