Tag Archives: procurement salaries

Five Surprises From ISM’s 2017 Salary Survey

A double-digit increase in salaries over four years, a continuing gender pay gap and similarity in salaries across generations are just some of the insights to be found in ISM’s foremost annual research initiative, the Salary Survey.

To create the ISM Annual Salary Survey report, for the past 12 years Institute for Supply Management has asked its members thoughtful questions regarding their salaries, benefits, current employment and what they’re looking for in future employers. This report’s purpose is simple: to empower the professionals we serve, through the provision of insightful, actionable information. We believe this information is so important for individual professionals (and therefore the profession) that we take the time to carefully compile thousands of responses from around the United States. The information gathered is then diligently reported back, every May, in an article in Inside Supply Management and in a detailed report available on ISM’s website.

  1. Strong momentum for salaries

This year, the Salary Survey found that in 2016, salaries continued to grow strongly compared to the previous year. This may be due in part to a strong job market, continuing the forward momentum from 2015 into 2016 with the average compensation for responding professionals being $115,440, an increase of 5% compared to 2015 ($109,961). In 2015, there was a 7.9% increase. In the longer term, salaries for procurement and supply management practitioners increased 14% from 2013 to 2016, as released in the 2014 to 2017 ISM® Salary Survey reports.

  1. Widening gender gap

More saliently, the average salary reported by procurement/supply managers was $109,401 in 2016 — and when broken down by gender, male managers reported earning an average salary of $114,207 while female managers reported an average salary of $97,948. While overall salaries have increased over the years, in 2016 men earned an average of 31% more than women, a substantial increase from the 24% reported in 2015.

  1. Professional certifications pay off

The survey further found that those who invested in professional certifications made more in 2016 than practitioners who did not. Respondents who have a professional certification reported that their average salary was $121,523, whereas those who indicated they did not reported an average salary of $108,141.

  1. Generational differences and similarities

Professionals can also start to see year-over-year trends in the detailed report and use information from the inaugural Generational Report, which was released this month. The Generational Report looks at information collected from Salary Survey reports over the years, and follows baby boomers, Generation Xers, and millennials as they move through the profession, reporting salary and other changes. For example, while millennials are a distant third on the generational salary scale (an average of $93,555), Generation Xers aren’t far behind baby boomers ($121,512 and $122,880, respectively).

  1. Considering changing careers?

The Salary Survey report has a specific section dedicated to individuals who are thinking of changing careers or are considering getting a professional certification. In 2016, nearly half of respondents indicated that they transferred into procurement/supply management from another career or vocation, and reported that the change resulted in an average salary of $118,140, 2.3% more than the overall average reported for 2016. Director, manager and experienced practitioner respondents from another field earned 4.7% more, 6.6% more and 7.5% more, respectively, compared to peers who have always worked in supply management.

In just this article’s small recap of Salary Survey findings, practitioners can easily start to identify where they fall among their peers. Information is collected on salary not only by position, but years of experience, education, geographic region, industry and many other categories.

Information like this gives power and perspective to the professionals consuming it, and helps them map out their future. Confidence and knowledge work symbiotically, and in this case, it’s easy to have confidence when possessing facts to back your decisions — whether changing positions and/or careers, negotiating for increased benefits or motivating a professional to pursue a certification. The information ISM provides helps empower procurement and supply management professionals. It’s what we do best.

The ISM’s Twelfth Annual Salary Survey detailed report can be accessed here or you can access Inside Supply Management magazine here.

Procurement Pay Gap Shock

The gender pay gap in procurement and supply management has INCREASED, according to US and UK survey results released this week. Have you sponsored your own internal gender salary gap analysis?

Ever considered how procurement salaries measure up with the rest of the working world?

Are you suspicious that your  procurement colleagues might be getting a better deal than you?

If you’re a woman working within procurement and supply chain, have you ever wondered how glaring the pay gap is within your industry or organisation?

This week, ISM’s Twelfth Annual Salary Survey in the US and the CIPS/Hays Salary Survey in the UK have shed some light on all of the above. Whilst there’s clearly still a very long way to go in terms of the  gender pay gap (predicted to take another 170 years to close), things are otherwise looking pretty comfortable for the procurement and supply chain profession….

ISM Salary Survey Results

Now would be a great time to convince your boss you deserve that pay rise, because the Institute for Supply Management’s (ISM) Twelfth Annual Salary Survey has been released. The results are based on data from 3808 supply management professionals who were surveyed throughout February and March 2017 to determine these average salaries:

Average Salary: $115,440

Median Salary: $90,000

Average for Men: $126, 710

Average for Women $96,990

In the US, a person working in professional, management or related occupations earns an average of $63,076 annually, which means these results are pretty good news for the supply management profession.

The figures show a 5 per cent increase in average compensation since 2015. Men’s salaries have risen by 8.2 per cent and women’s by 3 per cent.

The super bad news is that procurement appears to be taking a step backwards with regards to equal pay. In 2015 women earned 24 per cent less than men, compared with 31 per cent this year.

Download a summary of the report here.

UK Pay Gaps Revealed

It’s not just ISM’s figures proving to be disappointing in terms of gender equality.

As of last month, UK organisations employing more than 250 people are obliged to publish their gender pay gap figures.

Virgin Money disclosed that men who work at the bank earn, on average, 36 per cent more than women, asset manager, Schroders, reported a  31 per cent gap and Utility SSE a 24 per cent gap.

Some are against the new legislation arguing that the numbers don’t give a full picture and place all the blame in the hands of the employers. Others are in favour of the full disclosure and think it will spur organisations and governments to crack down harder on gender inequality.

McKinsey’s Global Institute report found that $12 trillion could be added to the Global GDP by 2025 by advancing women’s equality, which is as good a reason as any to close the gap, pronto!

UK Procurement Salaries Outstrip Average

The CIPS/Hays Salary Guide and Insights 2017 has surveyed over 4,000 procurement employers and employees to learn everything from key trends in salaries to challenges faced by employers and the top benefits desired by procurement professionals at all levels of seniority.

Whilst the average annual UK pay increase is 2.2 per cent, procurement professionals in the UK are receiving an average of 5.3 per cent more! Jacki Buist, writing on Supply Management, believes the results show a “continuing enthusiasm for the profession in all regions.”

Unpredictably,  the cause for concern falls once again in the region of gender disparity. Overall, the pay gap is reducing but at the advanced professional level, men receive an average  of £82,000, compared with a woman’s £65,700.

Registrations are open for the CIPS/Hays Procurement Salary Guide and Insights 2017 Webinar, which takes place on Thursday, 11 May 2017 13:00 GMT.

Are you surprised by the figures released in these two surveys? How do you think the UK’s new legalisation will impact the fight for equal pay? Let us know in the comments below.

In other  news this week….

Google Customers Subject to Phishing Attack

  • Google customers have been targeted with a scam that gave hackers access to the contents of emails, contact lists and online documents of victims
  • On opening a given link, Google’s login and permissions page asked users to grant the fake Docs app the ability to “read, send, delete and manage your email”
  • Google has now shut down the attack but have asked customers who received such an email to flag it to them.
  • Victims have been advised to change the passwords to their online accounts

Read more on The Telegraph

Amazon to Expand in the UK

  • Amazon is adding 400 staff to a new research and development centre focused on machine learning, in a move that reinforces the retail group’s long-term investment in the UK
  • The lab will develop  the voice-activated Echo speaker and Prime Air drones
  • By the end of this year, Amazon plans to add another 5,000 British employees to its payroll, open a new 600,000 sq ft headquarters in central London, and operate three new fulfilment centres around the country

Read more on the Financial Times

The future of Blockchain

  • Put simply,  blockchains take out the middle man (banks) and make the transfer of funds more streamlined and safe
  • The United Nations (UN) used one particular blockchain, Ethereum, to distribute funds from the World Food Program (WFP) in a pilot program earlier this year. The experiment successfully, distributed aid to 100 people in Pakistan
  • The system will now be used in Jordan to distribute funds to more than 10,000 people. It’s expected to help support 500,000 recipients by 2018

Read more on Futurism 

9 Tips For Negotiating A Pay Increase

The end of the financial year is approaching, which means many companies are preparing for performance reviews. Is this a good time to ask for a pay rise? 

If you’ve been thinking about asking management for a pay rise, you’re probably not alone. The end of the financial year provides the ideal forum to talk about your achievements and can also be an opportune time to raise the issue of a pay rise. However, your performance is only one of the considerations influencing a pay rise. The economy, your employer’s financial performance and what your department has contributed to the organisation’s bottom line will also all play a part in the decision-making.

According to a survey by Salary.com, more companies are planning for larger salary budgets in 2017 than smaller ones. In fact, more than twice as many survey respondents on average are planning to offer larger increases in 2017 than 2016. So you could be in with a shot.

However, bringing up the topic isn’t something most people are comfortable with. To help you prepare, consider these things.

  1. Verbalise your worth

Some people assume their manager is already aware of their achievements, so they shouldn’t really need to ask for a pay rise. But this isn’t necessarily the case.

Your boss will be looking to award a pay increase to staff who can demonstrate that they have gone above and beyond. So, in your meeting, give clear examples to demonstrate how you’ve delivered beyond what is expected of you. Structure this just like a CV and focus on actual outputs and achievements, rather than general statements about how hard you work.

This could include times when you’ve taken initiative or financially or tangibly contributed to the business. Be sure to also give details about any additional tasks or responsibilities you’ve taken on. Having a written pitch supporting your assertion for a pay rise could also help the negotiation.

  1. Demonstrate your value

Take the time to research what similar roles to yours pay in other companies, which can help you set realistic expectations of yourself and your employer. Take some time to look through online jobs platforms, the newspaper and perhaps even recruitment companies in your field might have some related pay information they could share.

Generally, if you’re asking for a higher salary, you’re not in a position of power. In face-to-face negotiations, research finds that the more powerful person will usually win out. So, if you’re negotiating with your boss, you might like to at least start the negotiations over email or phone before sitting down and discussing it together. 

  1. Don’t give an ultimatum

You might have kicked some goals for your company and feel confident about your place in the food chain, but giving them an ultimatum might get you want in the short term, but it could also damage your relationship or career in the long term. A good negotiation tool can be to find out your replacement cost to the company, particularly if you’re working on projects with tangible deliverables, and mention this during the meeting.

  1. Watch your body language

Pay attention to what your body language says during the meeting. Stay relaxed, speak slowly and have open body language during the meeting (no crossed arms). Avoid getting defensive and be confident and convincing by coming to the meeting prepared.

  1. Be a learner

Demonstrating your ability to learn will demonstrate dedication. Whether you attend courses to improve your skills a few times a year or develop a lifelong habit of daily learning or micro-learning (such as reading about a new topic related to your job description on the commute to work or in your lunch break), this is something that management will look upon favourably.

  1. Don’t name your price

Don’t be the first person to say how much you’re expecting in a pay rise. For all you know, your boss could be thinking of a figure far higher than you’re predicting, so let them speak first. If your efforts to ask them to name a number isn’t working, give a narrow range that you’d be happy with. 

  1. Be realistic about timeframes

Don’t raise the possibility of a pay rise and expect it to be introduced the following week. While your company should have money in the budget to financially reward key staff, it’s rare that a pay rise will be approved and implemented immediately.

  1. Make sure you listen

Choosing the right phrases and making sure you say enough but not too much is paramount. Making sure you’re not suggesting that you’re underpaid and that there’s no aggression in your meeting is vital. Once you’ve presented your thoughts, make sure you let your manager respond, and listen with an open mind. If your manager decides not to increase your salary, ask for feedback and for ways you can improve your performance over the next year. 

  1. Discuss more than just pay 

If you’ve been turned for financial remuneration for your hard work, consider alternatives to an increase, such as asking for more workplace flexibility or additional training. Have this idea ready so that if your initial request is rejected, you can ask for an alternative.

I Can’t Get No (Job) Satisfaction

A third of workers are in struggle town to get job satisfaction and almost one in ten say choosing the wrong career is their biggest regret in life.

satisifaction

A study commissioned by Start Profile has indicated that job satisfaction in the UK is low, with many workers wishing they were doing something entirely different with their lives.

The Satisfaction Results

 The research into job satisfaction uncovered that:

  • 39 per cent of people are happy in their career
  • 24 per cent confessed that they ‘fell into’ their profession
  • 36 per cent are unhappy at work
  • 14 per cent actively admit to seeking new job opportunities

The results are a little alarming, indicating that 61 per cent of participants are unhappy in their current jobs. The research went on to reveal that in Britain, people working in retail were the most likely to seek alternative employment opportunities, closely followed by the transport and healthcare industries.

So why is job satisfaction so hard to come by?

On an interesting note, the study revealed that nearly 1 in 10 participants stated that choosing their current career is the biggest regret in their life. A further 17 per cent wished that they had followed their dream instead, while 11 per cent are just putting up with the job.

Andy Pickles, CEO of Online Careers Service at Start, commented that, “Many of us end up in a job we don’t enjoy because of decisions we make at a young age, whether that be choosing the wrong subjects, or not having enough guidance at school.”

Interestingly, a third of respondents said their parents had provided the most influence on their careers. 9 per cent indicated that it was their teachers who inspired their career path, and 6 per cent claimed to have been influenced by a literary or TV character.

satisfaction

With Job satisfaction getting harder to achieve, is salary the key to our happiness?

The relationship between money and happiness isn’t as straightforward as we might think. Michael Page, the British based recruitment business, used data from the Cabinet Office’s Wellbeing and Policy report to plot salary against happiness of 260 occupations.

Screen Shot 2016-06-13 at 12.09.21Click here read more on Salary vs. Happiness

‘Happiness’ was measured as the mean life satisfaction rating (a score out of 10) taken from the Annual Population Survey 2011-2013. The life satisfaction ratings were grouped as followed:

  • 0 to 4, (low);
  • 5 to 6, (medium);
  • 7 to 8, (high);
  • 9 to 10, (very high).

Salary data has been sourced from the 2013 Annual Survey of Hours and Earnings.

The Happiness Curve

The happiness curve indicates the overall relationship between happiness and salary. Compared with the general trend, occupations appearing above the curve are happier than you might expect for people on their salary, and those below the curve appear less happy than you’d expect.

Who are the happiest outliers?

Screen Shot 2016-06-13 at 14.13.54

Screen Shot 2016-06-13 at 14.13.48

Happy outliers are those jobs which appear furthest above the curve. The biggest outliers are fitness instructors, who despite earning significantly less than many occupations, are actually happier. Dental nurses (who are happier then dentists) and school secretaries follow closely after fitness instructors.

When you look at the top happiest jobs, we see a huge salary range from £18k for company secretaries, to £117k for CEOs and senior officials. The clergy come out on top in terms of happiness, despite earning nearly 6 times less than CEOs and senior officials, who sit in second place.

How does Procurement stack up against job happiness and satisfaction?

According to happiness curve, the procurement profession is holding steady, with buyers, procurement officers, and purchasing managers and directors having a high happiness rating of 7.4 (the red dots on the happiness curve below).

Screen Shot 2016-06-13 at 14.31.46

Procurement Leaders highlighted a fascinating point about job satisfaction and happiness – satisfaction levels tend to fluctuate, and can be dependent on a particular day or week.

Furthermore, in the 2016 Procurement Leaders Salary Survey, which provided an insight into the earning potential of those working in roles across the procurement function, it found that there was a clear relationship between earnings and satisfaction. The survey indicated that the more you earn, the happier you tend to be.

The survey also revealed a difference between men and women. Men’s satisfaction levels increased with their earnings, whereas women’s satisfaction levels did not follow the same pattern.

Throughout the results, the conclusion is clear – job satisfaction is the dependent variable. Happily, the procurement function is positioned uniquely to offer global travel opportunities, participation in stakeholder negotiation and collaboration on an internal and external levels.

Combined with higher than average pay, and the chance to create meaningful impact across organisations, this has the potential to make procurement a very attractive career choice (and not one to regret!).

So maybe Mick Jagger was wrong after all…

Procurement Sets Courageous Agenda – Big Ideas Summit 2016

The Big Ideas Summit 2016 global brainstorm lit up social media, bringing together a global community to advance discussions on ‘uber-ization’, cognitive procurement and more, as well as setting a courageous agenda for the future.

Big Ideas 2016 - Courageous Agenda

Expected to handle cataclysmic events and act with extreme agility, today’s procurement executives must be brave and bold. Indeed, Being courageous is now the defining characteristic of successful procurement leaders, according to the influencers who spoke during Procurious’ second annual Big Ideas Summit on April 21, 2016.

The unprecedented digital think-tank event connected these presenters with Procurious’ 14,000+ members, crowdsourcing everyone’s big ideas for the future of the profession.

Sponsored by Coupa, The Hackett Group, IBM, and the Institute for Supply Management® (ISM®), the event sparked vigorous discussion on Procurious.com, the leading online community for procurement/supply management professionals.

Delegates watched live footage, and posted and tweeted under the #Bigideas2016 hashtag, reaching a potential audience of over one million individuals. Among the big ideas that influencers shared:

Preparing for “Black Swans”

In a year racked by political and economic volatility, Former BBC anchor Nik Gowing challenged delegates to prepare for the next “black swans” (unknown cataclysmic events) that threaten their supply chains.

Barry Ward, Senior Brand Manager, IBM, urged them to use Cognitive Procurement technologies to predict these crises, which could throw their market caps into a downward spiral.

Uber-ization Sparks Innovation

Gabe Perez, Vice President of Strategy and Development, Coupa Software, encouraged procurement leaders to drive more innovation and value by replacing RFP processes with an Uber-like open network model.

How else can procurement leaders accelerate innovation? Christopher Sawchuk, Principal and Global Advisory Practice Leader, The Hackett Group, laid out an agility model enabled by the right culture, talent and leadership, risk forecasting and planning, automation, outsourcing, and more.

Driving Social Outcomes

Procurement leaders’ opportunity to do social good was another hot topic. Journalist Lucy Siegle, co-founder of The Green Carpet Challenge, called attention to abuses in the fashion industry supply chain, and the iconic brands who are tackling it.

Peter Holbrook, CEO of Social Enterprise UK, discussed the transformational ‘Buy Social Corporate Challenge‘, through which ten major global organisations will spend £1 billion with social enterprises by 2020.

Open and Connected

With the pervasive use of the Internet and social media, especially among the Millennial generation, leaders such as Tom Derry, CEO of ISM®, advocated a more open communications approach. Walking the talk, his organisation recently made its comprehensive Mastery Model – a blueprint for lifetime success in supply management – freely accessible over the Internet.

“The procurement profession must share, share, and share online to build our collective muscle, amplify attention to our impact, and tackle our thorniest issues together,” said Tania Seary, founder of Procurious.

Everyone’s Turn

The global brainstorm continues on Procurious, where members can view more Big Ideas Videos and articles from the speakers, submit their own videos, tweet using #BigIdeas2016 @procurious_, ask follow-up questions on the Procurious Discussions Board, claim their Digital Goodie Bags, and invite friends to participate.

Be courageous and make your voice heard today by visiting the Big Ideas Summit website.

We’ve been keeping an eye on the top headlines in procurement and supply chain this week…

More supply chain leaders are making the move to CEO

  • Supply chain leaders who have stepped up to CEO include Tim Cook of Apple, Mary Barra of General Motors and Brian Krzanich of Intel.
  • Kevin O’Marah comments that supply chain leaders have CEO-level skills including balancing risk and opportunity, fighting the near-term battle with an eye on long term strategy, and focusing on profitable growth.
  • CPOs think like engineers, but also like salespeople. Like CEOs, they’re able to communicate and influence to get the job done.

Read more at Forbes

CIPS UK: Procurement salaries are on the rise

  • Demand for procurement professionals has risen over the past 12 months driving salaries up 5 per cent, compared to the UK national average rise of 2.9 per cent.
  • 68 per cent of those surveyed had received a pay increase in the past year, compared to 61 per cent in 2015,
  • This has driven the average salary for procurement professionals up from £41,661 last year, to £44,226 in the past 12 months.

Read more at CIPS

India: Punjabi procurement agencies in wheat corruption scandal

  • Punjab’s foodgrain procurement agency officials accused of siphoning off over Rs 12,000 crore and diverting procured wheat to the black market.
  • Officials accused of covering up theft by adding water to stored wheat to increase its weight.
  • Farmers caught in the cross-fire as banks freeze payments.
  • Over 500 mandis (procurement centres) to be monitored by committee.

Read more at Indian Express

US Defence: Proposal to cut war budget to fund procurement

  • Chairman of the House Armed Services Committee, Rep. Mac Thornberry, wants to allocate an additional $18 billion to buy newequipment and maintain aging gear and facilities.
  • The draft bill would preserve the overall budget top-line of $610 billion, but bulk up base budget spending to $574 billion.
  • $18 billion would be pulled from overseas contingency operations funds.
  • Thornberry said he believed “procurement was the real way out of the readiness pit”.

Read more at Military.com