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Procurement Staff to See Salary Increases, but Still Feel Undervalued, Reveals Hays Research

Most procurement can expect to see salary increases in their next review, research from recruiters Hays has revealed. 

A total of 97% of employers surveyed said procurement staff would get a bump on wages with 55% expected to award increases of 3% or more Hays Salary Guide FY 23/24 found. 

But despite this, procurement staff still feel undervalued, says Hays and 36% of employees intend to remain with their employer beyond FY24. 

More than half of the employers interviewed say the skills shortage has forced them to offer higher salaries. 

About 14,000 employers and professionals were interviewed for the research. 

A total of 42% of employers were expected to hand out raises of between 3-6%, while 14% of those surveyed will hand out raises between 7% to 10% and above. 

The intensity of the skills shortage during “The year of the raise” is the catalyst behind the upward trend Tim James, Managing Director of Hays.   

“We’re calling this the year of the raise, where the promise of higher salaries reflects the intensity of the skills shortage in today’s jobs market,” says Tim James, Managing Director of Hays. 

“This year, both the number and value of increases will rise, continuing the upwards trajectory we first noted in last year’s Hays Salary Guide. 

“Despite the increased salary boost, employer and employee expectations in procurement still fail to align. Many procurement professionals feel undervalued and underpaid. They feel their current salary doesn’t reflect their individual performance.” 

Just over half of the procurement employees (51%) say they deserve a boost to their pay packet of more than 7%. More than a quarter of employees feel deserving of a salary boost of more than 10%.    

What’s driving salaries up? 

Hays say there are four key factors motivating employers to increase salaries in their next review.

1. Competition amid a growing skills gap crisis: 52% of employers have offered higher salaries than planned to attract procurement professionals in response to the skills shortage. 

“Many employers find that the pipeline of skilled procurement professionals doesn’t meet their needs,” says Tim. “As candidate supply continues to tighten, employers face increased pressure to proactively attract and retain talented employees.” 

2. The ripple effect of falling real wages: 83% of employers and employees combined say it’s reasonable to expect pay rises to keep up with inflation.  

“Employers are sensitive to the hidden cost of falling real wages on employee engagement, mental health and wellbeing, morale and job satisfaction,” Tim continued. “While few employers can match inflationary pressures, they are stretching their salary increase budget as far as they can to support their staff.”   

3. The impact of pay transparency: Many employers are transparent with employees about how salary levels and increases are set to improve fairness and build trust – 24% are transparent with all employees and 35% with select employees. 

“We expect these figures to rise in the months ahead, with the abolition of pay secrecy in Australia prompting more employers to audit salaries, scrutinise disparities and make adjustments when required to ensure fair and equal pay,” says Tim.  

4. ‘The great ask’: This year, 66% of procurement professionals plan to ask for a pay rise, up from 58% last year and 45% the year before. 

“Employees still feel they have bargaining power and are more confident to negotiate for better pay,” he said.  

Advice for employers  

Tim says the overall trend suggests many employers are expected to invest in their workforce, such as through salary increases, increased headcount and upskilling. 

“To stand out in the race for talent, also review the benefits you offer. Consider what else you can offer to attract and retain talent, such as opportunities for growth, wellbeing days, additional annual leave, improved recognition, work-life balance or a more positive work environment,” he said. 

Advice for professionals  

Procurement professionals hold the power cards according to Hays, but Tim suggested not to be too pushy at the negotiating stage. 

“With skills in demand you still have bargaining power, but it’s important to temper it to avoid pricing yourself out of consideration,” notes Tim. “Yes, employers are investing in salary increases, but margins remain tight. The commercial reality dictates that salary increases can only stretch so far.”

Procurement professionals should consider the whole package when negotiating a new job or your next pay rise.

“Benefits can go a long way to bridging a possible financial expectation gap, so think about what you’d really value and what could make a difference to your life and career long-term,” added Tim. 

The top three benefits employers are offering include training, wellbeing leave and mental and physical health and wellbeing programs. 

Other key findings from the research included:

  • Employers intend to increase their permanent (43%) and temporary or contract (16%) procurement headcount in the next 12 months.
  • Just 36% of procurement professionals unquestionably intend to remain with their current employer beyond FY23/24, with another 50% unsure whether they will remain.   
  • Of those intending to or considering changing jobs, a lack of promotional opportunities is the top reason, followed by an uncompetitive salary and the rising cost of living.
  • Procurement professionals will prioritise a pay rise, being able to work flexibly and promotion in the next 12 months.  

Download your copy of the Hays Salary Guide at hays.com.au/salary-guide. 

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