Higher pay makes procurement staffs more valuable

A company's approach to hiring procurement professionals can determine the ultimate value that function brings to the organization, according to research conducted by The Hackett Group, Atlanta.

"World-class procurement leaders establish their organizations as strategic functions that are fully integrated with other parts of the business," says Chris Sawchuk, Hackett's procurement practice leader. "They take a wider view, understanding the implications of procurement policy for suppliers, internal and external customers, and shareholders. Their staffs lead cross-functional teams to establish which goods and services are most beneficial to the company, taking a broad array of factors into account—not just purchase price."

Making this approach work, Sawchuk adds, typically requires paying higher-than-average salaries to attract and retain employees with the skills to operate a procurement department as a strategic business entity.

Ironically, Sawchuk notes, paying higher salaries for procurement professionals often results in lower overall spending on the procurement function, because companies employing the most highly qualified professional usually find themselves running more efficiently with less overall staff.