Salaries start to rise in tight purchasing job market
By Anne Millen Porter -- Purchasing, 1/13/2000 2:00:00 AM
Purchasing departments plan more hiring for 2000 than they did for 1999, according to a recent Purchasing survey. And due to a dearth of qualified job candidates, purchasing pros say there is growing pressure to offer bigger pay and better benefits--both to attract new hires and to retain current employees.
This year, a healthy 46% of purchasing professionals responding to Purchasing's annual Employment Survey say their department is planning new hires for the coming year, compared to only 24% in 1999.
Filling these positions won't be easy, however.
The bulk of planned purchasing hires for 2000 are either staff (buyer, purchasing agent) or support staff (clerk, administrator) positions. Seventy-three percent of survey respondents anticipate no relief from current tight labor conditions--especially for lower-level positions. Twenty-three percent expect purchasing labor conditions to grow even tighter in the coming year.
As it stands, purchasing departments are encountering serious difficulties turning up qualified job candidates. Zero percent of the survey population rates the current pool of purchasing job candidates as "highly qualified." And while 46% say applicants are usually "adequately qualified," another 50% rate most job aspirants as either "underqualified but trainable" (46%) or "underqualified and not trainable" (4%).
The purchasing professional for a Southern motor manufacturer complains that job applicants possess "lack of knowledge and experience about motors." Meantime, the PM for a New Orleans-based manufacturer of electronic components says he has "a less qualified labor pool from which to draw."
Buyers' wages will rise
Half of this year's Employment Survey respondents report worker retention problems in the past year. Virtually all of them attribute the job hopping to higher wages and better benefits elsewhere. For example, the senior buyer for a Midwest farm equipment manufacturer reports losing "three employees in the last two years due to pay scales." The PM for a Southern maker of electronic components says people are being lured away by "higher pay." The purchasing pro for a Midwest manufacturer of HVAC appliances remarks that "tighter labor markets and heavier work demands without perceived adequate compensation [is causing] employees to leave." Meantime, the purchasing pro for a Mass.-based rebuilder of injection molding machines says, "Being a small company, we can't compete with those who offer better benefits and higher salaries."
The problem is even worse in regions where the cost of living exceeds the national average. For example, the PM for a New York-based supplier of building products says the regional purchasing labor pool is tighter than the average, due to the "high cost of living, high taxes, higher energy costs, and high utility costs."
Sixty-one percent of purchasing pros surveyed reports rising pressure on procurement salaries (46% say the pressure is moderate while 15% classify it as strong). To attract new hires, the purchasing pro for a Midwest-based petroleum contracting firm will offer "job security and pay." The PM for a Southern maker of industrial electrical motors will offer better salaries and benefits. Quite a few Northeast contacts will offer bigger pay in 2000. The purchasing pro for one Northeast manufacturing interest says his company will "raise perks and benefits" as a means to attracting job aspirants. Another says his company will be offering "more incentives."
The upshot of all this upward wage activity: "Inflation must be around the corner," says the cost management specialist for a Big Three automaker's customer service division.
Fewer managers are wanted
New middle- to upper-management positions in purchasing look to be relatively scarce in 2000. Last year, 28% of survey respondents said their firms had filled middle management positions in 1998. Meantime, 24% of those anticipating new hires said middle management positions would be created in 1999. This year, by contrast, only 17% say their companies will fill middle management purchasing jobs in 2000. Fewer than 8% anticipate any hiring at the executive management level.
Purchasers' job-market perceptions follow similar lines. Fifty-eight percent think the market for executive positions is tight. An even greater 65% of respondents characterize the general market for middle management positions as tight (50% say "somewhat tight", 15% say "very tight"). Zero percent see the middle-management job market as loose, demonstrating, perhaps, that companies have not been tempted by growth to undo the progress they made earlier this decade in reengineering the supply management function.
In view of expanding hiring plans at the staff level of purchasing, a surprising 61% of the survey population sees the job market for buyers and purchasing agents as tight, versus 23% who say the availability of staff level jobs is comfortable and 12% who say availability is loose.
Suggesting that purchasing departments have made less progress than they might wish in trading "tactical" for "strategic" duties, the loosest perceived segment of the purchasing job market comes at the support-staff level. Thirty-five percent of respondents say the market for support staff jobs (clerks, secretaries and administrative assistants) is comfortable and 19% rate the low-level purchasing job market as "loose."
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