(Note: Salaries can differ significantly based on industry, experience, and company policies. The above figures are estimates taken from glassdoor.co.uk.)
The employees paid the most are usually the ones who bring in the maximum revenue for the company. Usually, these roles are client-facing, like the sales department. However, companies focus just as much on cost control as on increasing their top lines, and it has become necessary due to global competition and tightening profit margins which bode well for people in departments like procurement, who play a crucial role in cost control.
It is possible to objectively measure a purchasing manager’s benefit to the company’s bottom line by assessing the amount saved in purchasing goods and services from vendors. Procurement managers can have objective targets, and their ability to meet them decides their compensation, eventually leading to a situation where the procurement department is not considered a cost centre but rather a cost-saving centre. As a result, there is better payment, especially if cost targets are met or exceeded.
Some companies have begun to offer larger variable compensation packages for these roles, which means that the total compensation for procurement managers depends a lot more on their actual performance as determined by meeting their cost targets. It is best to ask a potential employer about their compensation practices beforehand.
Salaries Across Industries
Regarding compensation, the most lucrative sectors for procurement managers are those with a large chunk of the final value of the product sourced from external vendors. This makes sense, given that purchasing managers would significantly affect how much these things cost. Therefore, sectors with many raw material imports or contract manufacturing would fall under this category.
Sectors which require a lot of technical know-how and skills are also considered good picks for procurement managers. For example, in the automobile or aerospace manufacturing sector, procurement managers may be expected to have engineering degrees and expertise in operational management, inventory management, supply chain optimisations, etc. These industries would pay highly for these professionals.
Procurement managers can have varying degrees of responsibilities in different companies. Some businesses are only required to purchase goods or services at the lowest possible price. Whereas in other companies, they need to be supply chain experts and play a crucial role in maintaining peak production and operational efficiency. Because of this, the pay for these specialists also varies according to what is needed in each business environment.
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