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Top dollar: Results of the 2007 Purchasing b2b & PMAC salary survey
Lisa Wichmann
The results are in and the news is good—at least for most. The 2007 Purchasing b2b/ PMAC salary survey shows pay rates for supply managers are steadily increasing.
Respondents reported an average pay raise of 4.6 per cent over 2006, bringing the overall mean salary to $71,200. The figure on the pay stub varies widely though, depending on location in Canada, years of
experience, industry and gender.
When reviewing the results, keep in mind the figures represent industry averages, and aren’t meant to reflect exact salaries for any given title. The other catch is the role and responsibilities of
‘purchaser’ can vary widely, depending on company size. For that reason, providing job descriptions for each title in the survey would be a perilous task.
But given the unprecedented high number of respondents to the survey
this year—about 2,300 from across the country—it’s safe to assume your current salary should be within range of the industry averages.
Geography and gender
As we discover every year, buyers in Alberta are still the best paid, with an average salary of $79,800. Quebec came in second at $72,700, followed by Ontario at $69,600.
BC is at $68,000, followed by Manitoba and Saskatchewan at $66,000. The lowest paid supply managers hail from the Atlantic provinces, where respondents peg their 2007 salary at $56,800.
In terms of industry, buyers with natural resource organizations top the chart, at $83,800. Service industries also pay higher than most categories, at $73,700. Government buyers earn $68,400, while those in manufacturing bring in $67,900. Bringing up the tail of the list is healthcare ($64,700) and education ($62,200).
In terms of additional earning potential, incentives and bonuses
will be paid to 51 per cent of respondents this year. How much will they get? On average, the bonus or incentive will comprise 5.2 per cent of their salaries. For directors and VPs it’s 10.6 per cent; materials managers, 6.1 per cent; purchasing managers, 5.7 per cent; and purchasing agent, senior buyer and buyer falling in at 3.2, 3.9
and 3.5 per cent respectively.
Once again, women are still experiencing a pay deficit compared to men, with the average salary at $62,500, versus $77,600. The gender difference persists year over year, with plenty of theories as to why. One of the more common ideas is women have a slower ascent up the corporate ladder, since they often take time off to accommodate
young families.
Professional power
Another familiar pattern is the higher rate of pay among holders of the Certified Professional Purchaser (C.P.P./a.p.a.) accreditation. This year, the difference in salaries is vast, with C.P.P. graduates earning $86,500, compared to $66,000 for non-graduates.
C.P.P. holders seem to be pulling ahead at a faster rate than their colleagues, compared to past years—strong evidence to support the designation is gaining more prestige and perception of value.
“Professionally designated individuals…continue to earn more,” concludes Bob Dye, president of the Purchasing Management Association of Canada (PMAC). “More importantly, that gap is widening…There are fi nancially rewarding careers in the profession, but they are even more fi nancially rewarding if you have a professional credential.”
Not only are businesses recognizing the worth of professional accreditation, they’re also starting to think more highly of the job itself. “The value-add of those in the [supply management] profession is being recognized more by business,” Dye says. “The supply chain is in fact the value chain in the enterprise.”
PMAC membership also provides a salary boost, with an average pay rate of $74,900. Respondents who indicated they weren’t a member—or were a former member—earn $63,600.
Education pays
The value of post-secondary education was confirmed in this year’s survey, with university graduates earning an average $76,600. Those with some college or university earn $70,500; while college diploma holders are paid an average of $67,600. Those in the ‘high school or less’ category are paid around $64,900.
Another interesting result of the survey is the higher than expected salary for new entrants to the fi eld. In the past, newcomers to procurement could be expected to be paid somewhere in the $35,000 to $45,000 range. But the 2007 data shows the average salary for supply managers with less than five years experience is $69,100.
“The profession is attracting more highly educated individuals and a lot of the cross-overs would come with a higher level of post-secondary or even a Masters level,” Dye explains.
By cross-overs, he’s referring to those who start out in another discipline, such as engineering, IT or accounting, and move into supply management by happenstance. “You’ve earned your stripes somewhere else,” he says. So the $69,100 is a nod to the years of experience they’ve gained in previous careers.
And indeed, that group is a big one. The average age of respondents this year is 42, yet more than half have held their current job title for less than five years.
Workplace priorities
After so much scrutiny over who makes what, the question remains:
how important is the salary? If the pay cheque is a little light, do mitigating factors such as flexibility, career advancement and educational opportunities bear weight?
In the survey, we asked respondents to rate the importance of compensation, and concessions to work/life balance. Seventy-seven per cent of respondents felt a competitive salary is ‘very important’. Another 22 per cent rated it as ‘somewhat important’.
But coming in at a close second is work/life balance, which 75 per cent of respondents pegged as ‘very important’. A comprehensive benefits package was deemed ‘very important’ by 70 per cent, and a competitive pension plan by 60 per cent.
Fifty-one per cent felt adequate paid vacation is ‘very important’; while an easy commute to work was considered ‘very important’ by 36 per cent.
Though telecommuting is predicted to liberate us all from our desks, 13 per cent of respondents said the ability to work from home was ‘very important’, with 35 per cent saying it’s ‘somewhat important’. Fifty-seven per cent feel career and professional development is ‘very important’.
Satisfaction levels
Now that we know what the priorities are, another question crops up: are supply managers satisfi ed with what they’re getting? They’re certainly putting in enough hours—43 per week on average, and 73 per cent receive no compensation for overtime.
As it turns out, only 19 per cent of respondents describe themselves as ‘very satisfied’ with their pay, while 54 per cent are ‘somewhat satisfied’; 20 per cent are ‘not very satisfied’; and five per cent are ‘not at all satisfied’.
Satisfaction levels ranged for the other factors too, such as ease of commute, benefits and pension. For the most part, however, purchasers seem to be an amiable group—indicating they’re ‘somewhat satisfied’ with most of the variables.
That might explain why many respondents have no immediate plans to
change jobs. We asked supply managers to predict what they’ll be doing in two years. Forty-three per cent expect to be working in the same position; while 42 per cent plan to be promoted within the same company. Another 28 per cent plan to fi nd employment with another organization.
Eight per cent plan to change careers entirely, five per cent expect a C-level executive position, and another five per cent say they will be self-employed. Four per cent of respondents plan to retire.
Regardless of the specifi cs, the most critical factor is having a plan, says Cecile Peterkin, a Toronto-based career coach. “You’re making sure at all times you know what your strengths are, your
qualifications; and you see where you have challenges. You’re doing extra courses, expanding your knowledge,” Peterkin says.
Broadening those horizons shouldn’t be too challenging, considering Canadian organizations are generally willing to support career development. In the survey, 90 per cent of respondents said their company pays for educational courses. And 73 per cent said they’re reimbursed for professional membership fees.
Making a change
Even with those boons, there are situations where an employee simply
can’t thrive, Peterkin says, and they eventually become unhappy with the job. But without a two, three- and five year plan, it’s difficult to navigate into something better. It’s the employees who constantly update their career plan that manage to promptly leave a
dissatisfying job.
Sometimes, if the issue is purely salary, supply managers might be able to negotiate more pay, without leaving their current position, she adds. In that case, however, they should get to know the company’s policy on pay increases before making the request.
“Everyone always thinks that they’re working very hard and they deserve a pay increase. But realistically, people should sit down and analyze…if they’ve saved the company money, if they’ve generated any revenue.”
It’s also worthwhile to take into consideration the company’s recent economic performance. “If you know your company is not doing well, don’t ask for a pay increase. Get out there and see what you can do to make the company performance a lot better. Then you can be recognized for a pay increase.”
She also suggests supply managers learn to differentiate between the value of the role they’re fi lling, and their own value as an individual. “You can be in a position where the value of your role is at its peak, but you’re a very valuable individual, and you have a
lot of potential. However, in the role you’re in, you’re not maximizing your potential.”
In that case, an immediate pay increase might not be the right answer. Instead, supply managers in that situation should ask for more responsibilities, and once those capabilities are proven, ask for more money.
Before opening up the topic of a pay increase, though, it’s important to consider how easy or difficult it would be for the company to replace you, Peterkin says. If a replacement can easily
be found for the same or less salary, conditions aren’t ripe for a pay raise.
When conditions become more favorable, it’s still important to benchmark your salary against those at other organizations, so you know if what you’re asking for is reasonable, she adds. Even then, it’s a challenge to get more than the usual ‘inflation raise’ of two or three per cent—but it can be done.
“There are people who have gone above the three per cent. But those are really high performers. These are the ones that really can present their case. They’ve set objectives for themselves, and objectives with their boss, they’ve met and exceeded these achievements and expectations,” she says.
“They’ve taken on extra responsibility… taken extra courses, and stepped up to manager or supervisor responsibilities without even asking for a title.”
In that case, companies will often hand out a five per cent increase and then top it off with a nice bonus, she explains, simply because they don’t want to risk the employee leaving. If management still refuses to up the salary, Peterkin says it helps to ask the boss about the chances of getting the raise in six months. If prospects aren’t good, it’s probably about time to tell them you’ll be looking for other opportunities. In some cases, that threat can be enough to produce a pay increase. But if the employee isn’t highly-valued,
the tactic won’t work.
Finally, with the ever increasing focus on creativity and innovation in the supply chain, professionals in the field can’t afford to be complacent, she says.
“If you’ve been with the same company for a number of years and you
haven’t thought about where you want to go next, it’s also frowned upon by your boss. A lot of people don’t realize that,” she says.
“They seem to think ‘oh, I’ve been with this company for 10 years. Therefore I’m dedicated and committed’. Not necessarily…They’re not really learning anything and not really growing. So is that employee someone you want in your company?”
Unless supply managers are vocal about their desire for advancement, or their plans to take educational courses, they run the risk of being seen as a stagnant employee.
These days, as supply management becomes more dynamic, global and prestigious, there will surely be opportunities for promotion into
management and C-level positions. With that kind of momentum—and the
ever-growing caliber of participants in the field—salaries and satisfaction rates will certainly continue their upward climb. b2b
For more information on the salary survey, contact editor Lisa Wichmann at lisa.wichmann@pb2b.rogers.com
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