News Focus: Rise and fall

4 April 2012

10 April 2012 | Angeline Albert

The latest annual CIPS/Croner Salary Survey, released last month, showed that while wages for senior managers have continued to fall, remuneration for junior purchasing managers has risen year-on-year. What’s behind this and what other recruitment trends are affecting the procurement sector?

Rupert Gaster, business director at Hays Procurement, is not surprised at the rising pay rates for junior managers because careers move faster at the start. “It’s easier to make advances as a junior manager than a senior manager, particularly in terms of salary,” he says. He points out that while you are likely to look to the external market to recruit staff into lower level positions, it’s simpler and more cost-effective to internally promote senior staff.

“Senior managers have experienced career stagnation. They are on relatively good packages. A lot of senior management roles are filled internally because it’s easier and cheaper – there’s less of a salary rise – than go to market to recruit.”

Furthermore, Gaster says organisations are like pyramids – there are fewer positions at the top.

Another possible reason for rising salaries for those closer to entry level is the persistent problem of attracting new entrants into the profession. It might be that organisations simply have to pay more to make these roles appeal.

CIPS president David Smith has made attracting talent the focus of his year-long presidency. And SM is supporting this with the ‘Profession of Choice’ campaign to help procurement attract everyone from school leavers to suitable candidates in other departments of organisations.

To help members tap into procurement vacancies, in January the institute launched CIPS Recruitment, a partnership with Barclay Meade, Hays Procurement and Langley Search & Selection.    

Christina Langley, managing director of the latter company, says there is a lack of people to fill entry-level roles and says visiting university and college students has helped her company generate applications for these. “The shortage of junior staff has got worse. A lot of graduate programmes have disappeared,” she says.

This is despite an influx of candidates from Spain, Italy, Greece and Russia looking for work in procurement. From a strategic point of view, recruiters say candidates with UK experience are more advanced, an opinion shared elsewhere. Australian-based recruitment firms, for example, have been asked to find procurement candidates with UK experience to cut costs over the next year.

While there’s a squeeze on the salaries of middle management, as with the wages of more junior staff, directors also saw an improvement in their pay packet with a rise of 14 per cent to £109,410 this year from £96,000 in 2011. This continues a trend evident in the 2011 survey, which found directors’ salaries had risen by 6.7 per cent in 2011 from £90,000 in 2010.

Langley believes this is a consequence of more activity at this level in recent months. “There’s more confidence in the market. In the past six to nine months senior roles have been coming back and there is a lot more movement of senior purchasers.” 

And she says that where interim purchasing directors were put in posts, permanent staff are now being recruited into these roles. Gaster agrees. “Having an interim is an expensive resource, a bit like robbing Peter to pay Paul,” he says.  

The outlook is less positive for procurement professionals working in the public sector who want to move into business. “There’s little evidence of private sector companies recruiting public sector buyers in any significant numbers,” says Langley.

Russell Soan, associate director of procurement and supply chain at Barclay Meade, says there are a lot of hoops for those in the public sector to jump through if they want a private sector position. “The perception is that public purchasers are not re-trainable and are stuck in their ways,” he says.   

In terms of promotion, recruiters are going to those with attributes such as communication skills, vital for supplier relationship development.   

Finally, when it comes to happiness at work, the picture is divided. According to the survey, 50 per cent of the 700 CIPS members quizzed said they had ‘good’ or ‘excellent’ satisfaction levels, while the remainder described it as ‘fair’, ‘poor’ or ‘bad’. Soan’s explanation was that it could be the result of increasing pressure to deliver.

“And we know added pressure doesn’t always lead to job satisfaction,” he says.

☛ A guide to graduate procurement schemes, the next in the series of articles focusing on making purchasing the profession of choice, will appear in the June issue of SM.

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