The economy may be in freefall, but logistics salaries appear to be holding their own …for the most part anyway. About onethird of the 1,148 logistics professionals who responded to our fourth annual salary survey in February said their total annual compensation had stayed the same in the previous 12 months. And more than half (53 percent) said their annual compensation had actually increased—better than you might expect considering the headlines of late.
Not everyone was so fortunate, though. About 14 percent of the respondents said they were making less than they did the previous year. That's a significant jump compared to 2008's survey, when only 3 percent of respondents said their pay had fallen during the past 12 months. This group most likely includes people who are unemployed, have taken a pay cut, or have taken a lowerpaying position after losing their previous job. In fact, no matter how you looked at the data, median and average salaries were down slightly almost across the board.
Hard labor
Their paychecks may be smaller, but readers are working as hard as ever. Only 25 percent of those who took part in the salary survey said they worked 40 hours or less during the average week. Another 68 percent said they typically worked 46 to 60 hours a week (including time spent working outside the office). A harried 7 percent can't seem to tear themselves away, devoting more than 60 hours a week to their jobs. And it doesn't seem to matter much what your title, industry, or location may be—with 87 percent of respondents reporting that their work hours had increased or stayed the same, almost everyone is putting their nose to the grindstone these days.
That's partly because many people in this field have more responsibilities than they did in the past. Sixtysix percent of the survey respondents, in fact, reported that the number of functions they manage has increased over the past three years. Another 29 percent said their responsibilities had stayed the same, and 5 percent reported a decrease. The typical reader, moreover, is no longer responsible for a single function. Plenty of respondents said they carried responsibility for three or more of the six functions mentioned in the survey (see the sidebar). The greater the number of functions you oversee, of course, the more people to manage. No surprise, then, that 61 percent of the survey respondents said they had five or more direct reports.
So what kind of compensation are readers being paid for those long hours and growing lists of responsibilities? As we noted earlier, in many cases, it's less than they made before. The average salary this year was $97,776 (down from $105,834 the previous year), while the median salary was $83,000—some $6,000 less than the median in last year's survey.
That downward slide is due in part to the record number of respondents (14 percent) whose pay declined in the previous 12 months. Yet some respondents appear to be holding steady or even doing a bit better than in the past. Thirty-three percent said their pay had not changed over the previous year, and a fortunate 53 percent brought home more bacon during that same period. The latter reported an average increase of 5.5 percent over the previous year (the median was 3.6 percent). It's important to note that those numbers reflect more than just annual raises. Sixty-one percent of all respondents reported that at least part of their total compensation was based on performance.
Title bout
With respondents reporting a wide range of titles and responsibilities (see the sidebar), it's inevitable that our survey would show a significant range in salaries. For the most part, the latest results are similar to patterns we've been seeing all along. One interesting exception: The biggest paychecks this year did not go to the highest-level executives. The three highest-paid readers all identified themselves as managers; they hailed from the pharmaceutical and health care ($980,000), wholesale/retail ($950,000), and food and grocery ($900,000) industries. The three lowest earners, who came from the wholesale/retail and electronics/electrical equipment and components industries, brought home between $10,000 and $12,000—unusually low numbers that may reflect job losses or part-time work.
It's impossible to know whether that nearly million-dollar differential is an anomaly or signals some new trend. But in most cases, job title is still the biggest factor in determining the size of your paycheck.
Which titles pay the most on average? As was the case last year, vice presidents were at the top of the salary ladder. The median salary for VP-level respondents was $144,000—5 percent higher than the median salary of those next in line, corporate officers. Presidents and directors came next, with median salaries of $120,000 and $104,000, respectively.
From there, it's a big jump down to the lower levels. Managers made $28,000 less than directors, and supervisors earned $19,000 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 statistical extremes).
Experience and education count
Job title may carry the most weight, but many other factors influence how much an individual logistics or supply chain professional makes. The region where you work, your level of education, and how long you've been in the business will typically play a big role in determining your salary.
Let's start with geographic region. As Exhibit 2 shows, this year, the highest median salary was found in the Western states, where the median pay was $87,500. The Middle Atlantic region paid second best, with a median salary of $85,700. Managers working in the Lower 48 did considerably better than their counterparts in Hawaii, Alaska, Puerto Rico, and the U.S. Virgin Islands, where the median salary was just $63,000.
Did your parents push you to get an advanced degree so you would make more money? Well, they knew what they were doing. Exhibit 3 illustrates the strong correlation between earnings and education. The median salary for respondents with only a highschool diploma was $67,000. With a median salary of $145,000, those who have earned a doctorate take home more than twice as much.
Experience in the field also influences earnings (see Exhibit 4). The median salary of newcomers to the profession (those with five or fewer years of experience in logistics) was $66,650. Those at the other end of the scale (respondents with more than 25 years' experience) command a hefty premium for their expertise. With a median salary of $100,000, the veterans outearned the newcomers by about 50 percent.
Grab bag
A grab bag of other factors can have an influence on salaries. Our survey found that a respondent's age and gender, the size of the company he or she works for, and the length of his or her tenure with the current employer can make a difference.
Take age, for example. It seems logical that median salaries should increase with age; as Exhibit 5 shows, that is true, although the differences start to taper off once respondents reach their mid50s. The median salaries for respondents aged 56 to 60 ($89,000) and for those over 60 were separated by just a few hundred dollars.
For as long as salary surveys have been around, women have lagged behind men in terms of their compensation. As Exhibit 6 shows, the difference in median salaries this year was $20,000, or 31 percent. The persistent gender gap appears to be based to some degree on experience. Sixtyfive percent of the women who responded to this year's survey had 15 years' experience or less, compared to 40 percent of the men.
The size of the company you work for makes a difference in your salary (see Exhibit 7). As you might expect, small businesses—those with fewer than 100 employees—pay the least, a median salary of $75,000. Working for a slightly larger company will get you a slightly larger salary—$2,500 more, to be precise. From there, it's a steady step upward to the large corporations that pay a median salary of $95,000.
When it comes to pay, the length of respondents' tenure with their current employers seems to be less important than you might expect. As Exhibit 8 shows, our survey found only a weak correlation between them. As has been true in past years, salaries do not necessarily increase with the number of years with a particular employer. This year, median salaries for those with 11 to 20 years of service with their current employer dipped below those of more recent arrivals. The most senior people, however, outpaced the rest of their colleagues by several thousand dollars.
Glimmer of hope
As anyone who's ever undergone a salary review well knows, there are countless other variables that might influence a 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 realistic: In the current economy, even tactics that were once considered tried and true may not pay off.
It's clear that the salaries reflect what's happening in the economy at large. As orders and shipping volumes decline, companies are discontinuing bonuses and cutting compensation. Don't give up hope, though. More than half of the survey respondents saw their pay increase, albeit by a pretty slim percentage. And when times get tough, smart companies take a fresh look at their operations to find efficiencies and cost savings. Who better to take on that mission and prove their worth than logistics and distribution pros?
