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On the rise—October print edition

Salaries edge up in 2012


October 22, 2012
by By Michael Power

Brought to you by:

Ricoh is a global technology company specializing in solutions and services that improve the interaction between people and information. Under the corporate tagline, imagine.change. Ricoh helps companies transform the way they work and harness the collective imagination of their employees. Imagine what we can do for you. Find out more at www.ricoh.ca. This year’s survey and editorial report detailing the results was sponsored by Ricoh.

As Canada’s leading and largest association for supply chain professionals, the Purchasing Management Association of Canada is dedicated to providing its 6,500 members, and teh SCM community at large, with important tools to assist in their professional development. The Annual Survey of the Canadian Supply Chain Professional is one of the leading indicators of industry and employment trends within the Canadian supply chain, and provides invaluable insight into where the profession is headed.


Purchasingb2b: Print Edition – October 2012

With the worst days of the Great Recession seemingly over, supply chain management professionals seem to be doing well when it comes to salaries. The overall theme of the Annual Survey of the Canadian Supply Chain Professional for 2012 appeared positive. Every region in the country saw an increase in the average salary, with Alberta, Ontario and British Columbia enjoying the largest salaries, respectively. Atlantic Canada saw the lowest average salaries but the highest jump from 2011.

The survey was fielded in summer, 2012. For the first time Purchasingb2b, MM&D and CT&L magazines joined forces with PMAC to produce the survey, which saw a total of 2,405 supply chain respondents.

Where do you plan to be?

Overall, the news was good. The average supply chain salary for the entire country was $85,178, up from last year’s $82,800. Respondents in Alberta make the most, with an average of $101,448—a boost from the $98,700 earned in 2011—while those in Atlantic Canada earned $75,781, up from $68,700 the year before.

Meanwhile, the average salary for Ontario was $83,207, up from $81,900 in 2011. British Columbia increased slightly to $82,836 from $81,700, while Quebec saw a jump to $76,726 from $71,700. Manitoba’s average salary hit $75,190, a jump from $71,800 last year.

Some sectors saw minor dips in average salaries this year. Services fell slightly to $86,396 from $86,900 in 2011. Healthcare dipped from $80,200 last year to $77,948 in 2012. Trade/wholesale went to $78,478 this year from last year’s $80,500, while government was at $77,968, down from $80,500 in 2011.

Meanwhile, natural resources increased slightly to $101,967 from $98,500 in 2011. Manufacturing increased to $77,750 from $75,400, while education saw a jump to $74,597 from last year’s $74,300.

At just under three percent, this year’s average salary increase exceeds a simple cost-of-living adjustment, said Cheryl Paradowski, PMAC’s president and CEO.

“I believe there are a few contributing factors,” she said. “In spite of the overall economic uncertainty, we do have some boom regions across the country such as Alberta and Saskatchewan where the labour market is very tight and there is compensation competition for top talent. I’m sure that’s reflected in some of these numbers. Conversely, where the picture is not quite as rosy in other parts of the country, you have companies focused on cost-savings, which once again brings supply chain management to the forefront and the talent is being rewarded accordingly.”

Paradowski also noted that higher compensation for holders of the SCMP designation represented an trend in the survey’s results over the past few years. The reasons for this, she noted, included the growth in the number of designation holders, which has reached over 3,000 across Canada. As a result, employers are recognizing the advantage of the designation.

“SCMP holders are able to bring a strategic approach to the supply chain management function within their organizations,” she noted. “For those progressive companies looking to make the transition from tactical to strategic supply chain management, SCMPs are increasingly seen as those with the skills and knowledge to make that happen—and they’re being compensated accordingly and recruited into more senior positions.”

“The short answer is that yes, salaries are on the increase but not at a feverish pace,” said Moore. “There are different functional areas within the supply chain that are definitely at a much more feverish pace.”

Mean salary by sex and years of experience

Women continue to earn less than men in the supply chain. This year, women earned an average of $75, 033, up from last year’s $74,600 but still behind men who earned $91,181 (up from $88,300 in 2011).

Paradowski expressed disappointment at the fact that the 2012 results for women’s salaries came in lower than 2011, with the gap widening as compared to last year. PMAC, she said, had been working to address the disparity through, for example, a panel promoting advancement for women in the field at the organization’s national conference this year. But PMAC had yet to benchmark the result against national metrics to see if the supply chain sector is out of line with overall wage differentials that result from career gaps related to maternity leaves and women’s personal choice to take on less demanding positions that allow for a more manageable work/life balance.

“That comparison would tell us whether we truly have a supply chain-specific issue,” she said.

Despite the overall higher salaries, supply chain saw a dip in influence at the C-suite in 2012. When asked whether they have influence at their organization’s C-level, 40 percent said yes, down slightly from 45 percent in 2011. But when presented with the statement “My company has come to realize our business could not function without supply chain management professionals,” 77 percent agreed (76 in 2011). As well, 71 percent said they thought that during the last year, the supply chain role at their organizations had increased in influence with senior management (unchanged since last year).

Among respondents, 81 percent agreed when asked whether the current economic environment makes their skills and experience more appreciated at their organization, while fewer respondents—61 percent—said that their compensation had kept up with their job responsibilities.

In terms of salary, respondents also appear optimistic about their future prospects. A total of 70 percent (73 percent for PMAC members) answered “yes” when asked if they anticipated a salary increase for next year. As well, 30 percent thought they’d see an increase of two percent or less, while 49 percent expected an increase of between 2.1 percent and four percent. Another 13 percent anticipated an increase of between 4.1 percent and six percent. Only three percent thought they’d get an increase of 10.1 percent or greater.

Respondents also appeared to be optimistic about job prospects in the current market. When asked whether they thought there were more or less supply chain jobs available now compared to five years ago, 69 percent answered “much more”—compared to 74 percent for PMAC members, while 21 percent said there were “somewhat more.” A total of 16 percent saw no difference, while 12 percent said “somewhat less” and two percent said much less.

Tim Moore, president of Tim Moore Associates, a recruitment firm focusing on professionally trained supply chain professionals, agreed that there were more supply chain positions available than during the depths of the last recession.

“Six months ago there was a cautious optimism about employers calling and at least the phones were ringing more frequently then,” Moore said. Now, he noted, the market has picked up even more. “It’s happening, there’s more jobs. It’s brisk but there’s more subtlety now. It’s nice to see that the flood gates are starting to open. But we have to be careful because the dollar levels that (organizations) are offering may not be at an appropriate level. While we’re coming out of this recession they’re still mindful of the bottom line and trying to save dollars where they can.”

C-level influence among supply chain professionals

According to the survey, in the next two years 40 percent of respondents said they planned to be in the same jobs (36 percent for PMAC members) while 38 percent said they would be getting promoted within the same organization. As well, 26 percent respondent that they planned to be working for another organization and another six percent said they planned to change careers.

On a question allowing multiple answers, among those who planned to saw themselves working at another organization, just over half (55 percent) stated they anticipated higher compensation elsewhere. As well, 55 percent answered that they saw little opportunity to advance in their current organization, while 38 percent said they needed a change or new opportunity. Meanwhile, 30 percent cited a lack of appreciate by management for supply chain roles to explain their plan to change organizations.

There have also been fewer layoffs in recent years than during the recession, Moore noted. But he cautioned that layoffs continued to affect the employment market.

“I think it hit its peak in earlier years,” he said. “But we’re noticing a trend of layoffs still out there, still a concern but not at a great level.”

Who are you?
Procurement and supply chain management remain diverse fields. Still, the survey gave a clear picture of the “average” respondent. According to the data, this year’s respondent is 45 years old, has 16.5 years of experience in procurement or supply chain management and has been in their current job for just over nine years. The personal average spend volume is $24.5 million; they supervise an average of nine people; and work 44.8 hours per week (43.8 hours for PMAC members).

As well, 37 percent answered that they work in purchasing/procurement, while 24 percent said they work in supply chain management. Among respondents, 62 percent were male while 35 percent were female; 47 percent currently hold or are working on their SCMP designation.

In terms of company hierarchy, 43 percent classify themselves as managerial, 27 percent as operations/tactical, 25 percent as strategic, 16 percent said they were they were clerical/administrative and 10 percent answered executive.

Pay rates follow the pattern, with supply chain management executives earning an average of $103,720. Those with purchasing or procurement in their title brought home $74,036, while strategic sourcing professionals earned $$96, 127.

Mean salary by industrial sector

Again this year, controlling costs remained high on supply chain managers’ minds. When asked about the top supply chain issue they anticipate facing during the next 12 months (unlike 2011, only one answer was allowed) 32 percent of respondents said cost control—down from 57 percent in 2011—while just seven percent said supply relationship management (down from 39 percent last year). Another nine percent cited risk management (32 percent in 2011) while three percent noted environmental responsibility/sustainability (31 percent last year).

New to the survey this year is a section of questions regarding sustainability and the environment. When asked whether their companies had an environmental management plan, 66 percent of respondents answered yes (69 percent for PMAC members) while 34 percent answered no. Just over half (55 percent) of all respondents said their organization reported on environmental performance (59 percent for PMAC members) while 39 percent said their company has a formal supply chain management policy for environmental sustainability.

Supply chain satisfaction
Turns out, procurement and supply chain managers remain rather happy with their jobs. When asked about overall satisfaction with their lot, 87 percent said they were satisfied. Among those, 31 percent said they were “very satisfied,” while 56 percent noted they were “somewhat satisfied.” A total of 10 percent answered that they were “not very satisfied” while just two percent said they were “not at all satisfied.”

What factors contribute to this satisfaction? Among respondents, 97 percent said a competitive salary was important to their job satisfaction. When asked how jsatisfied they were with their salary, 72 percent said they were “satisfied,” 19 percent said they were “very satisfied,” and 53 percent said they were “somewhat satisfied.” Another 19 percent said they were “not very satisfied” while seven percent cited “not at all satisfied.”

A healthy work/life balance also remains key, with 96 percent saying that balance was important, 70 percent citing it as “very important,” 25 percent saying it was “somewhat important” and three percent answering that it was “not very important.” Overall, 81 percent said they were satisfied with the work/life balance their careers afforded them.

On-the-job influence among supply chain managers ranked high, with 95 percent of respondents saying it was important to their overall satisfaction and 54 citing it as “very important.” Another 41 percent said it was “not very important,” while three percent said it was “no at all important.” Overall, 79 percent said they were satisfied with the influence they had on the job.

Mean salary by classification

When it comes to corporate social responsibility (CSR), 81 percent said it was important, while 16 percent said it was “not very important.” A total of 79 said they were satisfied with the CSR policies of the organization. In terms of sustainability practices, 80 percent said it was important (27 said “very important”) while 17 percent said “not very important.” Overall, 76 percent were satisfied with their organization’s practices.

With those satisfaction levels—along with salaries that seem to be keeping pace—supply chain professionals have something to be thankful for going into 2013.

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 pmac.ca/2012AnnualSurvey.