Ask any organization where they want to be. Though specific terminology will differ, their answers will all point toward one particular goal. Whatever their size, their industry, or their short and long-term goals they're hoping to attain world-class status.
Even in a business world that's increasingly tech-enabled, organizations know this means investing in talent. Those with mature Procurement organizations are looking to identify the next generation of professionals. Others are in search of executive-level talent, leaders who'll advocate for Procurement and pave the way for function that's more attractive to applicants and internal stakeholders alike.
Achieving world-class status takes time, money, and effort. This is particularly true where talent is concerned. With the number of open positions outstripping unemployment, wooing promising candidates is perhaps more challenging than at any point in recent years.
What's more, accepting a more strategic role has empowered Procurement professionals to demand higher and higher salaries in recent years. Hays, a UK-based recruiting firm, found that 69% of Procurement and Supply Chain practitioners saw their pay increase during 2017. This affected professionals from the Analyst-level all the way up to executives like the Chief Procurement Officer. Hays expects this trend to continue. Their Salary and Recruiting Trends Guide for 2018 also found that over half (56%) of employees are unhappy with their current compensation. Growing discontent could mean growing salaries as more organizations look to invest in their spend management function.
What should companies expect to pay an experienced Sourcing Professional?
According to Source One's Supply Chain Staffing specialist, Andy Jones, the answer will vary slightly based on factors including location and spend category. Staffing for Procurement jobs across a wide geography, Jones' has seen the impact cost of living can have on salaries. "Someone headquartered in Philadelphia," he suggests, "will almost always command a higher salary than a similarly-qualified resource based in Central Pennsylvania. In either case, however, companies should expect to break out the checkbook."
Sourcing professionals with five years of experience, the sort capable of overseeing numerous spend categories, can command around $80,000 a year. Jones is quick to point out that this figure does not include a potential bonus or any additional benefits. A contractor or full-time hire to manage this Sourcing Specialist can easily collect more than double that. In Philadelphia, Jones has seen such professionals - tasked with managing all direct or indirect spend - consistently earn over $180,000 a year.
In addition to bonuses, organizations need to consider a wealth of additional costs when they go to market for new Supply Chain hires. Whether you're leveraging the services of an external hiring organization or your own HR staff, posting to job boards, conducting background checks, and (eventually) on-boarding a new hire.
The latter process can prove especially costly. MIT's Sloane Review has found that employees take anywhere between 8 and 26 weeks to reach full productivity. More senior hires will - predictably - take longer to develop than their junior peers. However long this period takes, the organization is effectively losing money until it concludes.
The Society for Human Resource Management has found that the average cost-per-hire is over $4,100 and that it takes organizations an average of 42 days to fill open positions. No average can accurately reflect the rigors of identifying world-class Procurement talent, but these figures should give organizations an idea of what to expect. They cannot afford to enter the market for Procurement talent without thoroughly assessing both their resources and their particular requirements.
When in doubt, Jones suggests leveraging the budget optimization and decision support services of a supply chain recruiter. Bringing Procurement talent on-board is a nuanced, multi-stage process. Even world-class organizations can benefit from additional support. Want to learn more? Reach out to Source One and ask about their end-to-end staffing support.