If it feels like you and your colleagues are working longer and harder these days, it's probably not your imagination. In the logistics and supply chain world, the 40-hour workweek is clearly a thing of the past. Only one in five of the readers who took part in DC VELOCITY's third annual salary survey worked 45 hours or less during the average week. A whopping 72 percent said they routinely logged somewhere between 46 and 60 hours a week (including time spent working outside the office). Another 9 percent appear to be stuck on a frenetic work treadmill that rarely shuts down; they're spending more than 60 hours a week on the job.
It's not just harried executives who are tethered to their work. The same thing is happening down on the DC floor among supervisors, operations managers, and shipping/receiving coordinators. If you haven't seen it in your own operation yet, chances are you will. The marathon workweeks are being reported across all industries—from food and grocery to lumber and wood products. They're being logged in companies of all sizes. And they're taking hold in facilities from coast to coast.
What's behind the epidemic of long work hours? It's partly that people in this field simply have more to do. Seventy-one percent of the 1,230 survey respondents reported that the number of functions they manage has increased over the past three years. (Another 25 percent said their responsibilities had stayed the same, and 4 percent reported a decrease.) The typical reader is no longer responsible for just, say, transportation management or fleet operations. He or she is likely overseeing warehouse/ DC operations or import/export activities as well. On top of that, professionals in this field typically manage a lot of people; 63 percent of the survey respondents have five or more direct reports.
It seems clear enough that readers are working hard for the money, but are they treated right? Our survey didn't measure job satisfaction, so it's tough to say. But if compensation is any indication, logistics and supply chain professionals have little to complain about. Our survey showed that the average salary was comfortably in the six figures—$105,834, to be precise. The median salary was somewhat lower, at $89,000. But that's still more than two and a half times the median U.S. salary, which the Bureau of Labor Statistics put at $33,634 in 2006 (the most recent year for which data are available).
As for salary trends, 78 percent saw their salaries increase in the past year, 19 percent said their pay had stayed the same, and 3 percent reported that they had taken a hit in salary. The respondents whose pay had risen reported an average increase of 9.6 percent over the previous year, which easily outpaced the 4.4 percent rise in the Consumer Price Index during the same period. We should note here that the pay increases reflected more than just annual raises. Two-thirds of the respondents reported that at least some percentage of their total compensation was based on performance.
It's all about the title
Given the broad range of titles and responsibilities among our survey respondents (see sidebar), it's probably no surprise that the latest study found a significant range in salaries. The highestpaid respondent, the president of a company in the wholesale/retail sector, earned $955,000. The lowest earner, a supervisor working in the pharmaceuticals field, brought home $25,000.
That $930,000 differential is less a reflection of pay scales in the wholesale/retail and pharmaceutical sectors than a reflection of the respondents' titles and responsibilities. When it comes to salaries, it's not what you do—or where you live or even what you know—that matters. It's what you're called. As our salary surveys have consistently shown, job title is the biggest factor in determining what you earn.
So which titles bring the highest pay? This year, it was the senior vice presidents who topped the salary charts. The median salary for the senior VPs who participated in our survey was $200,000—11 percent higher than the median salary of those next in line, corporate officers. Those corporate officers, in turn, made $20,000 more than executive vice presidents, who made $22,000 more than "plain" vice presidents. Presidents and directors came next, with median salaries of $120,000 and $110,000, respectively.
At that point, the gap began to widen. Managers made $35,000 less than directors, and supervisors earned $20,000 less than managers. Exhibit 1 shows the median salary and average salary for each title (we've used the median numbers, rather than the averages, as the basis for comparison because they are less likely to be skewed by outliers, or statistical extremes).
By the numbers
Job title may reign supreme, but there are still many other factors that influence how much a given logistics or supply chain professional makes. Where you work (geographic region), how much schooling you've had, and time spent in the trenches typically have a significant effect on salaries.
Take geography, for instance. As Exhibit 2 shows, there was wide variation in the median salaries reported in the different regions of the country. This year, the highest median salary was found in the Mid-Atlantic states, where the median pay was $104,000. From there, the median salary dropped by $13,000 to $91,000, which was reported in the West. Managers working in the Lower 48 did better than their counterparts in Hawaii, Alaska, Puerto Rico, and the U.S. Virgin Islands, where the median salary was $62,000. The lowest median salary of all, $56,250, was reported by respondents working outside North America.
As you might expect, our survey also found a strong correlation between earnings and education. As Exhibit 3 shows, the median salary for respondents with only a highschool diploma was $71,500. The professionals at the other end of the scale, those who have earned a doctorate, take home 50 percent more, with a median salary of $110,000.
Experience in the field also counts when it comes to earnings (see Exhibit 4). The median salary of newcomers to the field (those with five or fewer years of experience in logistics) was $66,500. Those at the other end of the range (respondents with more than 25 years' experience) command a significant premium for their expertise. With a median salary of $102,000, the veterans out-earned the newcomers by a little over 50 percent.
Mind the gap
What other factors have the potential to affect salary? Our survey showed that a respondent's age and gender, the size of the company he or she works for, and his or her tenure with the current employer can play a role.
Take age, for example. It will probably come as no surprise that median salaries increased with age—but only up to a point. As Exhibit 5 shows, that point occurs somewhere around age 60. The median salary for respondents aged 55 to 60 was the same ($100,000) as it was for those over 60. Our survey also revealed a yawning salary gap between respondents who are under 35 and their elders. The median salary for the younger workers was $69,635; the median salaries for the other groups ranged from $90,000 to $100,000.
Just as younger workers lag behind their older counterparts when it comes to paychecks, females working in the field lag behind males. As Exhibit 6 shows, the gap in median salaries this year was 25 percent. (That may indicate that women are gaining on men; last year's survey showed a gap of 31 percent.) The salary gap seems to be at least partly a matter of experience. The female survey respondents have less experience than the males on average: 51 percent of the women have 15 years' experience or less, compared to 46 percent of the men. Similarly, 21 percent of the men who responded have more than 25 years' experience in logistics, compared to 8 percent of the women.
As Exhibit 7 shows, our survey also found a correlation between salaries and company size. As you might expect, the bigger the company, the higher the salary—with one exception. The median salary for companies with 1,001 to 5,000 employees was slightly lower than the median salary at companies one step down in size, those with 501 to 1,000 employees.
As for salaries by the respondents' tenure with their current companies, our survey found only a very weak correlation. As Exhibit 8 shows, the median salaries for employees with six to 20 years' tenure with a company clustered in the low $90,000s. From there, the median salary jumped to $100,000 for those with 21 to 25 years' tenure, but dipped slightly for employees who had been with the company for more than 25 years.
Charting a course
In the end, of course, there are countless other variables that might enter into any given person's salary—job performance, departmental budget, and perks and benefits, to name a few. But generally speaking, the primary factors in determining salary are title, geographic region, education, experience, age, company size, and gender.
What does that mean for those eager to boost their earnings? Well, there's not much you can do about your age or gender. But if you suspect your location or a lack of schooling might be holding you back, you can think about moving to a different part of the country or going back to school.
But be careful what you wish for. A bigger paycheck will almost certainly be accompanied by more responsibilities and longer hours. In the logistics and supply chain world, there's no getting around it: You'll work hard for the money.
DC VELOCITY's third annual salary study was based on the responses of 1,230 readers who completed a 20-question survey during the first half of February. Of those respondents, 5 percent identified themselves as corporate officers (CEOs, COOs, CFOs); 4 percent as presidents; 12 percent as vice presidents, senior vice presidents, or executive vice presidents; 22 percent as directors; 46 percent as managers; and 11 percent as supervisors.
The survey respondents came from a broad swath of industries—including wholesale/retail (21 percent), third-party logistics services (13 percent), and food and grocery (8 percent). They represented companies of all sizes as well. Twenty percent were employed by companies with fewer than 100 employees, 25 percent by companies with 100 to 500 people, 9 percent by companies with 501 to 1,000 employees, 17 percent by companies with 1,001 to 5,000 people, and 29 percent by companies with more than 5,000 employees. Those companies were scattered throughout the United States, as well as Canada and Mexico. Only 1 percent of the survey respondents worked outside North America.
Our survey asked respondents to identify the functions they managed. As it turned out, only 22 percent of the respondents named just one function. The rest of the survey-takers indicated that they had multiple areas of responsibility (including 79 who said they were responsible for all of the functions listed). Warehouse and/or distribution center management was the most frequent response, cited by 74 percent of the respondents. That was followed by logistics management (63 percent), supply chain management (55 percent), transportation management (53 percent), import/export operations (28 percent), and fleet operations (22 percent).
As for the respondents themselves, 90 percent were male, 10 percent female. Some were newcomers to the workforce (14 percent were under 35 in age); others were veterans. The largest share of the respondents (71 percent) fell into the 36-to-55 age range. Thirteen percent were 56 to 65, and 2 percent said they were over 65. When asked about the highest level of education they had completed, 27 percent said high school, 54 percent had a bachelor's degree, 18 percent had a master's degree, and 1 percent had earned a Ph.D.
The majority of the respondents were seasoned professionals. When asked how many years they've worked in logistics-related jobs, only 15 percent said that they'd been in the field for five years or less. Another 16 percent have worked in logistics for six to 10 years, 18 percent for 11 to 15 years, 19 percent for 16 to 20 years, 12 percent for 21 to 25 years, and 20 percent for more than 25 years. And they're not job-hoppers: A full 62 percent said they had been working at the same company for six years or more.