We have been hearing a lot from our network recently about the growing demand for talent in procurement. Naturally this demand leads to a rise in salaries for people in procurement positions. Following a great article from Supply Chain 24/7, the Purchasing and Supply Management Salaries 2014 study shows an 18% increase in purchasing salaries over the last year. Up until now we have posted a few times about this upward trend.

However, recently Supply Management Website reported on a survey by the Institute of Supply Management (ISM) showing a slight decrease in US purchasing salaries. We at Argentus found this discrepancy interesting, especially as we move into the U.S. talent market. So we took a look at some salary information for Procurement Professionals at the Director level south of th boarder.

We began focusing our research geographically. We honed in on the major metropolitan areas in the Eastern / Midwest U.S.: Boston, New York City, Atlanta and Chicago. According to the data below, the average purchasing director salary is roughly from $130 000 to $150 000. These figures include bonuses.

All salary grabs are courtesy of salary.com, an IBM-owned compensation analysis company.

Here’s the salary info for New York, NY:

And here it is for Boston, MA:

Here it is for Atlanta, GA:

And finally Chicago, IL:

This covers the four biggest markets on the East Coast and Mid West in the U.S.

To get a better understanding of how these figures compare here in Canada, here’s the same data for Purchasing Director salaries in four major cities: Toronto, Vancouver, Calgary and Montreal. We posted about these before, but here they are for comparison.

Toronto:

Montreal: 

Calgary:

Vancouver: 

Above, we can see that the average salary for a director in Canada, including bonuses, ranges from $150 000 to $165 000. So why does it appear to be slightly lower in the U.S.?

For starters, we can assume that the talent pool is smaller in Canada. Major US cities are significantly more populated than Toronto, Vancouver, Calgary and Montreal. Therefore, naturally, there is likely to be a larger group of talented procurement professionals down below. Coupling that larger size of talent base with limited consumer demand might lead to less competitive salaries. The opposite can be said for Canadian cities. With a smaller group of procurement professionals, Canadian companies might be able to offer Procurement professionals a more competitive salary at the director level.

Another possibility might have to do with the fact that the U.S. economic recovery is still on shaky ground. Reports came out today that the U.S. economy actually shrank 1% in the first quarter of 2014, which is the first contraction since 2011. Canada’s economy, on the other hand, has shown slow but consistent growth so far this year. It of course takes a while for these fundamentals to filter through and affect employee compensation at the senior level. But compensation might, at this point, reflect the fact that Canada’ss economic recovery from the 2008 crisis has been more steady. In fact, many analysts were buzzing a few weeks ago about the fact that Canada’s middle class income just outpaced middle class income in the U.S.

Paul Lee, the director of research at ISM claims that, “it was a year where employers appeared to be careful in managing their expenses and many organizations may have cut back on salaries and bonuses.” This may also explain the slight fall in US procurement salaries this year.

This is of course speculation on our part, and it seems like there’s some conflicting data in what Supply Chain Publications are putting out. It’s still a great market for Senior Procurement professionals in the U.S., owing to the huge demand for Procurement professionals in general. At Argentus, we’re doing more expansion into the U.S. and having quite a bit of interest from companies looking to hire Procurement Professionals at the Director level.

We’d love to hear your thoughts and opinions on this matter! Feel free to comment on any of our posts or reach out to us via email.

Thanks to Sahana Mohanadas, our Research and Marketing intern, for this post.