Tag Archives: salary

How To Increase Your Procurement Salary This Year

Negotiating your salary can be scary… but not doing so can be an even bigger risk and really add up over time.

Money. We all might agree that it doesn’t buy happiness at work and it’s far from the most important benefit in our jobs, but still, it’s a big indicator of the value we bring. And while as procurement professionals, we’re more than happy to put on our poker face, sit at the negotiating table and secure the best deal for our business, many of us are less inclined to employ these tactics when it comes to our own pay rises. 

But why? 

Negotiating for ourselves is challenging, and research shows an incredible two-thirds of us never do it. In a perfect world, we wouldn’t have to – our hard work and effort would be automatically rewarded. But our jobs, just like our supplier negotiations, are about business, so it follows that we’d need to regularly present our business case to secure the best deal. 

Doing so can be scary, but not doing so can be even scarier and over time, really add up. An example: a study conducted by Linda Babcock showed that only 7% of women attempt to negotiate their salary, as opposed to 57% of men. Over a career, this can make a huge difference – the same research showed that people who asked were able to increase their salary by over 7%. 

But even if we know we should be negotiating for ourselves, doing so can be a completely different beast. So if you want to increase your procurement salary this year, here’s how we recommend you do it: 

Step 1: Beforehand – Thoroughly prepare

A salary negotiation is like any other big-ticket negotiation in your procurement career and as such, you need to be prepared. Although salary can feel very personal, when you’re preparing you need to keep it professional and build a business case for what you’re going to ask for. Here’s how you do that: 

Understand your market value 

Before you enter any negotiations, you need to know your numbers, and salaries are no different. But where do you get this information from? 

Websites such as Payscale can be a great starting point when it comes to salary ranges. It can also be extremely helpful to talk to specialist procurement recruiters, such as those from Procurious’ recruitment partner, The Source, to understand what your market rate should be. 

After you’ve researched your range, land on exact value, ideally at the top end of the range. Why? Research shows that if you do this, you’re scientifically more likely to get closer to this amount, and when you select a number at the top of the range, you give yourself more room to negotiate. 

Once you’ve discovered your market rate, think about what you’d like to ask for as an entire package, in case the business simply isn’t able to afford the raise you’re asking for (or equally, if you value other benefits just as much). Perhaps you’d like to negotiate for more annual leave? Different flexible work conditions? Travel or different projects? Ensure you know what you’re after and have prioritised it according to your preferences. 

The last part of knowing what you’re after is considering the ‘bare minimum’ you’d accept. If you can’t get a raise, will you be ok to accept the changed benefits you’re asking for? Is nothing an acceptable outcome, as long as you know you can try again next year? Deciding on your ‘bare minimum’ can help you know when to  acquiesce your negotiations. 

Prepare your business case 

Now you’re clear on your value, it’s time to show it through preparing your business case. Many people make the mistake of defaulting to their personal circumstances or effort expounded in their business cases, but you should always focus on purely business outcomes and results. 

Your business case needn’t be long, in fact, it could be simply one page, but on it you should include: 

  • Your accomplishments, focusing on the value you added vis-a-vis the strategic priorities of your department (and even the business as a whole)
  • Any awards or other recognition you’ve received
  • Customer, stakeholder or co-worker testimonials (if you don’t have any of these, ensure you proactively ask for some).
  • A plan to achieve future objectives of the business and department.  

Once you’ve put together your business case, practice your pitch. Know inside-out how you’re adding value, and be prepared to answer any questions your manager might have (without getting defensive). Confidence will be a big part of your success, so practice definitely makes perfect. 

Get your timing right (if you can) 

Some companies mandate that salary negotiations and performance reviews go hand-in-hand. But from an HR perspective, there is always room for ‘out-of-cycle’ pay rises where they’re deemed necessary, so if possible, try to pick your timing when you’re negotiating. According to the Harvard Business Review, the best time to negotiate for a rise may be three to four months prior to your performance review, before your boss has decided what rises might be given out (NB. Team salaries often come from the same budget ‘bucket’ so getting in ahead of time might ensure there’s more available for you). 

The first rule of picking your timing is choosing a time, obviously, when your boss isn’t stressed or where you don’t have thousands of impending deadlines. Beyond this, research shows that you should choose a Thursday or Friday to negotiate, as in this part of the week people are usually more amenable to negotiation and compromise. 

Step 2: The meeting – put your best negotiation skills on

Remember the nerves you felt in your first supplier negotiation? Undoubtedly, you’ll feel those one-hundred fold when negotiating for yourself. As such, consciously employ these tactics to ensure you present your best pitch: 

Get your confidence on

Some people think of confidence as something you do – or don’t – have, but in reality there’s lots of things you can do to make sure you look and feel more confident. 

One such thing is to employ what Harvard researcher Amy Cuddy calls a ‘power pose.’ A ‘power pose is where you stand tall with your hands on your hips and your chin and chest raised. Executing one of these, even if it’s in your office prior to your negotiation, helps raise testosterone, which in turn increases confidence and reduces stress. 

You can also make sure you look and feel the part, says self-improvement researcher James Clear.  To do so, choose an outfit that makes you feel your best, and make sure you enter the negotiation room with your head held high, eye contact and a confident smile. ‘The way you enter a room can dictate how the rest of an interaction will be,’ James asserts. 

Finally, if you’re rethinking your morning coffee on your meeting day – don’t. Research shows it makes people more resistant to persuasion, so if you indulge, you might just have an easier time holding your ground! 

Listen before you ask

As you’d know from your supplier negotiations, you’re always in the best position when you’re armed with as much information as possible. Likewise, as counterintuitive as might seem, the first thing you need to do in your salary negotiation is to listen. 

What have our key successes been, you might ask. Or alternatively, what’s the road map for the future and how will be measure our success? The answers to these questions may well cause you to adjust your pitch, depending on what your manager highlights as their most crucial priorities. 

Your pitch

Now you’ve listened, it’s time for your pitch. When you’re discussing your achievements, keep everything professional and fact-based, referencing your business case as needed. 

Use your pitch to present your ‘first preference,’ whether this simply be a pay rise or a combination of pay and other conditions. Don’t mention other options as yet – these are for later down the track if negotiations don’t go as planned. Also take care not to mention anything non-business related, as relevant as it may seem (for example, I need a raise as my rent has  increased, or I need a raise because I learnt my colleague who doesn’t work half as hard earns more). Mentioning personal reasons for a pay rise will distract from the value you add to the business, which is what your salary is fundamentally about. 

Step 3: The big ask – will you get the pay rise? 

Once you’ve prepared to ask for your pay rise and presented your case, your work is almost done. But there’s still the hardest part – actually asking for the raise. How do you do that? Here’s some tips: 

Be direct 

Skirting around the topic, waiting to be asked for a number, or putting too many words into your request can all, unfortunately, be a sign you lack confidence in what you’re asking. The best way to ask for a raise is simply to ask, referencing everything you’ve presented. Try something along the lines of: 

‘Based on the evidence I’ve presented here today, including the research I did on market range, I’d like to request a pay rise to XX.’ 

Be positive, not pushy 

If the first response you get isn’t a straight yes (it almost never will be), you need to resist the urge to sound pushy, beg, or get offended or defensive. If the initial response to your request isn’t positive, ensure that stay positive and continue to lead with the value you’ve added. If you manager wants to dispute or further investigate anything you’ve presented, simply say that you’re happy to provide further evidence. 

This is especially important if you feel yourself getting emotional. Even if you have further evidence at hand, it may be better to present it at a later point when you’re feeling more composed. 

Send evidence via email 

From an HR perspective, it’s unlikely that even if your boss agrees with your request in principle, he or she will be able to approve it straight away. Also, he or she may need to provide evidence to senior management or HR as to why the decision is being made. 

To get on the front foot with this, send your manager an email after your meeting, detailing your request and your business case. Ensure you give your manager a deadline for responding, so you’ll know either way how to move the negotiations forward, if need be. 

Step 4: Dealing with a no 

When we enter a negotiation, the last thing we want is to receive is a ‘no.’ Yet at the same time, we do need to prepare for this as a possible outcome. Here’s how you do that while maintaining your professionalism and your job (if that’s your intention): 

See no as a path to yes 

When it comes to salary negotiations, it can be tempting to see a ‘no’ as a personal indictment on your performance, but according to Forbes, it’s anything but this: 

‘We’re often reluctant to negotiate past no, but we shouldn’t be. After all, it’s not really a negotiation if we’re asking for something our bargaining partner wants.’ 

‘Negotiation is a conversation whose goal is to reach an agreement with someone whose interests are not perfectly aligned with yours.’ 

If we wanted something from our supplier, would we take no as an answer? Probably not. Employ that same ethos in your salary negotiations. 

Make a counter offer 

The beauty of having pre-considered options for your negotiation means that if you get a no to your first request, you can proceed down the list. If you need to do this, continue to lead with value and sell the reasons why the benefits you’re asking for are beneficial to the business, for example, ‘Working a compressed working week has been shown to boost productivity, and I’m confident, given my track record, I can deliver that.’ 

Keep the conversation open

Did you know that some of the world’s most famous negotiations took years, and even decades to pull off? While you’re unlikely to want to wait that long for a pay rise, know that it might take some time to achieve what you’re asking for. Stay positive, make SMART goals (for example, I’d like to discuss this again in 6 months, when I’ve done XYZ) and continue building your business case. 

Have you tried to negotiate your salary? Any other tips for success? We’d love to hear them – please let us know in the comments below. 

Do you work in procurement or supply chain? Join 37,000 + procurement and supply chain professionals at Procurious today, and receive free access to the latest industry news, information, training, events and much more. 

New Year, New Fear – The Dreaded Annual Pay Review

If you’re facing an annual pay review this month, follow these key Dos and Don’ts to boost your prospects

For many of us, our annual ‘appraisal’ when we discuss pay and performance is one of the few opportunities to talk really frankly and one-to-one with our line manager.

However, there is a tendency for pent-up frustrations to spill out.

All those extra hours you’ve put in for no extra pay. The fact that you suspect your colleagues are paid more than you.

The lack of training and development. Being overlooked for promotions. Doing the job of three people with no support.

This is your time to get everything off your chest, isn’t it?

Well, no. It is important to treat this like any other business negotiation.

So, keep it professional. Don’t get emotional. Prepare your pitch. Present your case. And have a back-up plan if you don’t get what you want.

First, some Don’ts. Avoid these common mistakes.

Don’t beg for more

Adopting the Oliver Twist approach (‘Please sir! Can I have some more?’) is just going to make your employer feel uncomfortable. 

Saying you need a rise to cover the increase cost of fares or childcare or rent may gain you some sympathy. But it won’t get you a rise.

This is a negotiation about your value to the organisation – not the cost of living.

Don’t threaten to quit

Threaten to take a job elsewhere and you run the risk of your employer calling your bluff – so you better have a job lined up.

You will also come across as disloyal. And when there’s a promotion or new opportunity, your employer might overlook you for fear you are going to leave anyway.  

However, you can point out that other employers are paying more as part of your pitch (see below). But stress you are really happy in your job and have no plans to move. 

Don’t go compare – even if it’s not fair

Some firms actively discourage staff from discussing their pay with their colleagues. So if you ask around to check if your salary is on a par with everyone else’s or to find out what pay rise they received, you could be in for a disciplinary chat, rather than a talk about your prospects.

There are many reasons why people doing the same/similar jobs are paid differently – from performance to length of service.

Most people are not happy divulging what they earn, let alone revealing the details of why they are paid what they are paid. 

Don’t lose your temper – it will make things worse

If you don’t get the answer you want, try to be understanding rather than angry. Your line manager may hate having to tell every member of the team that they won’t be getting much of a pay rise and it won’t help your case to make the process even more difficult.

Also, there may be a reason – poor performance, persistent lateness, or rudeness, perhaps – for a bad appraisal. 

You need to address these issues, not antagonise your employer.

Now some Dos. Follow these tips to make things go well.

Do prepare a business case

Many employers fear that if they give one person an inflation-busting rise ‘everyone else will want one’. So give some compelling reasons why you, as an individual, deserve more by offering something in return.

Don’t just focus your past performance (what you’ve already contributed). You should also demonstrate how you can save/make your organisation money in the year ahead and bring more to the table. 

For example, offer to take on a new project – saving your firm the cost of employing someone new or a reducing the need for hiring a contractor. 

Do your research

As part of your pitch, you can (and should) use data to support your case. In turn, this can help your line manager to justify a pay rise with higher levels of management or HR.

However, instead of saying X earns more than me or Y had a bigger bonus, use the information that’s available publicly (if you can). 

Medium and large employers must carry out an equal pay audit on a regular basis to ensure that they are complying with the law. If your salary seems out of line with what’s been published, you can use this information to present a case for better pay. 

If your organisation does not have to publish pay data, then go online to salary comparison sites such as glassdoor.co.uk or indeed.co.uk to benchmark your pay.

Also, check job adverts for similar roles in similar organisations and print out the data to support your case. Once again, be professional. Say something like: ‘The going rate for my role is £X. I feel that bringing my pay in line will not only help me but also help attract other talented people to our organisation.’ 

Do make your firm an offer they can’t refuse

Most employees have a good idea about where there are skills gaps within their organisation. Offer to solve these.

You could say something along the lines of: ‘If I undertake this development programme/do this course I could take on the responsibility for X.’ You can then justify more pay through a promotion.

Do be prepared to listen

Your line manager will probably justify why you are only getting X% as a rise. Listen carefully. 

It might be because the firm is going through a difficult time (perhaps it’s time to jump ship). Or perhaps your performance is not good enough – in which, case find out what you need to do to improve. 

Do have a plan B for tomorrow

The bad news is that your line manager has probably already decided the size of your pay rise – or been given the figure by HR. 

So whatever you say will not make a difference to your salary in the short term. However, you can use the review to ensure better pay and prospects in the future.

Think of all the things your employer can offer you that will boost your ‘value’ in the workplace and your long-term earning potential. These could include investment in your skills, the opportunity to work in a different office (or even a different country) and the chance to join a new team. 

If none of the above are on the table, look at alternative ways to be rewarded such as more flexibility – for example, working from home one day a week.

Try to leave the meeting with something – even if it is an agreement to meet again in three months’ time to discuss your progress. If you feel more positive, so will your line manager who will probably be as relieved as you are that the chat went well. This will make your next meeting much easier (and hopefully more productive).

So if you have a pay review on the horizon bear these keys Dos and Don’ts in minds as you prepare for the meeting. You’ll give yourself the best chance of getting what you want.

And in case you need a little more advice on getting to the top in your career, don’t forget to tune in tomorrow to our free webinar – Don’t Quit Your Day Job. Register here.

Deep-Dive: Where To Find The Best-Paid Jobs in Procurement

Want the best-paid job in procurement? The upshot from two key reports: be prepared to move, think strategically and develop your soft skills.

At a time of supply chain globalisation and the frenetic adoption of e-commerce, procurement professionals are emerging from dusty back rooms and warehouses to claim their rightful place as key facilitators of doing business.

The advent of online giants such as Amazon is placing an increased emphasis on moving goods swiftly into consumers’ hands – often on the same day. At the same time, borders are becoming increasingly irrelevant as multinationals seek to source goods and services in ever-efficient ways.

Given the seismic changes, it’s a great time to work in procurement.

But be warned!

The increased demand for skilled professionals does not necessarily translate into greater monetary rewards, let alone more perks, with some sectors (or geographies) offering better conditions than others.

Two recent major salary surveys highlight the remuneration trends – and discrepancies – across the key English-speaking jurisdictions of the UK and the US.

Australian and Irish surveys also support the overall picture of excellent demand outstripping supply in most markets.

In some cases, employers are battling to find the right candidates. But the surveys also show the environment is fast evolving and practitioners need to upgrade their skills constantly.

On a disappointing note, the surveys also show the empowerment movement that emerged from Hollywood’s “Me Too” push is yet to translate into equal salaries and opportunities for women.

Some employers also bemoan a dearth of soft skills. In other words, job candidates may be technically proficient but are poor communicators or lack emotional intelligence.

The bottom line – UK salaries

Brexit is increasing demand for procurement professionals in the British market, according to the annual survey undertaken by the UK Chartered Institute of Procurement and Supply (CIPS), in league with the recruitment firm Hays.

As CIPS explains, Brexit (Britain’s withdrawal from the European Union) is already creating supply-chain upheaval, with one in seven EU businesses with UK suppliers already sourcing these goods and services elsewhere.

The spectre of protectionism and tariffs promises even more upheaval.

“Professionals will need strategic skills, data management and a steady disposition to help businesses find their way through the particular challenges faced by their organisations,” CIPS says in its 2018 Procurement Salary Guide and Insights.

Overall, 68 per cent of the 4000 survey respondents earned a pay rise in 2017, averaging 5.1 per cent. That’s 4 per cent more than the previous year and well above the 2.2 per cent increase for British toilers overall.

At the top of the tree, Chief Procurement Officers (CPOs) earned an average £124,000, 11 per cent higher than the previous year’s £112,000.

Experience, overall, is being rewarded: of respondents with more than two decades’ experience, 72 per cent received a pay rise compared with 53 per cent for those with fewer than two years’ experience. However, the latter received an average 6 per cent rise compared with 4 per cent for the veterans.

The bottom line – US salaries

Naseem Malik, managing partner of Virginia-based recruiter TYGES Elite describes the US market for procurement staff as being at an all-time high. Latest reports suggest there are 650,000 more openings than there are qualified workers.

“The procurement market has been tightening for the past couple of years and is definitely showing no signs of abating,” Malik says.

The US Institute for Supply Management’s 13th Annual Salary Survey presents a more cautious picture, showing overall compensation (pay) grew 1.7 per cent in 2017, to $US117,425 from $US115,440 previously.

This was less than the 5 per cent increase recorded in 2016. However, median compensation rose 4.2 per cent to $US100,000 ($US96,000 previously).

At the rarefied end, average pay for the top 5 per cent of earners fell by 4.5 per cent to $US368,505.

Emerging practitioners – those with less than four years’ experience – could expect $US77,996 on average.

Of the respondents – 2979 in all – 85 per cent saw their base salary increase, with only 5 per cent taking a salary haircut.

Of the former, the average increase was 5.3 per cent, while those who missed out saw their pay packet decline 7.6 per cent.

Malik says that US entry level to mid-management level salaries have steadily increased by 8-10 per cent annually since 2016.

“When it comes to senior levels, we are finding their total compensation packages have stayed competitive, with a focus on enhanced long term incentives as a reward.”

Mind the (gender) gap

Sisters might be doing it for themselves, but it looks like they will need some help at a structural level to reach pay parity with their male peers.

“Across all industries there’s a gender pay gap; it’s talked about daily,” says Tony Megally, general manager of specialist Australian procurement recruiter The Source. “That’s an ongoing challenge and a conversation we need to have.”

The firm surveyed 1000 industry professionals and found 59 per cent were male and 41 per cent were female. At leadership level, the imbalance rises further – to 62 per cent male and 38 per cent female.

Megally finds that men are far more willing to nominate an ambitious salary, “whereas females feel they need to be an expert and have all the knowledge in order to ask.”

As a result, the firm is consistently coaching female candidates to push for what they think they deserve and to back themselves.

The UK report revealed slippage in progress, however, with 71 per cent of men and 64 per cent of women receiving a pay rise in 2018.

This compared with a 65-63 per cent split in 2017 and marks a regression to 2016 levels.

But of the women who did win an increase, they did better than men: a 5.3 per cent rise as opposed to 4.9 per cent.

“The most striking pay disparity remains at advanced professional level, where men earned 33 per cent more than women (£85,398 compared with £63,986), a pay gap that is even larger than last year’s 25 per cent,” the CIPS report says.

However, women earned more than men in a number of operational and tactical roles, including as procurement officers, contract officers, assistant buyers and purchasing assistants.

The US study shows a similar disparity at all seniority levels.

Male chief procurement officers earned an average $US279,413 compared with $US221,137 for their female counterparts, a 26 per cent disparity.

At procurement manager/sourcing manager levels, men earned an average $US119,492 compared with $US103,903 for women, a 15 per cent difference.

There’s always a ‘but’: average salaries for females increased 1.8 per cent to an average $US98,780, pipping the average male increase of 0.9 per cent. Then again, the average male salary of $US127,908 was that much higher in the first place.

TYGES Elite’s Malik says the US gender gap is shrinking, with the trend likely to continue because of new laws in several US states that ban employers asking candidates what their current salary is.

“Companies now have to put a competitive offer on the table to ensure they close the candidate,” he says. “Otherwise, they lose out to companies that have a better handle on the marketplace.”

In Australia, Jigsaw Talent Management reports an average salary of $A172,730 for males placed this year, compared with $A153,139 for females. That’s a difference of 13 per cent, compared with 11 per cent four years earlier. But the story is nuanced, with females out-earning males in the highest category ($A200,000 and above) and the lowest category ($A100,000 and below).

According to Nikki Bell, the chair of the CIPS Congress, the profession does not appear to be bucking the “ever present” gender pay gap despite its reputation as enablers and innovators.

“We simply must do more to enable skills and career opportunities and eradicate any diversity-related road blocks,” she says.

Where to find the best (and worst) positions

The ISM survey shows that taking a global approach helps bolster the pay packet: international sourcing operatives topped the scale at $US140,565 overall.

There also appears to be industry appetite for aspiring James Bonds, with ‘market intelligence’ professionals earning an average $US139,472.

For a market intelligence chief – the industry equivalent of ‘M’ in the Bond movies – the average pay was a chart-busting $US337,132. (Keep that confidential, of course.)

While candidates might not rate social responsibility highly on their list of imperatives, it pays – literally – to take on those roles. A sustainability/social responsibility officer earns an average $US135,300, while a chief supply chain sustainability officer (or equivalent) earns $US325,992.

In the UK, the best industry sub-sectors for getting a raise were defence (88 per cent of staff), pharmaceuticals and life sciences (85 per cent), hotels and catering (83 per cent) and fast moving consumer goods (81 per cent). But the best pay rises in quantum terms went to workers in the telco and marketing/advertising/PR sectors, with increases of 8 per cent and 7.4 per cent respectively.

The ISM survey reveals a vast disparity between salaries depending on industry sector.

The best sector to be in is healthcare, which would appear to be generally impervious to economic conditions. With ageing western populations, it’s also a natural growth sector.

Healthcare procurement professionals earned an average $US148,360. Also faring well were those in fuel and utilities ($US136,578) and telecommunications ($US138,863).

The worst paid were those in manufacturing ($US117,636), metals ($US120,255) and electronics ($US121,316).

Hot demand Down Under

Thanks partly to billions of dollars of infrastructure projects, including massive rail network expansions in Melbourne, Australia can’t get enough of the right procurement people.

“It’s been a really hot market this year,” says The Source’s Tony Megally. “The Australian economy is growing generally so it’s really tight finding the right people across all industries.”

On the services side, candidates with deep knowledge of the telco and I.T. sectors are also in huge demand, especially at mid-to-senior levels such as sourcing or category manager.

Megally says more mid-tier corporates are investing in procurement functions, often the result of bringing in management consultants to review the supply chain.

“Traditionally, they have not had a centralised procurement function and bring on a leader to create the pathways and processes on how to better spend their money on goods and services.”

At the periphery, talent supply has been constrained by the Australian government’s crackdown on 457 visas – temporary working permits for foreigners – with procurement removed from the list of eligible professions.

Irish eyes are also smiling

Irish-based recruitment firm Morgan McKinley says supply chain management has become one of Ireland’s fastest growing sectors, partly because the country will remain a member of the European Union. This means that many companies prefer Ireland over the UK for their procurement activities and shared service functions.

That is being reflected in remuneration, with average salaries increasing by 3-5 per cent year on year.

Employees in highly skilled senior roles are enjoying salary packages that are 15-20 per cent higher.

“Those planning to secure a new career opportunity can expect an increase of between 8-12 per cent. With an increase in opportunities and a continuing skills shortage, we expect this trend to continue next year,” the firm says.

“We equally expect there to be an increase in the number of supply chain professionals choosing Ireland as their desired work location in the coming years, therefore increasing the talent on offer and potentially suppressing continued salary growth.”

More than money?

Most professionals would likely volunteer that job satisfaction factors outweigh the amount that lands in their bank account every month.

But don’t be fooled: money is important.

The US ISM survey asked respondents to rank 14 factors when considering a job. The result? Eighty-five per cent cited the hip pocket, followed by job satisfaction (81 per cent).

An improved work-life balance (80 per cent), pension plans (78 per cent) and medical and dental benefits (79 per cent) also ranked highly.

Respondents were less enamored with health and wellness schemes, with only 60 per cent considering morning calisthenics or a free gym an influential factor.

Only 58 per cent considered sustainability or social responsibility programs to be important, while 58 per cent were attracted by mentorship programs.

Also ranking lowly were childcare and elder care benefits. Given the ageing population, we might expect the latter to become a more elevated consideration in coming years.

Education counts

For procurement professionals, the embossed paper on the wall does count when it comes to salary and – presumably – job satisfaction.

The ISM survey shows the average industry salary for a high-school graduate is $US83,283 – above that overall for those starting out ($US77,996).

For those with a bachelor’s degree, the stipend increases to $US106,909 and then to $US137,670 for a master’s. For doctorate holders – only 2 per cent of procurement professionals have them – the average salary rises further to $US175,827.

Industry-specific qualifications are even more crucial: practitioners holding one or more ISM certifications earned an average 12.8 per cent more than those without: $US123,041 versus $US109,087.

Holders of the Certified Professional in Supply Management qualification boosted pay by 14 per cent to $US125,158, relative to peers without the paperwork.

Similarly, holders of a Certified Professional in Supplier Diversity pulled in $US124,337 – 14 per cent more.

In the UK, CIPS members (MCIPS) earned an average 16 per cent more, with the disparity increasing according to seniority. Senior buyers who are MCIPS earn an eye watering 23 per cent more than non-MCIPS.

“But we must not rest on our laurels,” says CIPS CEO Gerry Walsh. “Continuing professional development should be high on everyone’s agenda to always improve and find the right level of achievement.

“So, I hope this year our professionals will read more and do more to up their game and increase their usefulness so boards and CEOs sit up and take notice of how fundamental good procurement is for their business.” 

Soft skills give a hard edge

The UK survey shows that employers highly value so-called ‘soft’ skills such as effective communication, active listening, empathy and emotional intelligence.

It’s instructive that 67 per cent of total respondents said they had never received formal training in these skills, while less than one quarter (23 per cent) thought that academic institutions instilled the right skills.

The Source’s Megally says, traditionally, procurement has been perceived as a technical function, “but soft skills are front of mind.”

“Rather than talking about processes, it’s about building relationships and being a sales person, really,” he says.

“You can train someone in the technical elements, but those with a strong emotional intelligence are able to connect.”

TYGES Elite’s Malik says: “Soft skills have absolutely become just as important, if not more important, than merely technical skills when it comes to landing A players in the procurement world.

“Employers assume that the technical know-how will be there and they can assess that in their interviewing process. But they are just as concerned on the EQ side as well. They want candidates who understand stakeholder engagement and can build relationships both internally and externally.”

Meeting the industry’s challenges

As with any profession, procurement professionals must take the initiative in enhancing their worth to an organization. To borrow from John F Kennedy, ask not what your company can do for you, but what you can do for the company.

CIPS Congress chair Nikki Bell says the solution lies with individuals taking an active approach to learning and development, with an emphasis on the soft skills such as communication.

“As senior professionals and employers, we should not only be using our honed influencing and negotiating skills to address the matter directly within our hiring, reward and recognition policies,” she says.

“We should also be looking at what we can do individually and collectively to actively encourage, enable, mentor or support diversity in all its forms within our procurement communities, from entry level through to senior and executive leadership positions.”

She adds the profession must also seize the opportunity to ensure ethical and fair work practices across all supply chains.

A key message from the surveys is that the biggest pay rises are being awarded to those who can rebrand themselves as ‘analysts’: think of big data specialists, predictive analytics, e-procurement, artificial intelligence and machine learning.

As in so many walks of life, presentation is paramount in procurement.

Hold The Phone! Procurement Pay Increase Smashing The Average Salary

Both ISM and CIPS have released their annual salary surveys. Read on for a short summary of the similarities and differences in salaries across the Atlantic.

Salary surveys make for interesting reading. They reveal much about the perceived value of procurement and supply management, and provide a very helpful data set to have at your disposal the next time you ask for a raise.

If you haven’t seen them already, the two most comprehensive salary surveys for 2018 are available here:

Let’s look at 5 of the most interesting findings across the two surveys:

  1. Average salaries for the profession

  • ISM has announced that the average overall compensation for participating supply management professionals was US$117,425, while CPOs earnt an average of US$263,578.
  • CIPS reported an average salary of £46,422 for procurement and supply professionals, with CPOs earning an average salary of £124,000.
  1. Salary increase smashing the national average

  • In the U.S., ISM reported that supply management salaries rose an average of 4.1% over 2016 salaries, versus 3% for U.S. professionals generally.
  • CIPS found that 68% of procurement professionals received an average 5.1% increase in salary, versus a 2.2% increase for the UK national average.

Paul Lee, Director of ISM Research & Publications, offered the following explanation:

“In today’s global economy, excellence in supply management improves both top- and bottom-line performance, and advances companies’ leadership on the worldwide stage. Supply management professionals’ higher-than-average wage growth reflects the significant value they add every day”.

  1. Certifications DO boost salaries:

  • ISM: Those with the ISM Certified Professional in Supply Management (CPSM) certification averaged 14.7% higher salaries than those without any certification.
  • CIPS: The data reveals that MCIPS and FCIPS professionals have increased earning power, with an average 12% salary disparity between MCIPS and non-MCIPS, and an average of 11% disparity between FCIPS and non-FCIPS across all job levels.
  1. Most important factors when considering a new job

We’re a mercenary bunch. “Salary” has once again come out at the top of both ISM and CIPS’ research into what people consider when evaluating job opportunities. Beyond the money, however, are some other factors that employers should note:

ISM top 6 factors:

  • Salary: 85%
  • Job satisfaction: 81%
  • Improved work/life balance: 80%
  • Benefits package (medical/dental/vision): 79%
  • Pension/retirement plan/401(k) or similar: 78%
  • Organisational culture/work environment: 75% percent

CIPS top 6 factors:

  • Salary: 74%
  • Location: 71%
  • Content of the work: 65%
  • Career progression opportunities: 62%
  • Company reputation: 59%
  • Company commitment to training and development: 58%
  1. Gender gap disappointment

  • ISM’s data reveals women are paid less than men across every level in U.S. supply management, with male CPOs earning 26% more than female counterparts, male VPs earning 52% more than women, and male Emerging Professionals earning 13% more than women.

CIPS reports that the most striking pay disparity exists at the Advanced Professional level, where men earned 33% more than women, a pay gap that has widened since the previous year’s (25%). Pay disparity at the Professional and Managerial levels is also considerable, at 14% and 11% respectively

3 Ways To Increase Your Procurement Salary

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!

  1. 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!