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How much is enough?
The 2005 PMAC/Purchasing b2b profile and salary survey
By Lisa Wichmann
Who hasn’t—during a particularly bad day at work—muttered the timeless words: “they’re not paying me enough for this.” Once the crisis has past, however, we usually settle back into the rhythm of the job, for the most part content with our lot.
But the issue of compensation is a valid one. We all want to feel our value is fully appreciated. And we all have families to support, mortgages to pay, vacations to plan and cars to maintain. So the question is, how much is enough?
You can use this salary survey as a guide, but keep in mind the results represent averages, gleaned from 345 respondents across the country. Your salary will likely be higher or lower than the reported levels, but it should be somewhat within the range. This year, the average purchaser is 46 years old, with 18.5 years of experience. The average salary is $68,870—a 4.4 per cent increase over last year.
Albertans are raking in more money, once again posting the highest average salary: $73,220. Industry makes a difference too, with natural resources purchasers earning the highest pay: $86,670.
On the totem pole, vice-presidents make the most ($84,975), followed by materials managers ($75,370). Men make an average $72,100; women make an average of $61,450. That’s a 17% difference. What’s troubling is the gender gap seems to be getting bigger, not smaller. (In 2004 the difference between salaries was lower at 15.9 per cent, and in 2003 it was 13.4 per cent.
C.P.P./a.p.a. (Certified Professional Purchaser) accreditation and PMAC (Purchasing Management Association of Canada) membership clearly boost purchasing salaries. In general, the higher the level of PMAC membership, the higher your salary, especially once you pass Level 2.
How big is the purchasing purse? Respondents report an average personal volume of $19.8 million.
What does it mean?
The good news is salaries have continued to climb from last year. That bodes well for average purchasing professionals, who clearly are pleasing their bosses and making a solid contribution to their companies. But if there was ever a time for complacency, this isn’t it. Purchasers are standing at a crossroads—one direction continuing through familiar territory, and the other boldly branching away.
“What we’re seeing in company after company is a separation of the purchasing tasks or activities into those that are strategic and those that are tactical,” says Paul Larson, a professor of supply chain management at the University of Manitoba’s Asper School of Business.
“So in the future of purchasing, there certainly is room for people to pretty much operate exclusively in the tactical world. But at the same time, the new opportunities or the higher profile opportunities are in the strategic world, at seats in the corporate boardroom.”
According to Larson, there’s a continued blurring of the lines between purchasing and supply chain management. Suddenly, purchasing people have bigger roles to play in their companies, and more responsibility.
“They’re networking with more people within their organizations and with their suppliers. So it’s certainly broadening the outlook one has to have,” Larson says. “And I think, particularly among students, as well as professionals, there’s a lot of excitement about this.”
In future surveys, this evolution may reflect in higher compensation packages, bigger spend ranges and executive-style bonuses and incentives.
A great example of a purchaser who has gone from tactical to strategic is Ken Verge, senior procurement officer with the Province of Nova Scotia. After graduating high school, Verge decided to get a jump on his fellow classmates by booting it to the unemployment office. Among the available jobs was printing operator, and purchasing.
He got an interview and landed the purchasing job. That was 31 years ago.
He started out on a clerical level. Today, however, Verge is more of a consultant for other buyers at the Province, and for suppliers as well. He sits on the board for Catholic school construction with engineers and high-level provincial managers. Together, they hash out building ideas, plans and procurement. His day is also spent taking calls from colleagues at the province, offering advice on policy.
What’s his philosophy? “I’m very accessible,” Verge says. “We deal on a very fair and open system. I never have my voice mail on…So if anybody has any questions or concerns they can bring them to me and I can resolve them or one of my colleagues can.”
Sitting on the Catholic school building committee has been enriching for Verge, as it’s a constant learning experience. “You have to be open to new concepts so that you can learn as you go,” Verge says. “So you always try to do things better than the last time you did them.”
How important is the money?
Verge has inadvertently touched on another important element to any salary survey. How important is the money? If your job is rewarding, how much should you carp about the pay?
“Salary is only one part of the mix in terms of work flexibility, professional development, benefits,” says Randall Craig, a Toronto-based management consultant. “And sometimes, when you take a look at salary surveys, what you’re seeing is only once slice of the picture. So if you’re a bit below or a bit above, don’t get too perturbed, or don’t be too happy. It’s just something that can help you do a bit of a gauge.”
You should be within 10 to 15 per cent of the average salary, though, Craig notes. If you aren’t, it might be time to re-evaluate your worth and find ways to get the message across to your manager.
First, consider the urgency of what you’re buying. Is it “mission-critical” or can anybody purchase it? Factor in your experience, education and skills. Start a file—even if it’s just a folder in your e-mail inbox—to collect accolades and positive feedback. Be especially mindful of special projects where you’re taken off your job, away from your usual manager.
“They might not see your performance on some of these special projects,” Craig says. “And that’s where you might think you’ve added the most value.” Of course, nobody likes a braggart, but there are subtle ways to draw notice to your accomplishments. For instance, you could send an e-mail to the other members of your team, copying your manager, thanking everyone for their contribution, and mentioning the positive results.
“As soon as you’re able to make more of a difference, you’re able to justify a compensation package that’s commensurate with responsibilities,” Craig says. “If you want to be a duck, you have to quack like a duck, which means you’ve got to be making a difference within the organization. And it’s not just a question of slicing a little off one supplier, but taking a look at purchasing from its strategic root. It’s the core of supply chain management.”
Craig is more acquainted with purchasing than one might think—his wife is a C.P.P . So he’s aware of the “daily pain and winnings” of the field, and its struggle to be recognized by the senior executive. His advice? Education.
“See about educating and upgrading yourself so you do develop a wider perspective…Along with that comes the requirement for continuous learning and self-improvement. Some of that might be through PMAC, but it’s also stuff you take yourself, whether it’s internal courses or extra college and university credits, so that you’re always training yourself to be sharper,” he explains.
“The wider perspective you get through this education will allow you to understand the greater strategic role that purchasing actually plays within an organization.” Of course, he advises, don’t forget to deliver “stellar” performance in your day job.
New challenges
So what is the day job? One thing is for certain, it’s fraught with a new bundle of challenges this year—from renewed efforts in electronic tendering to tighter data storage requirements. Speaking with practitioners across the country, they note a dizzying array of issues. Many are trying to adjust to the US Sarbanes-Oxley laws, which (in the wake of Enron), aim to ensure a higher standard of financial reporting—especially impactive for Canadian companies doing business in the US.
“It’s really tightening up controls and having a significant impact,” says Donna Tilley, senior buyer with NOVA Chemicals in Joffre, Alta. “For example, before [Sarbanes-Oxley] if I needed to create a new vendor so I could issue a purchase order, I would make a request and put in the information…Now it has to be far more structured and documented.”
Foreign procurement is another big one, adds Dale Flint, purchasing agent (C.P.P.) with Kitimat, BC–based Methanex Corp. “There’s more offshore sourcing, so you have to make sure you get that quality of product. You can get [lower] pricing, but it has to have the quality.”
Flint, who started in warehousing, has been in supply chain management for 25 years. “I think there’s a lot more recognition in purchasing now. When I first started in purchasing it was always treated as a cost to the company,” Flint says. “Now it’s looked at more as a value-add, and the bottom line is the money you save in purchasing up front is magnified at the back end.”
The thought is echoed by Michele Dyson, purchasing coordinator with Robar Industries Ltd., a waterworks manufacturer in Surrey, BC. Before joining Robar, she worked with a small company, and wore a couple of hats. “As a small company, we needed to multi-task,” Dyson says. “So they said my responsibilities would be purchasing as well as quality assurance. I stayed with the company for three years and took a lot of courses in quality assurance but did not take any purchasing courses and haven’t to this day.”
In terms of challenges, Dyson says Robar’s departments require their items quickly, often expecting them within a day for local orders. She’s also required to plan purchases sometimes nine months in advance, which can be difficult considering the volatile markets.
Without any formal training, she had to learn purchasing through practical experience, or “necessity” she quips. “The company that I was working with previously didn’t see it as a big role. And they still don’t see it as a major role. They see it as a clerical position. My [current] company does see it as a more profound position, more like a management position.”
Dyson is still grappling somewhat with the fundamentals of purchasing, and mentions she plans to take some courses, starting at the introductory level. She senses a lot of untapped potential in purchasing, and plans to pursue it.
Armed with that enthusiasm, and a commitment to continuous learning, she and her like-minded peers will undoubtedly reap the bigger paychecks and more dynamic jobs.
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