HURRY, THE SHELVES are emptying—there's a run on purchasing. The run is not on materials or products, though; it's on the purchasers of the materials and products. Purchasing, according to Bill Carpitella, CEO of the Sharrow Group in Rochester, N.Y., probably ranks in the top three (along with finance and land) when it comes to the hottest areas of hiring.
The hot market starts at the top, with the purchasing vice president. In the past few years, builders have come to realize that the role involves a unique combination of talents. Sure, the old-school bully purchasers are still out there—the ones who will stop at nothing to drive down what they pay. But, “That's a formula for suicide,” Carpitella says.
RENAISSANCE VP Today's purchasing VP must be the shrewdest of negotiators yet he also must be a superior relationship builder who can treat suppliers well and make them feel part of the team. That way, when unexpected stresses to the supply chain occur—Hurricane Katrina, for example—the vendor doesn't skewer the builder with price jumps but instead guarantees them a spot at the front of the line.
Thus, the VP is a person who ably pulls together a supplier council to get feedback and hear concerns. He's a designer of assessment tools, coming up with metrics and systems to rate suppliers for defects, quality, and delivery time. “To be able to shave the percentages from the bottom line and maintain an equitable, productive sub-base is a very high-level skill, and there aren't many people out there who are sophisticated in it,” says Carpitella.
The average purchasing VP has at least 15 years of home building experience, at least 10 of them in purchasing or operations, according to Crystal Miller, search consultant for residential construction at Plano, Texas-based Kaye/Bassman International. In spite of the fact that the market for talent is so tight, the amount of experience required for VPs may still be on the rise—an indication of the burgeoning skill sets needed to excel. “What we're seeing is that builders are actually holding jobs open longer to ensure that they're getting that right person,” says Miller.
As a result, Miller has seen salaries rise about $20,000 since the beginning of the year. “What they're going to do from there, I would hesitate to say for certain, but it's fairly safe to say they're going to go up,” she says. Carpitella notes that the biggest compensation increases across most disciplines have come in the form of bonuses, and that purchasing is no different. For the VP, bonuses are based on feedback from vendors, quality of components, cycle-time efficiencies, and, of course, cost reductions.
A purchasing VP stays in his position about three to four years, says Miller, because it's a job filled by people that have higher aspirations—perhaps VP of operations and then division president.
THE PURCHASING TRACK Purchasing managers usually have five years of purchasing experience. Typically, they move from an estimating role into a purchasing agent position, and then on to manager, a role in which they might handle purchasing for an entire division or business segment. Typical tenure in the position: two or three years, says Miller, “and then they go into a VP role of purchasing, or they may phase into operations.” However, Miller says that she has seen the creation of regional purchasing managers and VPs. Why? It's a salary-saving way to handle purchasing for a couple of nascent divisions that don't do enough purchasing to warrant two managers. And builders know that the best way to keep quality people is to make sure they're on a defined career path, so regional positions become a new opportunity for valued staff.
Purchasing managers may be the hardest to come by in the hottest markets, such as Florida, where competition for materials is fierce. The managers usually were previously purchasing agents, having learned the business by going out and finding new vendors for managers to negotiate with and sign.
If someone from the field, such as a superintendent, is eager to move up through the company, purchasing is a common path to take. A super might move into an estimator role, then become a purchasing agent, and then a manager. He knows how a home is built, and he knows the materials, so he's a good person to do the buying, Carpitella observes.