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Whenever I run courses on How to Sell to Procurement, it is surprising how many Sales Professionals think that the Procurement Manager on the other side of the negotiation table gets rewarded financially if they do a good deal.

Unlike a Sales Professional's salary, a Procurement Manager who is in permanent employment gets a salary that is a basic figure and there is no direct link to the size of deals or benefits / savings they negotiate.

Packages (including car allowances, health care etc) are usually an extra 30-50% on top of the basic salaries.

The basic salaries for permanent staff are published in various Salary Surveys and I was sent one the other day for UK staff in 2011/2012.  Let's see what the figures look like.

Buyer / Senior Buyer: £30,000 - £50,000 per annum.

Manager: £45,000 - £75,000 per annum.

Head of Category: £55,000 - £110,000 per annum.

Director / Chief Procurement Officer: £70,000 - £200,000 per annum.

Some trends:

·        Category Managers and Directors in charge of the IT Category (Software, Telecoms and Hardware) typically earn more than those working in the non-IT Categories (e.g. Marketing, Facilities or HR).

·        Salaries in the Financial Services sector are the highest, especially in Investment Banking. Retail Banks offer salaries on a par with Pharmaceutical and Technology sectors.  Insurance companies are normally lower that the Retail Banks, offering a better work/life balance instead.

·        The South East (including London) attracts the highest salaries, followed by the South West, North (including Scotland) and the Midlands respectively.

·        30% of those working in Procurement did not get a salary increase last year - this is even worse in the Public sector where more than 50% did not receive a salary increase.

·        70% of people get a bonus every year.

How are bonuses calculated?

Bonuses are usually paid annually and are based on overall company performance (this determines the size of the overall bonus pot) and individual annual review rating (this determines how much of the pot is allocated to each individual).  Payment can be as a lump sum in cash or in shares.  A bonus typically ranges from between 1- 20% over and above a basic salary, with only the highest performers qualifying for the higher pay out. About 10% of those working in Procurement get an annual bonus of more than 20%.  This type of bonus is sometimes paid out over multiple years (to encourage the highest performers to commit to their organisation long term). 

To your success

Wanda 

Note from Wanda

I recently had a week's holiday in Åre, Sweden. It was my first visit to Sweden and I loved it. Åre is a ski resort and an outdoor activity centre. We spent our week packing in as many activities as possible. We were very lucky to be able to go out on a snow mobile at night (going 50km per hour over an ice lake), walking across the wilderness in snow shoes and building a log fire to boil water for a hot drink, going down a zip wire in the woods and the highlight of the week, going dog sledging with 12 very fit dogs.

We rarely sat still and were full of energy. That brings me to the thought of this month - IF YOU WANT SOMETHING DOING, ASK A BUSY PERSON. Those who are already on a roll won't notice the extra task. Plus - if you get busy yourself, you will soon benefit from the energy it gives you.     

Do please give me feedback on what you think of my Newsletter and what topics you want to see covered next, by contacting me at wanda@amycus.com.