It pays to be at the top
People at senior levels are paid more. That’s no surprise. But IACCM’s most recent salary survey suggests that those at the top are beginning to increase the differential, with average pay for a functional leader jumping by almost 20% in the last year, while those in more junior roles have seen increases of only 2 – 3%.
It is also interesting that geographic differentials appear to reduce at more senior levels, perhaps reflecting a more global market for talent even in a field like contract and commercial management. While analysis is not yet complete for all geographies, a comparison between the UK and North America shows that professionals in the UK lag about 12% behind their North American colleagues. However, at Director level, this reduces to only 1%.
The bonus culture also shows some geographic divide, with 44% of those in the US reporting annual payments of 11% or more, against only 30% receiving this level of award in the UK. Both regions show a decline in those who are dissatisfied with their salary – in North America there has been a drop from 40% to 23%, in the UK the decline has been less, from 40% to 31%.
Having a global perspective continues to pay dividends in the US, with salaries for those with worldwide responsibility some 25% higher than those with purely local focus. This contrasts with the UK, where a more international outlook results in just 6% more pay.
For those contract and commercial professionals who wish to maximize their salaries, what should you be doing? Apart from getting yourself promoted, it seems it remains best to be in Sales contracting (rather than Procurement); it is best to be in a large company ($5bn or more annual revenue); it is best to be in a combined pre- and post-award role (if you specialize, pre-award continues to pay about 9 – 12% more than post-award); it is worth having an MBA; and you should aim to be in the outsourcing / services / consulting sector (though in North America, oil and gas is a good alternative and in the UK you might try IT / Telecoms).
The salary report summaries for North America and the UK are now available on the IACCM web site.