The right formula
Buyers rewarded for the right mix of decisions
By Susan Avery -- Purchasing, 12/9/2004 2:00:00 AM
Purchasing professionals with responsibility for the chemicals buy now earn 10% more than the average purchasing professional.
PURCHASING Magazine's 24th annual salary survey found that chemicals buyers now earn $77,100. A year ago, their paychecks averaged $72,200.
The average annual salary for all respondents to the survey is $70,100.
Continuing the trend of recent years, chemicals buyers, on average, typically fare better than many of their peers who purchase other commodities. Electronics buyers make $73,700. Packaging buyers earn $67,000. Metals buyers are compensated $64,800. On the other end of the pay scale, purchasers who source transportation earn $88,900. Services buyers make $85,300. Respondents who source IT are paid $81,400.
Twelve percent of all survey respondents are buyers of chemicals, the same percentage as the past two years. Twenty-five percent are metals buyers, 17% purchase components and 11% source electronics.
Median salary for purchasing professionals who source chemicals is $72,000. Median salary for all respondents is $63,000. A year ago, the median salary for chemicals buyers was $65,000.
Sixty-five percent of respondents who buy chemicals receive bonuses as part of their annual compensation, compared to 55% of all purchasing pros responding to the survey. The average bonus among those who are paid this way is 10% of base pay. An overwhelming majority of chemical buyers who receive bonuses (88%) do so for meeting company financial goals.
In addition, 21% of chemicals buyers receive stock options and 18% of respondents who purchase chemicals earn more than $100,000. For metals buyers, this figure is 20%. Of components buyers, 17% belong to the $100,000 Club. Six percent of chemicals buyers earn more than $200,000.
On average, male survey respondents who buy chemicals earn $84,600. Women chemical buyers make $61,100, a disparity of $23,500. Last year, male chemical buyers received paychecks of $80,100 while women were compensated $53,100.
In 2004, the highest paid male chemicals buyer received an annual salary of $230,000; the highest paid female chemicals buyer earned $165,000.
Average purchasing salaries in chemicals increase with length of employment. College graduates fill the highest ranking purchasing positions, have the greatest purchasing responsibilities, work for the largest companies and generally earn the highest average annual compensation. Purchasing professionals with Certified Purchasing Manager (C.P.M.) accreditation have higher average salaries than those who are not certified. The age threshold for better-than-average compensation coincides with the average age of the profession.
Sixty-eight percent of respondents who indicate that they purchase chemicals are male; average age is 45.6 years. Chemicals buyers on average have 15 years of work experience. Eighty-one percent have undergraduate degrees; 25% have graduate degrees. Thirty-two percent have a C.P.M.; 9% have a Certificate in Production and Inventory Management (CPIM).
Likewise, a purchasing executive's professional responsibilities serve as a benchmark for his or her compensation. As dollar volume and supervisory duties increase, so does income. Sixty-six percent of chemicals buyers have responsibility for purchasing tabs of more than $25 million; 60% have supervisory responsibilities (subordinates).
Sixty percent of chemicals buyers work for companies with more than $125 in annual sales. Fifty percent work at corporate headquarters; 20% are employed at the divisional level and 29% are assigned to a plant site.
Buyers in the CPI
Looking at results of the salary survey another way, purchasing professionals who work in the chemical process industries (the CPI) earned $76,700 last year, 2% more than in 2003.
The average annual salary of purchasing pros in all industries is $70,100; they received an increase of 4%.
Twelve percent of survey respondents say they are employed in the process industries.
Only buyers in the category of miscellaneous manufacturing are better represented; 26% of survey respondents say they work in miscellaneous manufacturing. Eleven percent are employed by the transportation/automotive industry.
Purchasing pros who earn more than CPI buyers work in the communications equipment ($85,800) and computers and related equipment ($84,500) industries. But purchasing professionals in financial services ($75,200), energy/-mining/utilities ($74,700) and electronics ($70,900) make less.
More CPI buyers received bonuses than their peers working in other industries (69% vs. 50%) last year. Bonuses averaged 10%. Salary-survey respondents indicate they receive these bonuses for meeting company financial goals, department cost targets (23%) and cost targets for purchased parts (23%). Respondents in all industries who indicate they receive a bonus took home an additional 10.1% of pay.
Twenty-two percent of CPI buyers receive stock options. For all respondents, this figure is 21%.
Men employed in the CPI earn average annual salaries of $83,300 while women are compensated $60,900. For all survey respondents, these figures are $77,000 and $57,400, respectively. For CPI buyers, these figures for 2003 were $79,700 and $62,800, respectively.
Sixty-nine percent of survey respondents who indicate they work in the CPI are male. They are 46.3 years old and have 15.7 years of experience.
Eighty-two percent of buyers in the process industry have college educations and 36% are certified purchasing managers (C.P.M.), more than in any other industry. The average for all respondents is 26%. Seven percent have a CPIM .
Sixty-four percent of CPI buyers work at companies with more than $125 million in annual sales. Fifty percent are employed at their companies' corporate office while 17% work at the division level. Thirty-seven percent work at a plant.
Industry rank by salary
| Industry | All | Average salary (thousand $) Men/Women | Highest salary (thousand $) Men/Women |
| *Fewer than 10 respondents SOURCE: PURCHASING |
|||
| Communications equipment | 85.8 | 91.0/75.1 | 200.0/150.0 |
| Computers & related eqpt. | 84.5 | 93.3/67.3 | 201.0/105.0 |
| Process industries | 76.7 | 83.9/60.9 | 225.0/120.0 |
| Financial, services | 75.2 | 75.9/73.9 | 200.0/189.0 |
| Energy/mining/utilities | 74.7 | 81.0/62.7 | 170.0/165.0 |
| Electronics | 70.9 | 79.4/54.1 | 230.0/123.0 |
| Transportation/automotive | 70.7 | 76.1/57.9 | 270.0/105.0 |
| Industrial controls/instruments | 70.7 | 77.2/59.7 | 200.0/230.0 |
| Equipment/machinery | 69.4 | 75.2/53.6 | 185.0/144.0 |
| Miscellaneous mfg. | 66.7 | 74.3/56.0 | 248.0/208.0 |
| Wholesale, service ctrs. | 64.3 | 73.1/51.8 | 186.0/134.0 |
| Primary metals/metal fabricating | 58.8 | 63.3/45.5 | 140.0/74.0 |
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