Less than average

While the highest paid purchasing professional in PURCHASING Magazine's 24th annual salary survey—with earnings of $270,000—counts metals sourcing as one of his responsibilities, buyers of metals as a group, still earn far less than their peers who acquire other commodities.

Buying

professionals who indicate on their survey response-cards that they purchase metals, earn an average of $64,800 annually, $5,300 less than average salaries of all purchasers. Buyers of transportation ($88,900), services ($85,300) and information technology ($81,400) all make more than metals buyers. Purchasers of multiple commodities ($58,400) and office equipment and supplies ($52,500) make less.

As in the past, more metals buyers than purchasers of other commodities responded to the salary survey: Twenty-five percent of respondents say they source metals, 17% buy components, 12% purchase chemicals and 11% acquire electronics. For 2003 and 2002, 24% and 25% of respondents were metals buyers.

A year ago, average annual salary for metals buyers was $61,000, about $6,300 less than the earnings of their counterparts who purchase all other goods and services.

Median salary for purchasing professionals who indicated that they buy metals is $60,000. Median salary for all respondents is $63,000. A year ago, median salary for metals buyers was $57,000. For all buyers, it was $60,000.

Looking at salaries of purchasing professionals who source metals by title, buyers receive an average annual salary of $43,700; purchasing managers earn $62,700; and VPs, $128,000.

Fifty-one percent of respondents who buy metals receive bonuses as part of their annual compensation. For all respondents, this figure is 55%, the highest it has been in the history of the salary survey. Individually, buyers of electronics and office equipment and supplies are less likely to receive bonuses than metals buyers.

Still, metals buyers who receive bonuses report seeing more money in their paychecks than their peers who purchase other commodities (11% vs. 10.1% of base pay). Metals buyers receive bonuses for meeting company financial goals (86%), department cost targets (23%) and cost targets for purchased parts (11%).

Sixteen percent of metals buyers receive stock options that are typically worth nearly $62,000.

Metals is the commodity best represented in Purchasing's $100,000 Club: Twenty percent of metals buyers earn more than $100,000 annually. Next come chemicals buyers at 18% and purchasers of components at 14%.

On average, male survey respondents who buy metals earn $70,100. Female metals buyers make $51,700. Last year, male metals buyers received paychecks of $66,700, while women were compensated $48,800. For 2004, the highest paid metals buyer earns $270,000; the highest paid female metals buyer makes $144,000. Seventy percent of metals buyers who responded are men.

Results of PURCHASING's annual salary survey show professional responsibilities serve as a benchmark for compensation: As dollar volume and supervisory duties increase, so does income. Sixty-six percent of respondents have responsibility for purchasing tabs greater than $25 million. Forty-three percent have supervisory experience (subordinates).

As company size (based on annual sales) increases, so do salaries. Purchasing pros employed by companies with more than $125 million in annual sales report better than average compensation. Average salary for those working at the divisional level is higher than for those at the corporate level. Plant locations offer the lowest average salary.

Most metals buyers work for smallish companies: Sixty-one percent of metals buyers are employed by companies with less than $125 million in annual sales. Fifty percent work at corporate headquarters, 18% are employed at the divisional level and 31% fulfill their purchasing responsibilities at the plant site.

At the same time, average salaries rise in step with length of employment; college grads generally receive the highest average annual compensation. Certified Purchasing Managers (C.P.M.) have higher average salaries. The age threshold for better-than-average compensation coincides with average age of buyers in the profession.

On average, metals buyers are 45.6 years old and have 15.9 years of experience. Only buyers of machinery (17 years) and electronics (16.1 years) have more experience. Sixty-seven percent of metals buyers have college degrees; 15%, graduate degrees. Twenty-four percent are Certified Purchasing Managers (C.P.M.); 6% have Certification in Production and Inventory Management (CPIM) from APICS, the educational society for resource management.

Industry buyers

Purchasing professionals in the primary metals and metals fabricating industries also earn less than their peers working in other businesses. Average annual salary for these buyers is $58,800. They are among the lowest paid in the purchasing profession. Buyers who work for wholesalers and service centers earn $64,300; purchasers in the equipment/machinery industries make $69,400. On the other end of the pay scale, purchasing professionals employed by the communications equipment industry receive $85,800 in annual compensation.

Purchasing professionals in the primary metals and metals fabricating industries earned an average $60,200.

Eight percent of respondents indicate on their survey form that they work for companies in the primary metals/metal fabricating industry. Twenty-six percent work in miscellaneous manufacturing, 12% in the process industries and 11% in transportation/automotive.

Median salary of purchasers in the metals industry is $55,000. Median salary for all respondents is $63,000.

Just 8% of the respondents who work in the metals industry earn more than $100,000, fewest of all industries represented. Industries with the most respondents in the $100,000 Club include those employed by the communications equipment and computers and related equipment industries.

Fifty percent of respondents in the metals industry receive a bonus, compared to 55% overall.

But for metals buyers, the average bonus amounts to 11.8% of base pay. Only buyers in the communications equipment and financial, services industries receive bigger bonuses. Metals buyers receive bonuses for meeting company financial goals (78%), cost targets for purchased parts (11%) and department cost targets (11%).

Twelve percent of buyers in the metals industry receive stock options. A year ago, this figure was 5%. Twenty-one percent of all respondents to the survey receive stock options.

Men employed in the metals industry earn average annual salaries of $63,000 while women receive $45,500 in yearly compensation. For all survey respondents, these figures are $77,000 and $57,400, respectively.

Looking at salaries of respondents employed in the metals industry by title finds compensation for buyers is $43,800; for purchasing managers, it's $62,500 and for purchasing directors, it's $80,100. A VP of purchasing makes $108,000.

Fifty-five percent of buyers in the metals industry have responsibility for purchasing tabs of more than $25 million; 45% have supervisory experience.

Seventy-two percent of purchasing pros in the metals industry are male. Average age of all purchasers in the industry is 45.9 years; these buyers have 15.8 years of experience.

Fifty-two percent of buyers in the metals industry have a college education; 9% hold a graduate degree. Twenty percent are CPMs; 2% are CPIMs.

Thirty-two percent work at companies with more than $125 million in sales; 49% work at corporate.

Commodity	< $15 million	$15-$50 million	$51-$125 million	$126-$500 million	$501 million-$1.5 billion	$1.6-$3 billion	> $3 billion
Metals	53.1	55.2	66.1	71.7	75.5	81.5	85.5
Chemicals	45.0	65.1	83.4	81.1	82.5	83.2	97.0
Electronics	48.5	62.4	74.7	84.7	91.8	78.9	88.2
Packaging	43.1*	49.9*	66.7*	67.8	80.8	83.8*	68.6
Components	48.4	51.8	59.5	87.5	81.0	81.2	82.6
Machinery	51*	65.2*	61.2*	69.0*	78.0	100.2*	85.5
MRO	55.1*	53.1	58.4	72.5	81.9	71.6*	88.8
Office equipment	42.2*	47.7*	50.5*	33.0*	50.0*	55.7*	73.8*
Transportation/freight	#	83.0*	#	#	123.0*	54.8*	108.8*
Information technology	51.8*	57.5*	75.0*	91.0*	81.6*	99.0*	89.5
Multiple commodities	54.4*	50.5*	48.8*	#	57.8*	60.0*	73.5*