Yesterday, my friend Tim Minahan posted an entry on Supply Excellence about the US Bureau of Labor Statistics’ job outlook for purchasing professionals. He rallied other bloggers in the space to incite a letter-writing campaign targeted at the BLS and at least two other bloggers (Jason @ Spend Matters and Michael @ Sourcing Innovation) obliged.
I really admire the work of these three gentlemen (heck, I read their blogs every day), but I’m not so sure that this report is as damaging to the profession as they may believe. Let me share my analysis…
The conclusion of the outlook that seems to get everyone’s panties in a bunch is that “Overall employment of purchasing managers, buyers, and purchasing agents is expected to grow slower than the average for all occupations through the year 2014.”
I’m afraid that my fellow bloggers have interpreted “grow slower than the average” to mean decline. It doesn’t mean that at all. What it means is that the BLS sees average job growth among all professions in the US to be 9 – 17% between 2004 and 2014 and that the number of jobs in the purchasing profession to grow at a rate of 0 – 8%.
So, literally, everyone could be getting upset that the BLS is forecasting purchasing job growth to be at 8% instead of 9%. Not so much of a big deal when you think of it that way, right?
In some seemingly conflicting points between the BLS report and Tim’s post, they are both right. For example, the BLS report says that “Demand for purchasing workers will be limited by improving software, which has eliminated much of the paperwork involved in ordering and procuring supplies, and also by the growing number of purchases being made electronically through the internet” and Tim cites real-world examples of execs frustrated at not being able to find enough talent for today’s more advanced purchasing and supply management demands.
Though they sound like two opposite opinions, they are both right.
Well, now more than ever, we are seeing a clear distinction between tactical purchasing jobs and strategic purchasing jobs. Let’s define these…
Tactical purchasing jobs involve lots of administrative work such as checking price and availability, placing purchase orders, resolving invoice and receiving discrepancies, and expediting. Strategic purchasing jobs involve more managerial-level work such as negotiating enterprise-wide contracts, analyzing spend, implementing technology, managing supplier relationships, identifying cost savings and continuous improvement opportunities, and more.
Tactical purchasing work is being replaced by eProcurement and related technologies. In fact, I recently had a conversation with a Chief Supply Chain Officer of a local organization who expects the next phase of their technology rollout to free up 10 FTE’s in the next year. Add to that the growth of procurement outsourcing, both domestic and abroad, and you have a recipe for a shrinking number of tactical purchasing jobs.
Strategic purchasing work is increasing. Senior executives are seeing the value and the return on investment in these types of activities. So strategic purchasing jobs are being created faster than they can be filled. The sharp purchasing professionals that I know are finding it very easy to get great jobs with high salaries and people are moving from job to job (and increasing their salaries) at will, practically!
So, if the BLS’ estimate is right (and 8% growth over 10 years sounds reasonable to me given the likelihood that we’ll have some economic ups-and-downs over that period), I think that is actually a great sign that the profession is growing nicely despite the natural headcount reduction that supply chain technology delivers. I think that it attests to the fact that executives are seeing the value in growing the number of high-level purchasing positions and not seeing purchasing as a cash-draining department to be eliminated.
Additionally, the bloggers called into question the BLS’ salary statistic that had the median purchasing salary at $72,450 in 2004. I thought that I’d just share the results from our survey last year. According to our research, the average salary for a purchasing professional in North America is $74,900. Our research is over two years fresher than the BLS’, so I don’t think that they were really off on this statistic either.
Yes, there are some aspects of the BLS report I disagree with, but I’ll just leave this post dedicated to the job growth and salary stats for now.
I feel obligated to say that I am not trying to discredit the opinions of my fellow bloggers. I respect them tremendously and encourage you to read their work. But this is one topic that I thought could use some healthy disagreement among people who care tremendously about the profession.
In a future post, I am going to discuss why I think that my fellow bloggers and I have a different perspective and I’ll also talk about why there is a talent crunch at the same time that jobs are being eliminated by technology and outsourcing.