Compensation for purchasing professionals continues to rise, a sure sign of top management's commitment and support for the jobs they do.

In fact, many companies are so pleased with results of strategies implemented by supply management operations that they're asking purchasing pros to take on more responsibility for sourcing services (e.g., travel, human resources, marketing, legal), information technology (IT) and logistics because of the potential there for big savings. What's more, they are compensating buyers well for their success at venturing into these new areas.

Indeed, results of Purchasing's 27 ^th annual salary survey show respondents with responsibility for sourcing services are among the highest earners in the profession, with an average annual compensation of $104,110. Purchasing pros who buy IT goods and services make $101,104. Those charged with purchasing logistics services are compensated $97,802.

The respondent with the highest compensation package this year is a purchasing director who buys MRO goods and services. His compensation : $850,000. Last year, it was a metals buyer ($600,000).

Thirty percent of survey respondents say they've taken on additional responsibility in the past three years for logistics and 17% now buy IT services. Other nontraditional areas they've ventured into include marketing (10%), HR (8%) and legal services (5%).

On average, purchasing professionals are paid $84,611, an increase of 1.6% over last year, according to results of the 2007 salary survey. While this raise is not as big as in years past, earnings for purchasing pros still continue to increase as they have for nearly every year since the magazine first conducted its poll in 1981. Then, purchasers were compensated $29,000. In 1987, salaries averaged $38,300. Ten years ago, average earnings were $57,600.

Anecdotal information from the survey shows individual cases where raises were much higher than the average—3% to 4%, for example, in such areas as financial services.

And those who move to companies in certain industries for positions that have responsibility for sourcing many kinds of indirect goods and services may see a bump that ranges from 5% to 15%. One recruiter, Tonia Deal, president of Tonia Deal Consultants in Hudson, Ohio, says demand is so strong for experienced purchasing pros that companies are paying sign-on bonuses.

What's more, a sizeable number of survey respondents (62%) continue to get bonuses as a reward by management for good performance, especially for hitting particularly aggressive company financial targets. Bonuses average 13% of annual salary. These figures are in line with results of last year's survey, when 63% got bonuses worth 14% of their salaries.

Purchasing pros at the top of the ladder—CPOs, vice presidents and directors—are more likely to receive bonuses: Seventy-nine percent of these executives get compensated this way, according to survey results. Eighty-seven percent of those earning more than $100,000 got bonuses.

Respondents receive a bonus for meeting company financial targets (63%), development cost targets (21%), cost targets for purchased parts (17%), supplier quality improvements (9%) and cycle time improvements (8%).

Thirteen percent of respondents receive both a bonus and stock options. Stock options for those who receive them average $85,538.

Bonuses are part of so-called "variable-pay" programs, which are becoming increasingly popular methods of compensation. Ken Abosch, who leads the compensation consulting business at Hewitt Associates, a global human resources services company in Lincolnshire, Ill., says that "increasing cost pressures, coupled with challenges of attracting and retaining top talent, have contributed to a fundamental shift in the way employees have been—and will continue to be—rewarded and motivated."

Companies are moving away from providing employees with substantial across-the-board merit increases and instead are focusing their efforts—and a sizeable amount of their compensation dollars—on variable pay programs, he says. "This enables companies to better manage costs, and reward employees based on meeting specific performance criteria each year."

Brent Shinall, vice president, global supply chain, at Helix Energy Solutions in Houston, is building a new team of purchasers and says that roughly 20% of their salaries is based on bonuses for meeting performance targets.

Compensation is, of course, one indication of the importance to companies of the skills different professionals bring to corporate efforts, and here purchasing as a profession fares well. Compared with their colleagues in other related fields, such as logistics and engineering, purchasing professionals still continue to earn more. Design News magazine reports its readers, who do the mechanical and electromechanical design of products in the original equipment market, got raises of about 3% last year. Yet, engineering salaries are about $5,000 lower on average than purchasers' salaries. And readers of Logistics Management magazine earn $80,000 on average, the same as they did the year before when they actually saw salaries fall. Both Design News and Logistics Management magazines are published by Reed Business Information, parent company of Purchasing.

One buyer who responded to the Purchasing survey and who works for a financial services company says that raises are averaging about 3% to 4%. The respondent adds that the company is just starting to get its purchasing operation involved in sourcing HR, marketing and legal services. And the skill most in demand for venturing into this new terrain? Relationship management.

A second respondent agrees that raises for purchasing pros are running at about 3% to 4%. Her company is also looking for candidates with expertise in sourcing services, IT (especially telecom) and capital equipment. She favors candidates with good project management skills.

Recruiters will tell her that they are seeing sizeable gains in compensation for purchasing pros who are able and willing to make a move to another company.

"Overall I am seeing probably a 5% to 7% increase in compensation over last year," says Deal of Tonia Deal Consultants. Whereas last year the range for an individual contributor was going into the $90,000 range, she says, now it's going into the $100,000 plus range. Plus, she says, it's becoming more difficult to place individual contributors without the perks. "I find we need sign-on bonuses, full relocation, the entire package." Where she sees some slowing is placement at the CPO level, which she believes may change beginning next spring when most companies begin assessing employee performance and either the CPO or management is thinking of making a move.

Kevin Rohan, director of procurement recruiting at J.P. Canon Associates in New York, says the typical profile of his company's clients is a Fortune 250 company in the pharmaceutical, consumer products and financial services industries in major metropolitan markets. Purchasing pros he's placed receive raises of nearly 17% when they make a move, somewhat higher than the 16.35% they received in 2006.

Shinall at Helix says he hired a lot of people this year because he is building an organization from scratch. "I have about 15 people on staff now and plan to add to that number next year," he says. "From what I see, salaries for supply chain professionals are at a premium."