T he demands of the purchasing profession connue to grow, but compensaon levels remain stable as electronic components buy- ers ancipate a modest 2% pay raise this year. Staying up-to-date on the latest government regulaons, sourcing a wider variety of products to meet Internet of Things demands, and keeping up with outsourcing trends in an increasingly global economy are some of the issues keeping buyers on their toes. “We are being asked to handle a broader range of issues and teach younger employees how to manage major issues on their own,” said one of the more than 700 respondents to Global Purchasing’s annual Salary & Profile Survey, conducted over the summer. “The purchase of electronic parts is an ever-changing world,” added another respondent. “And we are all asked to do more with the exisng resources we have in-house today.” Despite such challenges, electronic components buy- ers remain largely sasfied with their average annual salary of $83,000, which is higher than the average of $79,000 reported in last year’s survey. Many also report receiving higher bonus pay these days—an average $4,500 yearly bonus compared to the $4,000 bonus reported in last year’s survey. “Bonuses are fairly consistent, but raises are geng smaller and smaller due to corporate pressure to get rid of them,” one buyer said, while another added that bonus plans are improving at his company, with a “stronger linkage between performance and com- pensaon, [along with] educaonal/skill development opportunies.” For the first me, we asked buyers to weigh in on the importance of government regulaons to their jobs, and the majority said it’s vital for them to keep up with certain issues—especially surrounding coun- terfeit electronic components, conflict minerals, and environmental concerns. We also took a closer look at professional differences between men and women responding to this year’s survey. Women represent almost a third of respondents, which is in line with what we have seen in past years, but connue to earn less than their male counterparts—an average $67,000 per year compared to an average $90,000 for men. A variety of factors play in to the disparity, of course, but we decided this year to compare some of the survey’s other data as well to get a glimpse of the “typical” male versus female buyer. BUYERS EARN THEIR KEEP Electronic components buyers count government regulaons, the IoT, and outsourcing as ongoing professional challenges, and they predict a modest pay increase of 2% this year. By Victoria Fraza Kickham Subscribe to GLOBAL PURCHASING | 1 | GO TO GLOBALPURCHASING.COM / SUBSCRIBE
Transcript
T he demands of the purchasing profession continue to grow, but compensation levels remain stable as electronic components buy-ers anticipate a modest 2% pay raise this year. Staying up-to-date on the latest government
regulations, sourcing a wider variety of products to meet Internet of Things demands, and keeping up with outsourcing trends in an increasingly global economy are some of the issues keeping buyers on their toes.
“We are being asked to handle a broader range of issues and teach younger employees how to manage major issues on their own,” said one of the more than 700 respondents to Global Purchasing’s annual Salary & Profile Survey, conducted over the summer.
“The purchase of electronic parts is an ever-changing world,” added another respondent. “And we are all asked to do more with the existing resources we have in-house today.”
Despite such challenges, electronic components buy-ers remain largely satisfied with their average annual salary of $83,000, which is higher than the average of $79,000 reported in last year’s survey. Many also report receiving higher bonus pay these days—an
average $4,500 yearly bonus compared to the $4,000 bonus reported in last year’s survey. “Bonuses are fairly consistent, but raises are getting smaller and smaller due to corporate pressure to get rid of them,” one buyer said, while another added that bonus plans are improving at his company, with a “stronger linkage between performance and com-pensation, [along with] educational/skill development opportunities.”
For the first time, we asked buyers to weigh in on the importance of government regulations to their jobs, and the majority said it’s vital for them to keep up with certain issues—especially surrounding coun-terfeit electronic components, conflict minerals, and environmental concerns. We also took a closer look at professional differences between men and women responding to this year’s survey. Women represent almost a third of respondents, which is in line with what we have seen in past years, but continue to earn less than their male counterparts—an average $67,000 per year compared to an average $90,000 for men. A variety of factors play in to the disparity, of course, but we decided this year to compare some of the survey’s other data as well to get a glimpse of the “typical” male versus female buyer.
BUYERS EARN THEIR KEEPElectronic components buyers count government regulations, the IoT, and outsourcing as ongoing professional challenges, and they predict a modest pay increase of 2% this year.
By Victoria Fraza Kickham
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DO YOU FEEL ADEQUATELY COMPENSATED FOR THE WORK YOU DO?
AVERAGE SALARY BY GENDER
Men: $90,000
$67,000 Women:
Source: Penton
AVERAGE SALARY BY EXPERIENCE
Less than 15 years on the job: $68,000
$90,000
$93,000
15-24 years on the job:
More than 25 years on the job:
Source: Penton
AVERAGE SALARY BY EDUCATION
Bachelor’s Degree or Higher: $95,000
$70,000 Associate’s Degree or Less:
Source: Penton
THE TYPICAL PURCHASING PRO
Average Years’ Experience on the Job: 20
14
52
Male (68%)
$83,000
$4,500
2%
Average Number of Years at Present Company:
Average Age:
Gender:
51% have a bachelor’s degree or higher
Average Compensation:
Average yearly bonus:
Expected pay increase this year:
Source: Penton
Global Purchasing’s 2016 Salary & Profile Survey asked buyers about a wide range of compensation, workplace, and general economic trends.
The 2016 survey results paint a picture of the typical purchasing professional: He (68% of respondents are men) is 52 years old , has been in the industry for 20 years, and working at his present company for 14 years. He earns an annual salary of $83,000 with a yearly bonus of $4,500, has a bachelor’s degree or higher, and expects a 2% raise this year. As in past years, the 2016 results show that the higher the education, the higher the wages. Looking at earnings by education level, those with a bachelor’s degree or higher earn an average $90,000 per year and those with an associate’s degree or less earn an average $70,000 per year. Experience plays a role as well: those with more than 25 years on the job report earning an average salary of $93,000 while those with 15 to 24 years on the job report earning $90,000 a year, and those with less than 15 years’ experience say they earn $68,000 a year. The gender gap persists as well; men responding to this year’s survey say they earn an average $90,000 a year while women earn an average $67,000 per year (more on the gender gap below).
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WOULD YOU RECOMMEND PURCHASING AS A CAREER OPTION FOR YOUNG PEOPLE ENTERING THE WORKFORCE?
THE GENDER GAP: KEY DIFFERENCES BETWEEN MEN AND WOMEN RESPONDING TO OUR SURVEY.
Average Salary:
MEN
$90,000
$5,000
2%
21
Average Bonus:
Yes:
Would you recommend purchasing as a career?
79% No: 21%
Yes:
Do you feel you are adequately compensated for your work?
65% No: 35%
Anticipated Pay Increase in 2016:
Number of Years in Purchasing:
52Average Age:
Average Salary:
WOMEN
$67,000
$3,400
2%
19
Average Bonus:
Yes:
Would you recommend purchasing as a career?
91% No: 9%
Yes:
Do you feel you are adequately compensated for your work?
52% No: 48%
Anticipated Pay Increase in 2016:
Number of Years in Purchasing:
51Average Age:
Source: Penton
As in past years, buyers say they are satisfied with their compensation package: 61% of survey respon-dents say they are adequately compensated for the work they do. The 39% that disagree say it would take a pretty hefty increase for them to feel adequately compensated: they say they’d need an average 16% increase. No matter how they feel about their pay, the majority of buyers (84%) say they would recommend a career in purchasing to young people entering the workforce.
“I find [purchasing] very challenging and rewarding,” said one survey respondent. “It allows interacting with various people and requires using all available knowledge and experience of yourself and others to make the right decisions.”
Another buyer added: “It is a rewarding experience being involved in new ideas and watching them move from idea to prototype to marketable product to mainstream distribution.”
We have pointed to the pay gap between men and women in past surveys, and this year decided to com-pare some other factors as well—to get an idea of the typical male versus female electronic components buyer. The $23,000 salary gap between the two is the biggest difference, although women also report re-ceiving smaller annual bonuses than men do: $3,400 compared to $5,000. In addition, more women than men would recommend a career in purchasing (91% of women compared to 79% of men), but they are less likely to feel adequately compensated for their work: 52% of women say they are adequately paid for the work they do compared to 65% of men.
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Due to multiple responses, numbers total more than 100%.
IS YOUR COMPANY FUNDING PART OF YOUR RETIREMENT?
Yes: 72%
27%No:
Source: Penton
WHERE IS THIS WORK BEING OUTSOURCED?
Other locations in the United States 78%
34%
17%
14%
10%
8%
13%
4%
China
Mexico
India
Europe
Canada
Pacific Rim
South America
Due to multiple responses, numbers total more than 100%.Source: Penton
WHAT TYPES OF WORK IS YOUR COMPANY OUTSOURCING?
Manufacturing services 75%
21%
17%
14%
9%
14%
10%
Design services
Information Technology
Quality Control
Supply Chain services
Procurement/materials management
Other
Due to multiple responses, numbers total more than 100%.Source: Penton
The majority of buyers surveyed said their company is funding part of their retirement (72%), primarily through the availability of 401(k) plans. Profit sharing, pension plans, and company stock ownership plans are also available at some companies, though to a lesser extent according to our survey.
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DOES YOUR COMPANY PLAN TO HIRE BILINGUAL PURCHASING/ PROCUREMENT PROFESSIONALS DUE TO OUTSOURCING TRENDS?
18%
82%
Source: Penton
Yes
No
HAS YOUR COMPANY HIRED BI-LINGUAL PURCHASING/ PROCUREMENT PROFESSIONALS IN THE LAST 10 YEARS DUE TO OUTSOURCING TRENDS?
25%75%
Source: Penton
Not at all concerned
Not very concerned
Somewhat concerned
Very concerned
HOW CONCERNED ARE YOU ABOUT LOSING YOUR JOB DUE TO OUTSOURCING TRENDS?
50%33%
12%
5%
Outsourcing continues to be a factor in the electron-ics supply chain, as 65% of buyers say their companies outsource work—primarily manufacturing services (75%), although some report that their companies outsource design work as well (21%). Just 9% of respondents say their companies outsource procure-ment/materials management. Most of the work is be-ing outsourced elsewhere in the United States (78%) and China (34%).
Although some respondents to this year’s survey said their companies are outsourcing the purchasing function (9%), most remain unconcerned about the effect this trend will have on their jobs. When asked whether they are concerned about losing their job due to outsourcing, 83% said no. Twelve percent of respondents said they are “somewhat concerned” and just 5% said they are “very concerned.” What’s more, when asked whether or not their companies have eliminated jobs in the purchasing department due to outsourcing, 82% said no, 8% said yes, and 10% said they were not sure.
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DO YOU THINK THE TREND TOWARD IOT AND GREATER CONNECTIVITY IN GENERAL WILL HELP STREAMLINE THE PURCHASING FUNCTION?
37%63%
HOW IS THE INTERNET OF THINGS AFFECTING THE PURCHASING DEPARTMENT?
Increasing demand to source new or different electronic components:
36%
39%
20%
33%
Increasing demand for product knowledge on new or wider variety of components:
Increasing time-to-market demands:
Driving the need to find new sources of electronic components and services:
Source: Penton
BUYERS SAY THEY FACE A NUMBER OF CHALLENGES IN TRYING TO STAY CURRENT ON WORK-RELATED ISSUES AND INFORMATION. SOME OF THE GREATEST CHALLENGES ARE:
Sifting through the many sources of information relevant to the job 49%
56%
37%
32%
Work-Life Balance
Keeping up with technology changes
Keeping up with standards and regulations
Source: Penton
Buyers agree that the Internet of Things is having an effect on the purchasing department when it comes to sourcing components. Demand for greater prod-uct knowledge (39%) and the need to source a wider variety of components (36%) are the top two areas, followed by the need to find new sources of products (33%) and meeting shorter time-to-market demands (20%). Buyers also report that IoT trends are likely to help streamline the procurement function, due to greater connectivity across the supply chain.
But when it comes to product development, many buyers say the connectivity behind the IoT is nothing new in the electronics supply chain.
“IoT is a buzzword and hype for what was already going on anyway—connectivity of devices—which already had I/O built in,” said one buyer responding to our survey. “[Today], it’s more software and cyberse-curity issues and efforts.”
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Finding the right work-life balance remains the great-est challenge for electronic components buyers, as 56% of respondents rated that issue as the top challenge they face in trying to stay current at work. Navigating the maze of job-related resources and in-formation came in second (49%), followed by keeping up with technology changes (37%), and keeping up with standards and regulations (32%).
WHICH MOBILE DEVICES DO YOU USE IN YOUR DAILY JOB?
iPhone 38%
30%
12%
16.7%
33%
Android-based smartphone
iPad
Other Devices
None
Due to multiple responses, numbers total more than 100%.Source: Penton
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The iPhone remains the most popular mobile device procurement professionals use in their daily jobs (38%), followed closely by the Android-based smartphone (30%). Interestingly, 30% of buyers say they do not use a mobile device for work. LinkedIn remains the most popular social media plat-form among buyers by far, as 60% say they use it to stay up-to-date; Facebook plays a distant second to LinkedIn, as 26% of buyers cite using it for work.
Of those who use mobile devices on the job, usage is growing. Fifty-five percent of respondents say they have increased their use of mobile devices for work in the last 12 months while 44% say their usage has remained the same and 1% say it has de-creased. Social media is having less of an effect: 32% of respondents say they have in-creased their use in the last 12 months while 65% say their use has remained the same and 3% say it has decreased.
WHAT IS YOUR GENERAL OUTLOOK ON THE ECONOMY FOR THE COMING YEAR?
41%
30%
20%
6%3%
Somewhat negative
IF YES, WHICH ISSUES ARE MOST IMPORTANT TO YOU?
Counterfeit electronic components regulations and standards
48%
47%
45%
25%
Conflict minerals legislation and standards
Environmental issues
Other
Due to multiple responses, numbers total more than 100%.Source: Penton
Source: Penton
Yes
No
42% 58%
ARE GOVERNMENT REGULATIONS/ LEGISLATIVE ISSUES A CONCERN TO YOU PROFESSIONALLY?
The economy remains a prime concern throughout the electronics supply chain, but purchasing profes-sionals remain fairly optimistic about the economic outlook this year. Forty-seven percent of survey respondents said they have a positive outlook on the economy, with 23% reporting a negative outlook; 30% reported a neutral outlook. A diverse economy may well be the key to many buyers’ optimistic out-look.
“I think the underlying fundamentals are stronger than what is being publicized,” one buyer said. “Sure the energy sector is down, but all areas can’t click all the time. We have a diversified economy.”
Still others point to the seemingly limitless potential of the electronics market in general. As another buyer said, “There is plenty of opportunity for business in this industry, so the potential for income is as limitless as you allow it to be.”
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New this year, we asked buyers how important government regulations are when it comes to doing their jobs; 58% listed them as a concern, with issues surrounding counterfeit components ranking at the top (48%), followed by conflict minerals (47%), and environmental issues (45%). These issues are prime concerns at all levels of the supply chain, as there was no difference in response between the executive and purchasing manager levels: 54% of each group listed government regulations as a professional concern.
