Why purchasing is a valuable resource

7 September 2005
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08 September 2005

Purchasers have been enjoying bumper wage rises. But what are the underlying trends and how do they compare with other professionals? Anusha Bradley reports

Procurement is in hot demand, if recent salary surveys are anything to go by. There's no doubt wage increases are good news. But how do purchasers' rewards really compare to their peers in other sectors, and other functions?

Purcon's August survey revealed the average purchasing manager's wage rose 1.4 per cent on the previous quarter to £61,375.

And salaries in the profession continue to exceed those of HR, marketing and sales and are catching up with their peers in IT and finance.

The CIPS/Croner Reward survey in June showed senior purchasing managers' salaries received the highest boost, bringing their average earning to £53,364. This was 13.5 per cent more than their lowest-paid counterparts in HR. And purchasing directors' salaries reached £65,520.

The Purcon figures do throw up some interesting anomalies. Chief among them is that purchasing directors aged 36 to 40 earned on average £110,800. This was almost 40 per cent more than their peers aged 41 to 50, and 32 per cent more than those over 51.

Purcon director Jerry Smith said purchasing directors at this age were most likely at their skills and earning peak and on their way to general management.

"They are a very scarce commodity right now," he added.

And some of the greatest demand for buyers comes from central and local government. A report by recruitment firm MSB Supply Chain in March reported wage increases were driven by the increased demand for procurement professionals in the public sector. This, it said came as a result of the Gershon review call for multi-billion pound savings in Whitehall and town hall purchasing.

Jenn Saunders, a researcher at recruiter Hays, said: "The supply of suitably qualified purchasing professionals is simply not meeting demand, so salaries are rising."

She was also very conscious of the high public-sector demand.

"It is interesting that the average typical salary in industry across the UK is around 85 per cent of that paid in public services."

MSB said this increased public-sector demand has created a "knock-on-effect" in the private sector.

Matthew Edwards, an MSB senior consultant, said daily rates for interim procurement professionals had increased from £400 a year ago to more than £500 today.

"People are beginning to realise that procurement isn't the enemy and that it can add real value to the bottom line.

"In service-driven sectors, such as IT, media, telecommunications, HR and even recruitment, we are seeing an upward spiral," he said.

The Purcon survey showed London salaries were still the highest. But this position was increasingly challenged by the rest of the South East where most of the service sector and higher-paying firms were based.

Edwards said: "Generally, there has been 21 months of continuous growth. The only problem for purchasers is that manufacturing is showing a downturn. If it were more buoyant, then purchasing salaries would be through the roof.

"Historically, the bulk of purchasing has come in the manufacturing sector. That is now spreading into the service-driven sector, which is coming to par with salaries within finance and IT as procurement increasingly moves away from a transactional to a strategic focus."

He added: "IT and services procurement is a growing interest but it takes a lot to break down the barrier, on both sides."

But Pat Law, national director for Hays Purchasing, said there was a growing trend for commercial procurement professionals to seek public-sector positions.

"The larger corporations traditionally pay more but you don't get the work-life balance. I think there is a big propensity towards the package rather than simply pound notes.

"If you make the move to the public sector you won't go forward in salary terms but you will get better holidays, better flexible working hours and a pension. It's not all about the cash."

SMsep2005

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