Buyers bring home more in 2005
The highest paid female purchasing professional sources metals
By Susan Avery -- Purchasing, 12/8/2005
Metals buyers got a big raise in 2005. Respondents to Purchasing magazine’s salary survey responsible for buying metals had average earnings of $76,300 this year, an increase of 18% over 2004 when metals purchasers made $64,800. All other buyers were compensated $78,500 in 2005, giving them a raise of 12% for the year.
Buyers of information technology products ($100,300), services ($96,500) and transportation ($92,200) all make more than metals buyers. Purchasers of MRO (maintenance, repair and operations) goods ($70,100) and office equipment and supplies ($55,500) make less. As in the past, more buyers of metals than other commodities responded to the salary survey: Twenty-six percent of respondents say they source metals, 18% buy components, 11% purchase chemicals and 9% acquire electronics. And the proportion of respondents who buy metals is growing. Last year, metals buyers made up 25% of the survey sample. The year before, this figure was 24%. Median salary for purchasing professionals who indicate they buy metals in 2005 is $66,000. Median salary for all respondents is $69,000. A year ago, median salary for metals buyers was $60,000. For all buyers, it was $63,000. The highest paid female purchasing professional to respond to the magazine’s salary survey is a metals buyer. She earned $350,000 in 2005. Eighteen percent of metals buyers belong to the magazine’s $100,000 Club, compared with 22% of all respondents. This means they earn more than $100,000. Services (43%), IT (37%) and machinery (32%) purchasers all are better represented. Two percent of respondents with metals-buying responsibility earn more than $200,000. Fifty-eight percent of respondents who buy metals receive bonuses as part of their annual compensation. For all respondents, this figure is 60%, the highest it’s been in the history of the salary survey. IT, services and machinery buyers are more likely to get bonuses; components, MRO and office equipment and supplies buyers are less likely. Still, metals buyers who receive bonuses report slightly more money in their paychecks than their peers who purchase other commodities (12.5% vs. 11.9% of base pay). Eighty-five percent of metals buyers got bonuses for meeting company financial goals. Eleven percent of metals buyers receive stock options. Male survey respondents who buy metals earn on average $81,700. Female metals buyers make $61,600. Last year, male metals buyers received paychecks of $70,100, while women were compensated $51,700. For 2005, the highest paid male metals buyer earns $291,000. Seventy-three percent of metal buyers who responded to the survey are men. This figure is the same for buyers of machinery. More transportation buyers (81%) are male. As in years past, results of Purchasing’s annual salary survey show professional responsibilities serve as a benchmark for compensation: As dollar volume and supervisory duties increase, so does income. Forty percent of metals-buying respondents have responsibility for purchasing tabs greater than $25 million. Sixty-two percent have supervisory experience (subordinates). And as company size (based on annual sales) increases, so do salaries. Purchasing pros employed by companies with more than $125 million in annual sales report better-than-average compensation. Average salary for those working at the divisional level is higher than for those at the corporate level. Plant locations offer the lowest average salary. Many metals buyers work for small companies: Fifty-four percent of metals buyers are employed by companies with less than $125 million in annual sales. Fifty-three percent of metals buyers work at corporate headquarters; 20% are employed at the divisional level; and 27% fulfill their purchasing responsibilities at the plant site. At the same time, average salaries rise in step with length of employment; college grads generally receive the highest average annual compensation. Buyers who hold certified purchasing manager (CPM) qualification have higher average salaries. The age threshold for better-than-average compensation coincides with average age of buyers in the profession. Metals buyers are 46.8 years old and have 15.9 years of experience. Only buyers of machinery (16.8 years) and electronics (16.6 years) have more. Fifty percent of metals buyers have college degrees; 20% have graduate degrees. Twenty-one percent have a CPM; 8% have a Certification in Production and Inventory Management (CPIM) qualification. Metals fab buyers underpaid Although purchasing professionals in the primary metals and metals fabricating industries also got big raises in 2005, they still did not fare as well financially as their colleagues in other industries. Metals industries buyers earned $72,300 in 2005, according to results of the magazine’s salary survey, an increase of 23% over 2004 ($58,800). All respondents to the survey earned an average $78,500—12% more than last year.Purchasers employed by the metals industries are among the lowest paid in the profession. Only survey respondents who indicate they work in the "multiple sectors" industry report lower earnings for 2005 ($65,800). On average, purchasing professionals in the computers and related equipment industry earn $94,500; these buyers got a 12% raise in 2005. Median salary for buyers in the metals industries is $61,000. Seven percent of respondents indicate on their survey form that they work for companies in the primary metals/metal fabricating industry. At 28%, miscellaneous manufacturing is the industry that’s best represented among those responding to the survey. Eleven percent of respondents are in the process industries. Just 2% are employed by a computer company. Metals industry buyers have responsibility mainly for purchasing metals. Seventy-eight percent of respondents who work in the metals industry say they routinely buy the commodity. For all respondents, this figure is 26%. Eighteen percent of respondents who work in the metals industries earn more than $100,000, making them members of Purchasing’s $100,000 Club. For purchasing professionals in all industries this figure is 22%.
Sixty-two percent of respondents in the metals industries receive an annual bonus, compared to 60% overall. For these purchasing professionals, the average bonus amounts to 15% of base pay, higher than the overall average (12%) and more than buyers employed in other industries. More buyers in the process industries (69%) and computers and related equipment industries (67%) got bonuses in 2005. Purchasing pros in the industrial controls/instruments and wholesale durable goods/service centers were paid bonuses of 13% in 2005. Metals industries purchasers receive bonuses for meeting company financial goals (84%), supplier quality improvements (10%) and meeting cost targets for purchased parts (9%). Ten percent of buyers in the metals industries receive stock options. Men employed in the metals industries earn average annual salaries of $81,300 while women receive $47,300 in yearly compensation. For survey respondents employed in all industries, these figures are $85,900 and $62,200, respectively. Seventy-one percent of purchasing pros in the metals industry are male. Average age of all purchasers in the industry is 47.9 years; these buyers have 15.6 years of experience. The average age of respondents in all industries is 46.2 years; they have 15.6 years of experience. Fifty-three percent of buyers in the metals industry have a college education; 11% hold a graduate degree. Fifteen percent hold CPM qualifications and 7% have a CPIM. Fifty-three percent work at their companies’ corporate office, while 14% work for a division of their companies, and 32% work at a plant site.
| Commodity | Buyer | Senior Buyer | Purchasing Agent | Purchasing Manager | Commodity Manager | Supply chain Manager | Materials Manager | Purch/matls Manager | VP Purchasing |
| Metals | 49.2 | 58 | 49.3 | 71.4 | 79.7 | 92.5 | 67.6 | 115.5 | 149.9 |
| Chemicals | 48.5 | 62.6 | 61* | 75.2 | 89.1 | 73.8* | 81.8 | 122.8 | 136.0* |
| Electronics | 44.7 | 59.1 | # | 73.8 | 89.1 | 100.8* | 81.8 | 129.7 | 187.6* |
| Packaging | 48.8 | 62.7 | 56.5* | 79.1 | 74.4* | 85.0* | 69.3* | 134.6 | 102.7* |
| Components | 45.5 | 58.4 | 49.0* | 75.3 | 95.9 | 104.2 | 73.3 | 112.8 | 197.0* |
| Machinery | 49.6* | 76.4* | 36.5* | 84.6 | 104.8* | # | 94.0* | 120.0* | 150.8* |
| MRO | 48.2 | 66.5 | 47.2* | 79.8 | 79.2* | 76.0* | 69.2* | 95.7 | 132.0* |
| Office Equipment/ Supplies | 45.8* | 55.9* | 41.3* | 64.9 | # | 43.5* | # | 74.0* | # |
| Transportation | 59.0* | 62.5* | # | 94.4* | 90.0* | # | 89.3* | 131.5* | # |
| IT | 38.3* | 69 | # | 90.9 | 98.0* | 86.8* | # | 124.8 | 234.2* |
| Services | 46.7* | 78.1 | 69 | 91.8 | 82.9 | 91.9* | # | 149.1 | 126.0* |
| * = Fewer than 10 respondents. # = One or no respondents. SOURCE: PURCHASING | |||||||||
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