Look at total compensation paid rather than to salary

Transcription

1 Salary Report for Buyers and Management 2017 nnual Report of Purchasing Salaries and Employment Trends Surveying Purchasing Wages Since Copyright 2018, merican Purchasing Society, Inc. Look at total compensation paid rather than to salary alone to evaluate compensation properly. Buyers and other purchasing personnel now often receive bonuses. The amount of the bonuses should be considered if they are substantial. The amount of a bonus depends on the position of the employee, usually the profitability of the organization, and sometimes the degree of performance of the individual involved. However, it is difficult to always assess performance accurately. This is especially true for those in the purchasing profession. It is important for buyer and managers to keep a record of their achievements and report them to management. Otherwise, they are apt not to receive the compensation they rightfully earn. Buyers and purchasing managers want to receive what they are worth and what is fair compared to what others are earning in a similar position. Executives want to pay a fair and reasonable amount to obtain or retain the best qualified individuals. This survey annually attempts to evaluate pay using the most significant criteria. Our analysis indicates that the type of industry is a factor as is the location of the job. Employees in purchasing operations are more or less depending on their education and experience to determine both their initial salary and what they continue to receive throughout their career in the profession. But they should be aware that their real recognized contributions to their employer is an important factor in obtaining the highest salary levels within their job function. The quality and usefulness of these merican Purchasing Society surveys are partially dependent upon the data obtained from the replies received from the purchasing community. Respondents to the survey are from a wide geographical area primarily in the United States. The replies are from many types of industries as illustrated on page 4. Our thanks to all respondents who answered the Society s surveys. ll purchasing personnel are encouraged to respond to the surveys sent by the Society each year. ccuracy of the averages improves when the responses are higher in a particular category. In addition, costs of conducting each survey are reduced so that funds can be allocated to other studies conducted to help the purchasing professionals do the best possible job for their employers.

2 nnual verage Salaries With Purchasing Titles in Thousands of Dollars Compared to Price Index C P I V E R G E S L R Y verage Salary Note: verage salary is illustrated annually in thousands of dollars and is for all purchasing personnel. The figures for the CPI are government data in hundreds at the end of each year except for the year 2017 which is for the month of September and the latest available at the time of this publication. nalysis of the merican Purchasing Society s 2017 survey sample indicates the average salary for all those with purchasing occupation titles is $77,303 with a 95% confidence interval of plus or minus $4,342. This compares to $76,649 for the Society s 2016 survey. In 2017, the average salary for those with the title of buyer or buyer/planner was $59,223 with a confidence of 95% plus or minus $4,175. This compares with a salary of $60,178 for buyers or buyer/planners in The average salary for purchasing managers in 2017 was $80,128 compared with $75,895 in Calculation of the 2017 sample average salary for purchasing managers yields a 95% confidence level with a margin of error of CPI thru September plus or minus $4,773. The variation in salary is most affected by industry, amount of purchased goods and services, and an individual s experience. The minimum and maximum figures are shown on the following pages. Evaluation of your salary level should consider all of the variables indicated on this report as well as other variables that are unique to a particular organization and a particular individual. For example, individual job performance is a difficult, if not impossible, variable to measure from a survey. In addition, performance is often subjective. boss or employer may not give enough credit while an individual may inflate his or her achievements. nnual Report Purchasing Salaries & Employment Trends, published annually, free to members only. Copyright 2018, merican Purchasing Society, Inc., P.O. Box 256, urora, IL 60507, U.S.., Phone (630) , propurch@propuch.com. ll rights reserved. Material may not be reproduced or quoted in whole or in part in any form whatsoever without permission except for internal use by members.

3 2017 Report Comparing nnual Purchasing Salaries by Title In Thousands of Dollars Major Purchasing Titles verage Median Min Max verag e Median Min Max verage % Change 17 vs. 16 Buyer & Buyer Planner Purchasing gent Purchasing Supervisor Purchasing Manager Materials Manager * * * * * Supply Chain Manager Director of Purchasing VP of Purchasing Purchasing Coordinator ll Purchasing Titles *Sufficient data unavailable for a reliable figure. The averages of salaries for all purchasing personnel combined tend to keep pace with or exceed the rate of inflation. Salaries for certain popular titles exceed the combined averages, but the amounts paid to those with other titles that are out of fashion may decline. Titles alone are not a true indication of purchasing salary trends. The state of the economy, the condition of particular industries, and various other factors affect what salary to expect. n individual s salary in any field is usually indicative of experience. This is especially true for those in the purchasing function for business. Experience is somewhat offset by the affects of location, age of the individual, the type of industry, and the amount of formal education held. Important factors affecting salary is the health of a particular business. Companies that are having difficulty making a profit or simply breaking even are more likely to be stingy with remuneration. On the other hand, companies that are booming are inclined to be more generous. bove all, if you have a job, keep in mind that your performance or perceived performance is an important factor. Prove to your employer that you are worth every penny you receive, plus more, to have a better chance of getting an increase or even a promotion. Be careful about pushing for more when you are near the top of the salary range for your position. Your employer may feel that another person can replace you who will be happy to work for much less than your current salary. To get more, indicate your willingness to take on additional assignments with more responsibility. Prepare yourself by continuing education and/or professional training. WWW. MERICN-PURCHSING.COM 3

4 Purchasing Personnel Receiving Bonuses Comparing 2017 to 2016 (in dollars) Title verage Median Max. % Received verage Median Max. % Received Buyer/Buyer Planner 1, , , , Purchasing gent 1, , , Purchasing Supervisor * * * * 2,336 1,500 6, Purchasing Manager 4,779 2,310 25, ,433 3,000 20, Materials Manager 8,000 2,000 24, * * * * Supply Chain Mgr. 3,100 1,500 8, ,929 3,000 15, Director of Purch. 12,110 8,000 70, ,042 7,500 60, Vice President 31,245 16,600 90, ,722 15,000 90, Purch. Coordinator , , , ll Titles 5,747 1,650 90, ,938 1,650 90, * Insufficient data. Purchasing Salaries by Type of Industry The Bureau of Labor Statistics reports wage information for about four hundred different industries or subindustries. The Society s survey obtained sufficient purchasing salary data on the following major industries. Median nnual Salary of Purchasing Personnel by Industry Type ($ in thousands) Industry Banking Construction Distribution/Warehousing Education Engineering/Research Entertainment/Lodging 74.0 * Government Hospital/Healthcare Manufacturing Nonprofit Services Transportation 54.9 * Utilities * * * Sufficient data not available on marked items. The Dollars Spent by Purchasing Operations The size of the company contributes to the amount spent by purchasing personnel. The table below is a clear indication that salaries for personnel are in large part determined by the amount purchased. However, salaries are a small portion of product expenditures and therefore probably do not influence the buyers or managers efforts to reduce purchasing costs. Median nnual Salary of Purchasing Personnel Compared With mount Spent or Managed mount Spent or Managed $1 Million to $10 Million $11 Million to $500 Million Survey Method ll data was obtained from written responses from direct mail inquires addressed to known buyers, purchasing managers, and other purchasing professionals. 11.3% responded to the questionnaire which included a request for information about the respondent s purchasing practices. higher response rate would improve the reliability and usefulness of the statistics. WWW. MERICN-PURCHSING.COM 4

5 Comparing Education and nnual Purchasing Salary In Thousands of Dollars Median % Education verage Median Min. Max. verage Median Min. Max vs High School Some College ssociate Degree Bachelor Degree dvanced Degree MB Minimums and maximums are shown for curious readers. However, the importance of those figures should be discounted because they usually include rare data points in the samples obtained. In addition, minimums may represent new or young workers with little experience while maximums may stand for workers near retirement, or for owners or executives. Note how the general trend of higher average and median salaries correlates with a greater amount of education. There is little doubt that the amount of education is an important factor. If you lack formal education, but want to know more and show your interest in being well-informed, you are now able to take PS online courses to supplement your experience and job knowledge. Comparing verage nnual Salary to ge In Thousands of Dollars Median % ge verage Median Min. Max. verage Median Min. Max vs Under to to to or over The chart above shows age is related to experience. lso, as indicated in the table below, generally, the more experience an individual has the higher the median starting salary will be. Increases will be based on that initial amount throughout employment with the same organization. The figures may not be reliable for ages under 30 because of the small amount of data available. s reported for last year, some lower salaries may be caused by the forced retirement of high-paying senior employees with younger and better-educated workers. Experience Pays Number of Years Spent in Purchasing Operations Compared with Salary Years Purchasing verage Median Min. Max. Less than 1 to 5 61,673 60,000 22, ,000 6 to 10 70,797 65,000 30, , to 20 80,253 75,000 41, , or more 99,408 88,375 40, ,000 Both the number of years spent in purchasing activities and the age of the respondents to the PS survey indicate that they are important factors in determining what salaries organizations pay for their employees services. WWW. MERICN-PURCHSING.COM 5

6 The graph below shows purchasing salaries tend to increase with company size, but there are many individual exceptions. Generally speaking, those with top purchasing positions of large companies make more compared with those in smaller firms. However, certain small companies pay much higher than the average, while some large firms pay much less than others. The 2017 survey did not ask for information about this particular variable. Median Purchasing Salaries vs. Number of Organizations Employees WWW. MERICN-PURCHSING.COM 6