Procurement and Vendor Management Salary Guide January 2023
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PROCUREMENT & VENDOR MANAGEMENT Background Indicators and feedback from our clients are that some are beginning to take a more cautious approach to long term permanent workforce expenditure. With economic uncertainty and fear of recession, we have seen Permanent recruitment activity soften slightly. We saw this most notably in the last two quarters of 2022, with a slight slowing of permanent activity, but uptick in Interim recruitment. Latest figures from KPMG/REC UK Report on Jobs for January 2023 mimic our own findings, reporting ‘greater economic uncertainty, pressure on clients’ budgets and low candidate numbers all dampening hiring activity at the end of 2022’ while ‘billings for temp staff rose moderately.’ Continuing war in Europe, covid recovery, ongoing fallout from Brexit, dubious ‘mini budgets’, the cost-of-living crisis, increased government debt, pressure on wages, scarcity of talent, restricted resources, and volatile supply chains; and the possibility of a sustained recession in the UK and globally all point to a somewhat uncertain employment and recruitment market. On the positive, the sector is changing fast and people with the right skills and experience are in are in demand, pointing to an optimistic outlook for talented and ambitious Procurement and Vendor Management Professionals in 2023.
SALARY GUIDE - PROCUREMENT & VENDOR MANAGEMENT The following table provides an annual Salary Guide for various level of Procurement and Vendor Management specialists ~ focusing on ‘Indirect’ Specialists in FTSE100/250 & Fortune 500 organisations with which we are working.
Despite some levelling of salaries across industry sectors, there are still sectors that pay better than others and benefits/bonus packages can show significant disparity between sectors, but there are plenty of exceptions as the race for talent has become more intense. Some companies are having to go beyond their maximum rates to attract essential talent from other sectors.
Investment Banking / Hedge Funds / Financial Technologies sectors continue to offer the highest salaries and bonus potential ahead of other sectors, however it should be noted almost all these roles are Central London located with the associated cost-of-living implications. Investment Banks and other Financial Services organisations continue to offer very competitive packages. Bonuses in these sectors remain higher than the industry average and could be 30% or more at senior levels, usually based on a combination of individual and company performance. At Category Manager level the total bonus potential is more likely to be at circa 20%, but this can vary significantly between organisations. A company car is unlikely to be included in the package. Retail Banking / Insurance / Other Financial Services sectors rates and packages/bonus a little way behind Investment Banking and Hedge Funds. Due diligence and supply chain risk are now a main driver in this sector, and candidates with these skills combined with exceptional SRM and technical data & analytical skills are in very high demand. Bonuses are normally in the 10% to 25% range, but packages don’t usually include a car allowance. Pharmaceutical sector can offer some of the best overall employment packages, with good and consistent bonus potential, share options as well as competitive pension and benefits. A company car or car allowance is usually included. There is the sense that the credibility and desirability of working in this sector has increased since pandemic; and this sector continues to attract and secure the very best talent. IT / Technology: There is quite a disparity of rates across the technology sector, however most packages come with car/car allowances and reasonable bonus potential and additional benefits. Increased demand for Technology and IT savvy procurement and supply chain specialists in this sector has seen an upward rise on salaries/package. Retail: Traditionally rates in this sector have not been as high, however retail organisations have needed to change their business models to reflect trends to online shopping and critical restructuring of supply chain post pandemic has seen rates rising. With the retail supply chain model changing so fast supply chain efficiency, security and corporate responsibility are key issues in this sector; and candidates who are comfortable in this rapidly changing and dynamic environment, with technology and data analysis skills can prosper. Challenges in global supply chains has led to a demand for technology and IT procurement professionals that can challenge traditional supply chain models and create innovative solutions to improve supply chain security, visibility, and risk. Overall retail salaries for indirects procurement professionals have not kept pace with other sectors. Energy and Utilities sectors: We have continued to see uplift in salaries with demand partly led by renewables sector growth. Traditionally salaries in this sector have not been quite so strong, but we are seeing rates improving to attract the level of talent needed. Good working patterns, pensions and benefits compensate to some extent. Manufacturing / FMCG / Automotive sector salaries are usually below those in the Technology sector; however, benefits packages are reasonable and often a car allowance will be part of the package. The unprecedented supply chain challenges from pandemic, war in Europe and Brexit have driven demand for exceptional supply chain professionals to resolve UK and global supply chain component, raw materials, and labour shortages. This sector has been hit hard in last 3 years, but talented supply chain professionals that understand supply chain restructuring and can work with technology solutions to resolve supply chain and supply chain visibility challenges will thrive and are in very high demand. Not for Profit have continued to see a slight increase in salaries as many organisations recruit higher level procurement professionals with the aim of making the organisation more commercial. Addition of things like London Weighting and additional market supplements to bring salaries up are more common, but salaries are still well below market rate. Post pandemic, popularity of working in this sector has, we believe, increased as individuals have assessed their life choices and objectives and decided they would like to work in a sector that aligns better with their values and job satisfaction drivers.
Digital Transformation: Candidates who understand data analytics especially well placed to secure a competitive salary and package. Understanding what data can do and having the ability to extract meaning and value from it plays an important role in being able to map the future and adapt to change. Candidates that combine technical understanding with effective SRM and influencing skills will secure great roles and strong packages. The pandemic accelerated many companies’ digital transformation plans, changing the working landscape enormously in a brief time. This has speeded up existing growth in technology and has clearly influenced the categories and skills demanded throughout Procurement and Supply Chain disciplines. Demand for Talent in Supplier Risk, Supplier Governance specialist will remain high, and we believe demand in these disciplines will continue to increase.
Information Technologies: SAAS, Software, Cyber, Apps Development, Hardware, Datacentres, Infrastructure and Networks specialists: Required across most sectors, but we have seen the greatest demand within FinTech, Media, Pharma, Logistics & Supply Chain organisations. Businesses are having to very rapidly change their work and supply chain models to ensure competitivity, and technical ‘hit the ground running’ procurement specialists across most Hardware and Software categories, are in strong demand. Digital Marketing specialists: Required across almost all sectors, although changing working and customer interfacing methods in Banking, Retail and Pharma sectors have seen the greatest demand. The Pandemic brought a rapid and unprecedented change in how business market, supply and buy, and the demand for Interims that can define and implement these new digital marketing processes has seen a significant increase in the demand for Interims in this area. HR specialist: Changing work pattern and the challenges of securing the best talent has led to an urgent increase in demand for HR specialists, particularly within Managed Service Providers and Recruitment sectors. Interim specialists with solid recent experience in these sectors can secure great roles. Logistics and Supply Chain specialists: Ongoing supply chain volatility Ukraine/Russian war, Brexit, and ongoing fallout from the global pandemic; continues to focus the necessity for effective Logistic and Supply Chain Strategies and Management and the people to support them. Vendor/Risk Management Specialists: Procurement specialist with solid Supplier Risk Management experience is still very much in vogue, and candidates with a strong experience in Fraud, Quality, Compliance, Cost and Delivery strategy and implementation are being snapped up fast. Interims with proven skills in reducing supply chains risk and de-carbonisation are also highly prized.
Rate Increases In 2022 as specialist permanent roles remain unfilled, demand for specific skills increased and underlying salary inflation rose, and we saw upward pressure on salaries. Economic data is suggesting that UK inflation has now peeked and as we move into 2023, we anticipate average salaries amongst our corporate clients following national average rises, possible slightly ahead of other sectors (at circa 1% ahead of average salary inflation), as we have seen over the last couple of years. Early estimates for November 2022 from the ONS indicate that for UK Payroll employment, median monthly pay increased by 8.0% compared with November 2021, and we saw comparative increases in our sector in 2022.
Many skills and category experience will remain hard to secure:In 2022 we undoubtedly saw skills shortages in a candidate led market and although recession will bring some redundancy labour to the market, we believe that many of high demand and specialist procurement and supply chain skills will remain in short supply. Organisations will continue to find it hard to recruit people that ‘tick all the boxes’, and some flexibility and creativity as to team skills will be required by some employers if they want to successfully fill all their roles. Procurement & supply chain people are largely resilient to recessional challenges: We saw a slowing in the market in the tail end of 2022 and there was a suggestion that many potential candidates are bunkering down to weather the potential downturn and adopting a ‘better the devil you know attitude.’ Economic uncertainty in 2023 will certainly have some effect on the labour mobility, however survey data (ours and others) suggests that Procurement & Supply Chain professionals have a more positive and less risk averse attitude to job mobility at this time. A Beaumont Select poll (January 2023) indicated that only 8% of Procurement people will not seek a new job because of economic uncertainty, with 52% seeking better salary and package, 17% seeking more flexible working and 23% seeking more work challenges. Hybrid working has changed candidate expectations and job packages: The significant trend towards fully remote or hybrid working models since pandemic has slightly softened regional differences in salaries. Companies that require their staff to be in the office almost all the time, really need to offer more competitive salaries to increase the attractiveness of these roles, when so many professionals in the sector have an expectation of employment packages that offer flexible hybrid working options. Sustainability, corporate responsibility, and ethics: Prospective employer's social and brand values would appear to be a much more significant consideration for many candidates than would have been 2 or 3 years ago. We expect this trend to continue with more jobseekers, (particularly amongst younger people) seeking opportunities with employers whose values match their own. Policies focused on inclusion & diversity in the supply chain will increase in prevalence and demand for systems and people to support these will continue to rise. Counteroffers: Organisations are becoming more aware of the challenges (and cost) of losing their talent in a candidate short market. In the latter half of 2022 we saw the counteroffer becoming the norm rather than the exception. Many candidates are receiving strong counteroffers, sufficient for them to stay put, rather than moving to the new role offered. As the labour market tightens this may become less prevalent, however we anticipate competition for talent to remain strong and a counteroffer to remain the norm rather than the exception.
Overall demand for procurement and supply chain talent remains high for Permanent staff and we do not see this changing any time soon. The need for exceptional procurement and vendor management people is as high as has ever been, and the challenge for employers of finding and securing them remains significant. Changes brought about by the Covid-19 Pandemic, Brexit, Environment & Sustainability, Corporate Social Governance, War in Europe, Inflation and the likelihood of UK and Global Recession; do nothing but fortify the importance of effective procurement and vendor management teams and we see procurement, vendor management and supply chain recruitment sector being more resilient to UK and world economic challenges than other sectors. The majority of Procurement & Vendor Management Professionals see current economic uncertainty less of a hindrance and more an opportunity, where the majority wish to develop their skill sets and talents in an environment where procurement and vendor management contribution are truly recognised and rewarded. Where organisations do not support these ambitions, most professionals in the sector are not afraid to see ‘what else is out there’ and will look to new opportunities that meet with their financial, ethical and life goals. With ‘talent hard to find,’ an industry changing fast, and a mobile/risk averse professional workforce; there is little doubt that the procurement and vendor management recruitment market will remain buoyant in the immediate and longer term. The contribution of agile supply chains and effective procurement functions have never been as visible and critical as they are now and the opportunities and demand for talented procurement and vendor management professionals to help resolve these new global challenges are immense. If you would like more information about Interim or Permanent Recruitment Solutions for Procurement, Supply Chain and Vendor Management disciplines, please call: T: +44 (0)1403 248 448 E: info@beselect.co.uk
The Beaumont Select Recruitment Team Beaumont Select Market Bulletin, January 2023 |
