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Edging Forward—October 2013 print edition

Overall salaries climb in 2013 while gap between men's and women's pay remains


October 21, 2013
by By Michael Power

As the leading and largest association in Canada for supply chain professionals, the Supply Chain Management Association (SCMA) is the national voice for advancing and promoting the profession. With nearly 8,000 members working across the private and public sectors, SCMA is Canada’s principal source of supply chain training, education and professional development. Through its 10 Provincial and Territorial Institutes, SCMA grants the Supply Chain Management Professional (SCMP) designation, the highest achievement in the field and the mark of strategic supply chain leadership.

SCMA was formed in 2013 through the amalgamation of the Purchasing Management Association of Canada and Supply Chain and Logistics Association of Canada. Today the association embraces all aspects of strategic supply chain management, including: purchasing/procurement, strategic sourcing, contract management, materials/inventory management, and logistics and transportation.

PurchasingB2B: Print Edition – October 2013
With more fuel now driving Canada’s economic engine, it appears that supply chain salaries are mirroring the increased momentum. Again this year, the average salary for procurement and supply chain management practitioners has gained ground. The 2013 Annual Survey of the Canadian Supply Chain Professional reveals the overall average salary in the field to be $87,908. That’s up from last year’s $85,178 for an average increase of 3.2 percent. The gross base salary, meaning before taxes and other deductions but excluding bonuses and incentives, was $82,800 ($84,337 for SCMA members and $80,132 for non-members).

The survey provided a breakdown of results for the readership of each magazine, as well as for SCMA members. Among overall survey respondents, PurchasingB2B readers specifically reported an average salary of $85,895.
The survey—the largest of its kind in Canada—was fielded in the summer of 2013. For the second year in a row, PurchasingB2B, MM&D and CT&L magazines joined forces with the Supply Chain Management Association (SCMA) on the survey, which saw 2,177 supply chain practitioners respond. The survey has a margin of error of plus or minus 2.1 percent, 19 times out of 20.

Overall, 66 percent of respondents noted they had seen an increase to their base salary this year (68 percent for SCMA members) while three percent had seen a decrease. A total of 30 percent said their base salary had remained the same (28 percent for SCMA members and 34 percent for non-members). As well, 29 percent said they had received a base salary increase of two percent or less, while 41 percent noted an increase of 2.1-to-four percent. Another 12 percent said the increase they received fell between 4.1-to-six percent while eight percent of respondents had gotten a raise of 6.1-to-10 percent. A further nine percent had seen an increase of 10.1 percent of greater.

Many respondents remained hopeful about future salary increases. This year, 68 percent said they anticipated a salary increase (70 percent for SCMA members and 65 percent for non-members) while 31 percent said they didn’t expect their salary to go up.

Portrait of the supply chain practitioner
Based on answers provided, we were able to piece together a picture of the ‘average’ respondent to our 2013 supply chain survey. The average respondent is over 35
(85 percent) and supervises five people. They have 16.7 years
experience in procurement/supply chain management, as well as 9.1 years experience in their current company and 6.7 years of working in their current job. They work 44.3 hours per week (44.8 in 2012) and the annual sourcing volume they place is 28.9 million. Also, 96 percent of respondents said they work full-time in supply chain.

Among respondents, 44 percent said the term ‘purchasing/procurement’ best approximated their job title or role while 19 percent said ‘supply chain management’ and seven percent responded with ‘strategic sourcing.’ Another 10 percent responded with ‘logistics.’

According to Adrian Harrison, team lead at Hays Procurement, the procurement field has seen more negotiation upwards in terms of salaries and higher expectations among job hunters. Some areas, such as manufacturing, finance and the public sector, have seen more job activity recently. The competition for candidates is likely to push salaries up as well, Harrison said.

That competition has also meant organizations are focusing more attention on candidates’ salaries rather than assuming potential employees will be willing to accept lower compensation levels, he noted.
“I would suggest a warming up of the market in Canada, (candidates) expecting more and also probably the influence of people being in permanent jobs,” he said. “To attract them out of a permanent job is going to mean that they’re going to expect more.”
The demand for candidates depends on the industry and the type of roles that clients are looking to fill, said Sean Naidu, national procurement/purchasing recruitment consultant, also with Hayes. Naidu agreed that when it comes to salaries there’s still a lot of negotiating happening.

“A purchasing manager or a senior buyer would be looking at closer to the $80,000 range, depending on the size of the organization, where the person fits and the type of industry,” he said. “(These factors) drive that quite a bit.”

How much money procurement and supply chain professionals took home this year depended on where in the country they lived. Several regions across Canada saw an increase in 2013 over last year. Manitoba/Saskatchewan saw the biggest jump, up to $81,519 from $75,190 in 2012 for an 8.4 percent increase.

British Columbia’s average salary increased from $82,836 in 2012 to $85,831 this year for a 3.6 percent increase while Quebec saw in increase of 4.9 percent—up to $80,493 in 2013 from $76,726 the previous year.

Ontario saw a rise of 3.6 percent, from $83,207 to $86,254, while Alberta’s average supply chain salary—the highest salaries in the country but the smallest increase—went from $101,448 to $103,049 for an increase of 1.5 percent. Only Atlantic Canada saw a drop in the average salary, down 2.1 percent to $74,220 this year from $75,781 in 2012.

Sam Manna, director of client development and talent acquisition with Argentus Search Group in Toronto, noted that while he hadn’t observed much in the way of salary increases in recent years, this year has seen movement upwards in terms of compensation. He attributed that in part to the increased attention procurement has received recently as the field moves from being seen primarily as a cost centre towards a strategic partner aligned in forwarding an organization’s objectives.
There’s also more contract work available, Manna said. “We’ve seen a huge increase in the number of contractors out there within procurement (for) very strategic initiatives where they’re going in to cut costs or consolidate vendors or,” he said. “That’s where the job market is moving.”

Salaries for men and women
This year, the survey again highlighted the difference between what men and women make in supply chain management positions.
Across the board, men’s salaries tended to be higher than for women. For those with 31 or more years of experience, men earned $110,181 while on average women with the same experience took home $92,515. For those with 21-25 years’ experience, men earned an average of $108,770 (up eight percent from $100,610 in 2012) while women earned $85,093—a 2.7-percent rise from $82,784 last year.

For those with five years or less experience, the average salary was $65,479 ($56,125 in 2012 for a 16.6-percent rise) for men. For women, the average was $59,849, representing a 7.5-percent rise from $55,690 in 2012.
Male readers of PurchasingB2B earned a mean salary of $91,320—3.4-percent below the overall male average of $94,492. Meanwhile female readers took home $77,927, almost exactly on par with the female average of $77,842.

Overall, 60 percent of respondents were male, while 39 percent were female; 56 percent of male respondents were SCMA members as compared to 44 percent of female respondents who belonged to the association.

The perception among female respondents was that they earned less than their male counterparts for equal work. In total, 44 percent (47 percent for SCMA members) of female respondents said that they earned equal pay while 55 percent (53 percent among non-members) said they did not. Among male respondents, 79 percent (82 percent for SCMA members) said they thought their female counterparts earned equal pay for equal work within their organizations while 19 percent (16 percent for SCMA members) said they did not.

Cheryl Paradowski, president of the Supply Chain Management Association (SCMA), said that overall recovery signals within the economy tended to point towards continued growth and compensation was generally keeping pace. But when it came to male-female wage differences, Paradowski pointed out that male respondents overwhelmingly thought that salaries at their organization was equal between the sexes, while female respondents tended to feel pay was not equal. While she
expected a gap between what men and women took home,
 Paradowski said she was still surprised by the difference.

“I honestly didn’t think it would be that large,” she said.
“Certainly, I expected there would be some differential but I didn’t think it would be that big.”

Some factors affecting the difference are more easily addressed, she noted. For example, scrutiny of the 2012 survey results revealed more wage parity in the public sector than, for example, manufacturing. Also, men and women relatively new to the workforce show less wage discrepancy than those who have been working for longer, she said.

“We would have difficulty carving out whether there was anything specific to supply chain that was causing the issues or whether they were just general societal issues,” Paradowski said. “It does tend to be women who leave the workforce to have children and is that where the gap starts? Do they end up moving two or three years behind their peers as a result?”

Compensation by sector
Compensation levels also depended on the sector that practitioners worked in, with some areas experiencing increases while others saw dips in compensation. For example, inventory/material control saw the largest increase to $78,342. That’s up 16.6 percent from last year’s $67,140. Meanwhile, consultants saw an increase from $97,243 to $107,695 for a 10.7-percent increase. The salary for supply chain management executives also rose to $108,969 from $103,720 in 2012. As well, those working in the role of purchase/procurement went from $74,036 to $78,685 (up five percent). For PurchasingB2B readers in the procurement role, the average salary was $79,335. Meanwhile, the strategic sourcing category rose from $96,127 to $99,364 a rise of three percent. PurchasingB2B readers in this role made an average of $95,757.

Those with an SCMP earned more than those without the designation. Respondents with an SCMP earned $98,924 on average, compared to $94,835 in 2012. The average salary for those without an SCMP was $84,782 as compared to $83,864 in 2012.

Satisfaction
How appreciated do Canada’s supply chain professionals feel within their organizations? According to the survey, 77 percent said they agreed that their company has come to realize business couldn’t function without supply chain management professionals (27 percent of them said they strongly agree). As well, 71 percent said that during the last year the supply chain role in their organization has increased in influence with senior management, while 22 strongly agreed.

Among respondents, 96 percent said that influence on the job was ‘important’ to them, with 57 percent stating it was ‘very important’. As well, 39 percent said it was ‘somewhat important’ while three percent said it was ‘not very important’.

Overall, 79 percent they were satisfied with the level of
influence they had on the job. Meanwhile, 22 percent said they were ‘very satisfied’ while 55 percent noted they were ‘somewhat satisfied’. Another 17 percent said they were ‘not very
satisfied’ and only three percent answered that they were ‘not at all satisfied’.

Job satisfaction remained high with 87 percent noting they were satisfied with their positions (31 percent said they were ‘very satisfied’). Meanwhile, 56 percent noted they were ‘somewhat satisfied’ while 11 percent considered themselves ‘not very satisfied’. Only one percent said they were ‘not at all satisfied’ with their job overall.
Perhaps not surprisingly, a competitive salary was considered important among 98 percent of respondents, with 74 percent citing it as ‘very important’. A total of 72 percent of respondents said they were satisfied with their salary, while 18 percent said they were ‘very satisfied’ and 54 percent responded that they were ‘somewhat satisfied’. A total of 21 percent said they were ‘not very satisfied’, while seven percent answered that they were ‘not at all satisfied’.
This year, respondents deemed a healthy work/life balance important with 97 percent citing it as ‘important’ and 75 percent calling it ‘very important’. Overall, 74 percent considered themselves satisfied with their work/life balance, 34 percent said they were ‘very satisfied’ while 40 percent noted they were ‘somewhat satisfied’. Eighteen percent noted they were ‘not very satisfied’ and seven percent were ‘not at all satisfied’

Priorities
According to the survey results, the priorities of supply chain practitioners have shifted somewhat in the past few years. Certainly, cost control remains an issue. But while 32 percent or respondents said that cost control was the top supply chain issue they faced last year, that number dropped to 19 percent in 2013.

The next most common issue cited as the top concern was reorganization (14 percent), followed by supplier relationship management (nine percent). Risk management, forecasting and capacity shortages were all cited by six percent of respondents as the top issue faced over the past 12 months.

By and large, despite a persistent gap between the sexes, supply chain salaries continue to keep pace with the standard cost of living adjustment of two-to-three percent.

With the market heating up in certain areas, and the worst of the recession over, it looks like supply chain management and procurement professionals are set to continue to experience increases in their annual salaries.

We welcome your feedback. Contact the editor at mpower@bizinforgroup.ca. Join the discussion at the Annual Survey of the Canadian Supply Chain Professional Webinar on November 21. Register at www.scmanational.ca/annualsurvey.