A salary survey was conducted by Tech-Pro Personnel at the IPSA Conference held in May this year. The survey related specifically to the Procurement field and questioned reporting structures and budgets etc. It attracted a total of 103 respondents. The majority were from the Public Sector Enterprises such as Eskom and Transnet (39%), and the Government (24%). Heavy Resources (5%), FMCG (3%), IT & Media (3%), Automotive (2%) and the Financial Sector (1%) were also represented.
“These results, although useful, are not as representative of the Procurement sector within South Africa as a whole as we would have liked, and one should be cautious against drawing conclusions from the results due to the relative small sample size,” Priscilla Gibson, Managing Director of Tech-Pro Personnel
told Smart Procurement.
Procurement as a Profession
What can be certain from the survey is that procurement is becoming a profession. More than 96% of respondents held some form of qualification, with the majority (25%) holding a BTech or BComm. 7% held CPIM or CIPS qualifications.
“What was interesting was that a 10% held MBAs – this is indicative of the fact that procurement is now playing a more strategic role within organizations,” commented Gibson.
The average procurement practitioner that completed the survey holds a degree, has approximately 12 years of experience, is male, lives in Gauteng and earns approximately R410K per annum.
His typical benefits include Medical Aid, Retirement, Cellphone, Housing Allowance, Travel Allowance and he receives a performance related bonus.
He typically holds the role of Manager and has between 5 – 10 people reporting to him.
His annual target is a costs saving in the region of 10 – 20% of his total spend.
Males dominate salaries
According to the survey, males still dominate the procurement scene! Only 38% of the respondents were female, with an average salary of R256K per annum. Male respondents on average earned R410K.
“However, before one jumps to conclusion about salary discrepancies, it must be mentioned that when we compared similar positions and responsibilities, we found very little difference in compensation between the genders. The difference in the average salary is due to the fact that there were more female candidates operating at more junior levels than the male counterparts who took part in the survey”.
In terms of region, Gauteng is still the salary capital, with an average annual salary of R337K. There was not much difference between KZN and The Western Cape with an average of R284K and R280K respectively. The Free State rallied in at R244K. There were not enough respondents to gain an average for the rest of the Provinces, except North West, which averaged R396K per annum. “The North West province is unusual in that the majority of procurement related positions are within the mining industry which traditionally pays a premium for procurement staff. We hence have kept this province aside when analyzing packages by provinces,” says Gibson.
Which industries pay the best?
So speaking of industries, which is the highest paying one? Leading the pack is Heavy Resources, including mining and petrochemical (R480K), followed by; Automotive (R468K), Public Enterprises (R358K), Media & IT (R306K) and FMCG (280K).
Government is still the lowest paying industry with an average of R236K. ‘Once again, due to the limited number of respondents from some of the sectors, these statistics can in no way be accurate,” Priscilla warns. “However, based on our experience, we believe that the figures are fairly representative of reality.”
What is very obvious is that the industries and companies where procurement plays a strategic role are paying more for their human capital. Over 56% of respondents report to a Procurement specific role, while 15% report to Supply Chain Managers/Directors. Only 10% report to the Financial discipline. In those companies where practitioners report into a CPO or the like, the average salary was 18% higher than in companies where the procurement function reported into another discipline.
“Overall we found that on the whole people were interested to benchmark themselves, but reluctant to participate,” she said.
“Some people filled in all the areas within the survey, but did not include their salary details. We have not included these results in the 103 that were used to compile this analysis.”
Priscilla also notes that the results are an indication of current salaries, and are not indicative of what the market would pay if moving to a new job. “With the current skills shortage, it is very difficult to predict what the market rate for an individual would be as companies are paying premiums for one skill today, and underpaying for another skill tomorrow!”
Average Annual Increase
“Although the number of respondents to the survey was relatively small, the findings are congruent with the outcomes of previous surveys conducted by Tech-Pro Personnel over the last two years. The conclusions remain that procurement is adding significant value to a company’s overall strategy, and that experience is no longer enough. Qualification is playing a significant role in remuneration. Procurement salaries are finally beginning to realign themselves with other strategic roles as overall procurement salaries have increased by approximately 7% since the last survey conducted by Tech-Pro Personnel in June 2006.”
In order to constantly keep ahead of salary trends in what is becoming a growing discipline, Tech-Pro Personnel will be launching an on-line survey in conjunction with SmartProcurement in the near future. “This will allow us to attract a lot more respondents to our surveys and will hopefully provide us with a much more accurate view of the current market conditions,” commented Priscilla.
Priscilla may be contacted on Tel: (011) 514 0463 or Cell: 082 808 7754. Alternatively, you may e-mail her at email@example.com.