If higher pay drives better supply management performance, what constitutes higher pay? Well, the answer is it depends on a lot of factors, including title, location, education, and gender.

Purchasing Magazine and the Institute for Supply Management both offer annual salary surveys that provide a baseline into what supply management organizations are getting paid and the factors that influence salary levels.

To give credit where its due, Purchasing has been providing this service for more than 25 years. Ironically, ISM just launched its innagural salary survey this year. In addition, Purchasing’s complete salary survey results are available for free. Purchasing also offers a good historical perspective of salary trends. (The good news: supply management compensation has increased 134% since 1985, the year Purchasing launched its first survey.)

ISM offers a free salary survey summary. But you must be a member to access the complete results.

Despite these differences, the most recent returns from each organization are eerily similar. I have created a handy comparison table of average salaries by job title below (click image to enlarge):

Behind these high-level stats is a wealth of insight to help supply management organizations benchmark their pay competitiveness and help individuals determine how to move up the pay scale. Some high (and low) lights echoed in both surveys:

• Experience counts, particularly after a decade: pay variances between those with fewer than five years experience and those with six to ten years experience was minimal. However, supply managers in the field 11 -20 years, reaped a 20% pay premium over those with less than a decade of experience. Those with more than 20 years experience typically get another 20% bump in pay.
• Education influences pay, particularly the right type of education: Those with a bachelor’s degree earned 32% more than those with no college degree. And those with a master’s earned 25% more than those with only a bachelor’s degree. Those with an MBA were the top earners, followed by those with a technical degree. These findings echo those I uncovered when investigating the hiring intentions of CPOs last year.
• Pay discrimination still thrives: Both surveys found that women are still paid about one-third less than men in similar supply management roles. However, one leading indicator suggests that this may be changing. Specifically, the glass ceiling is being broken. Both studies report an increase in the number of women in top procurement and supply management roles, such as Christie Breeves, CPO at Alcoa, Theresa Metty, former CPO at Motorola, and Diane Deering, VP of Supply Chain at Alliant Techsystems, Inc.
• Performance-based pay on the rise: About 60% of supply management employees now earn bonuses as part of their compensation. Purchasing reports that the use of such performance-based bonuses has been rising steadily, up 5% in the last year alone. Financial goals and profitability are the leading bonus criteria, with cost targest and saving reductions also playing a role.

I encourage you to read the full survey results to benchmark your organization’s pay competitiveness and determine if you will need to make adjustments to recruit and retain top talent.

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