Supply Chain Salary Breakdowns: by Gender

Recently we have been writing a series of posts surrounding the gender gap in Supply Chain as well as salary bands within Supply Chain. We have seen lots of good discussions in our specific Supply Chain network (we are after all leading recruiters in the very narrow and highly competitive vertical of Supply Chain Management) around these two topics and it seems that the natural next step for us and our audience is to combine both themes. So we propose the question:

What are women earning in Supply Chain positions in comparison to their male counterparts?
To narrow our spectrum of possible answers for now, let’s look at Procurement jobs in all levels of seniority. According to the Institute of Supply Management (ISM)’s 2013 Salary Survey, women make significantly less than men with that gap widening further as you will notice one travels up the Supply Chain career ladder.

Below, the green bar represents the total combined average salary of workers in Procurement/Supply Chain positions, while the red bar represents salaries for males and the purple bar represents salaries for females within the same discipline.

Most notable in this graph is just how wide the gap gets the higher up the position is. For example, entry-level procurement jobs only show a gender gap of roughly $3000. On the other end of the continuum, men in C-level positions in Procurement or Supply Chain, on average, make a staggering $180 000 more than women in those same positions!

As we have mentioned in prior blogs, women are still underrepresented in Supply Chain leadership positions. While there has been a lot of disagreement on this point since our post, those are indeed the facts with regard to compensation. This raises the question, “Why?” Why is there such a remarkable difference between the two genders when it comes to overall compensation?

Our previous posts have offered several different explanations to this question. The most common answer presented from our network is that Supply Chain has been historically dominated by men with women more recently entering the Supply Chain market. This is an interesting point we would like to further open up for discussion. The implication here is that longer experience is compensated by a higher salary band. Generally, we would agree with this principle. However, ISM offers us a second graph, this time displaying the salary of Procurement professionals, divided by gender and number of years in the industry. Red is still for men and purple for women.

Interestingly enough, regardless of number of years of experience, women seem to consistently make approximately 20-30% less than men in procurement positions. That’s quite a WOW!!! This isn’t only an issue in Procurement and Supply Chain. It’s pretty common knowledge that women make 20-30% less on average across the board in the wider economy. But it’s interesting that, in Procurement specifically, that gap widens even further as you look at more senior positions.

While this does not necessarily eliminate the possibility that salaries are driven by experience, it does give us pause. What else factors in here? In the previous post, we discussed issues raised by SCM Executive Patricia Moser’s article for Canada’s Supply Chain Management Association, and by a recent article in Industry Week. As a refresher, those points were:

• Supply Chain has an image problem, which means some women don’t see the potential in the field.

• Women are less likely to apply for leadership roles if they don’t see themselves having every qualification listed on a job description.

• Men are traditionally promoted based on potential, while women are promoted on results.

We have had a strong response to the first two points and so we would like to hone in on that last one. Men are traditionally promoted based on potential; while women are promoted on results. Certainly this would explain the gap in salary between the genders but the real question here is whether or not this statement yields any fruit.

The disparity in the salary gap is as stark as day, but the factors behind it are very unclear. We feel a personal connection to this topic as Argentus is a proudly female-owned company as well as a leader in the Recruiting of Supply Chain Management experts as an exclusive niche. A good proportion of our network is comprised of strong and talented women in Supply Chain leadership positions. As an equal opportunity employer and recruiter, we are all for implementing change in this particular issue. So we pose this question to our network: Why are men in procurement earning significantly more than women, and how does the “potential vs. results” argument play into this?

Many thanks to our researcher Sahana Mohanadas for this post!

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