Becoming a Contract Manager: Pros and Cons
Contract managers negotiate, draft and maintain procurement agreements between buyers and sellers. Check out the following pros and cons of a contract manager career:
| Pros of a Contract Manager Career |
|---|
| High annual wage (average around $112,000 in May 2014)* |
| Career advancement opportunities (Can advance to senior-level positions in contract management)* |
| Can work anywhere (contract managers are employed in all states)* |
| Jobs found in many industries that need to make purchases (government, enterprise management, manufacturing, wholesale trade)* |
| Cons of a Contract Manager Career |
|---|
| Slow job growth (4% job growth projected from 2012-2022)* |
| Requires a bachelor's degree or higher* |
| Need experience in procurement to have a management job* |
| Overtime often required* |
Sources: *U.S. Bureau of Labor Statistics
Career Information
Job Description
Contract managers assist in the creation, review and execution of contracts, including purchasing agreements, distribution agreements, consulting agreements and licensing agreements. Negotiation is a large part of the job since they work with suppliers to get the most competitive terms that will satisfy the customer. They also answer questions regarding contract terms, including requests for changes, and they keep documentation throughout the contract's life. While much of this work may be done at an office, some contract managers need to travel within the country or abroad.
Other job duties fall in the category of project management and may include making sure employees carry out contracted work within budget, in compliance and on time, determining project risks and mitigating risks effectively. Contract managers also lead or assist other contract and project management personnel and may train them on compliance and company procedures as needed. A workweek of over 40 hours is common in this career.
Career Prospects and Salary Info
The U.S. Bureau of Labor Statistics (BLS) classifies a contract manager as a type of purchasing manager. The BLS projected a four percent growth rate for purchasing managers over the 2012-2022 decade, which is slower-than-average. Jobs in this field are affected by the health of the industry in which you work, according to the BLS. The company and enterprise management industry has the highest level of employment. California, Texas and New York have the highest employment of contract managers.
Contract managers earned a mean annual salary around $112,000 and a median wage of about $106,000, according to the BLS in 2014. In 2014, the lowest 10% earned about $61,000 or less, and the top 10% made about $169,000 or more. The top paying industries for purchasing and contract managers are found in the other information services and securities and commodity contracts intermediation and brokerage industries.
What Are the Requirements?
Education
Most contract manager jobs require a bachelor's degree. While business and contract management are common majors, some employers look for degrees in legal studies or a technical field, such as engineering. Useful courses include conflict management, business law, contract management, project management, accounting and finance. Depending on the major you choose, these courses may be required or offered as electives. Since this career requires you to give presentations and communicate with many people, a course in public speaking or business communications can be beneficial. Courses that cover the use of productivity software are also important.
Useful Skills
A contract manager needs strong interpersonal skills to maintain customer relations. Oral and written communication skills are needed to write agreements, documentation and reports. You'll need to be skilled at time management and decision making to be able to prioritize competing tasks and get them completed in time. Being an excellent negotiator is critical for negotiating agreements with vendors, and strong analytical skills can help you get the best offers from suppliers.
What Do Employers Look for?
Job requirements depend on the industry you work for, but generally include an undergraduate education, contract management expertise and industry-specific knowledge. Some companies prefer a master's degree, legal education or contract management certification. The following are some job posts from May 2012:
- A management consulting company in New York City seeks a contract manager with at least six years of experience in contract management, including three in negotiation and drafting. Information technology contract management experience is also needed. The candidate needs at least a bachelor's degree, but an advanced degree is preferred along with membership in the National Contract Management Association and the Certified Professional Contracts Manager credential.
- An engineering resources firm in Wisconsin advertised for a contract manager with a bachelor's degree related to business or engineering, three years of contract management experience and computer skills. The position requires travel and an understanding of engineering drawings. The company prefers experience using SAP business software.
- A real estate company in Oregon is looking for a contract manager who has experience in contract research, marketing or sales. The candidate needs to able to draft and negotiate contracts, ensure contract compliance, manage risks and manage contract renewal.
- A Missouri health services company seeks a purchasing contract manager with at least three years of related work experience, a bachelor's degree related to law, business or contract management, Microsoft Office experience and legal expertise. The company prefers candidates with a related master's or law degree.
How to Maximize Your Skills
Get Certified
The Certified Professional Contracts Manager Certification (CPCM) is suitable for managers of both commercial and government contracts. This certification from the National Contract Management Association can help you distinguish yourself and become more competitive. You'll need to pass an exam, which has five competency areas, including business, specialized knowledge, pre-award, post-award and acquisition planning. The exam has multiple prerequisite requirements, including a bachelor's degree, five years of work experience and 120 continuing education hours. You'll also need a strong business background.
Complete a Master's Degree in Contract Management
A master's degree related to contract management can help you learn more about business and contract management. The BLS notes that a master's may be necessary for top-level jobs in the field. Some business courses you might take include project management, operations management, accounting, supply chain management, human resources, finance and organizational behavior. Contract management courses may focus on legal considerations, procurement, negotiation, disputes and intellectual property. These programs may culminate with a contract management research project.
Other Careers to Consider
Wholesale and Retail Buyer
If you are looking for an alternative career that lets you purchase products for companies but does not focus solely on contracts, consider becoming a wholesale and retail buyer. You'll determine how many products to purchase while considering past buying trends and prices, and you'll follow contractual agreements when selecting and paying for merchandise. While some companies may require a bachelor's degree, a high school diploma and on-the-job training might be sufficient. Wholesale and retail buyers have slightly better career prospects than contract managers with 9% employment growth projected from 2010-2020, according to the BLS. In May 2011, the BLS reported that wholesale and retail buyers made an annual mean wage of about $57,000.
Sales Representative
If you'd rather be involved in selling products rather than the purchasing process, a sales representative career is an alternative. Some job duties include following up with leads, working with prospective customers in determining product needs, negotiating prices and completing the sales process. Companies often offer on-the-job training, so you may only need a high school diploma. In industries where you'd sell technical products, you might be required to hold a degree. According to the BLS in 2011, sales representatives who sold technical and scientific products earned an average annual salary of around $86,000, and those who sold other types of products earned an average of about $64,000 a year. With 16% employment growth expected from 2010-2020, sales representatives have a better job outlook than contract managers.
