Another day in your procurement job, another day moaning about your unsatisfactory salary… If you want things to change here’s how you take control!
I’ve always said that I’m extremely happy working in Procurement, and there’s no question that it’s great to be doing a job that I’m passionate about.
But no matter how much enjoyment we get from our work – money is always important and a key contributor to our chosen career path.
Of course, you and I would both be happy to double our monthly income; so I thought I’d outline three pieces of advice to help you get there!
Get paid for your value, not your time
Do you have a clear understanding of how your current salary was calculated? Is your employer buying your time or buying your skills?
Many procurement professionals make the mistake of thinking they are paid per working hour. But the main consideration for your employer shouldn’t be “how hard is this person working?” but rather “how much value is the person generating for the company?”
So my first piece of advice to you is this: Start thinking about what value you are creating for the company – start measuring it! If you measure your results and your ambitions you have a much stronger argument when it comes to salary negotiations.
Take a look at these two scenarios. If you were to approach your manager to discuss a pay increase, which one sounds more authoritative?
A) I have worked overtime and several weekends during the past six months. I don’t give enough attention to my partner and family. So I think I deserve a salary increase of +20 per cent.
B) I have finalised three major RFQ’s within our category during the past 6 months and I have reduced prices by 12 per cent per year for our company! I think this performance justifies a salary increase of 20 per cent.
Try to use the employer’s language as in scenario B. Find the arguments and KPI’s which you know they will value the most and think about how you can add influence in these areas. Then all you have to do is impress them with your results!
2. Take more responsibility
Do you enjoy responsibility or do you avoid it at all costs – letting others make key business decisions for you?
Both behaviors are quite natural. After all, people are different. But ask yourself, what is the main difference between you and your manager at work? Why do they earn a significantly higher salary than you? Many managers have less knowledge and skills than their co-workers and employees, but they are still respected more by the top-executives. How does that always happen?!
The simple answer is that your manager has the responsibility for a much bigger area of the work.
The rule: greater responsibility = greater salary.
So don’t allow yourself to hesitate when it comes to taking on responsibility. Don’t just wait to be asked, be proactive.
“I heard that our Procurement department plans to run the value stream mapping for Category XYZ. Can I lead this project as I know the processes and steps for VSM?”
“Can I take the responsibility for mapping new suppliers in South Asia, as I already have many business connections there?”
This approach to your work will stand you in good stead to get a significant salary increase when the time comes to negotiate.
Generate profit for the company
In my experience most organisations consider their procurement department to be the cost centre of the business. Others regard it as a support or service function and, in the worst cases, they dismiss procurement pros simply as buyers.
But you and I both know that procurement has an enormous impact on an organisation’s profit.
Whatever your savings are – they contribute to the gross profits of the company. As we say at Future Procurement organisations: “one dollar saved is one dollar earned!”
So how can this knowledge help your salary?
Senior management in your organisation may not understand the value procurement brings to the business and they certainly won’t be familiar with your individual responsibilities and deliverables. They even may not understand the role of Procurement organisation…
But top management of any company cares about profit, this is the language they understand. So modify your messaging and communicate the extra business profits that are connected to your procurement role.
To sum up; if you want your salary to increase you need to add value to the company, take more responsibility and concentrate on proving the profit you contribute to the company.
Remember; your employer will never care about you more than you care about yourself – it’s sad but it’s true! Throughout my corporate career, the biggest salary increases were never initiated by my boss.
Your salary is your own responsibility and if you don’t like it – it’s your problem to fix.
So get out there and fix it!