We may be in a "jobless recovery" and the 2013 holiday shopping season may have been a disappointing one for many retailers, but with the housing market gaining traction, industrial production on the upswing, and the U.S. economy improving in many other respects, it's not surprising that U.S. consumer confidence is up—way up. In fact, the monthly average for the Reuters/University of Michigan Consumer Sentiment Index for 2013 was the highest since 2007.
Readers of DC Velocity have their own reason to feel upbeat about their economic circumstances: In 2013, the average compensation for respondents to our annual salary survey was $119,538—up 10 percent over last year's average. The median, or the midpoint of all salaries reported, was $102,000, up from $90,000 the previous year. While the mix of respondents who participate in the survey in any particular year will have a big impact on the average numbers, there's no question that the majority of survey takers are better off than they were a year ago. Well over two-thirds (69 percent) of the 443 qualified respondents said their annual compensation increased last year. In terms of size, those raises remained flat, though—a little above 6 percent on average, slightly higher than the previous year. Meanwhile, about one-fourth (26 percent) said their salaries had stayed the same. And just 5 percent said they were making less money in 2013 than they did the year before, the smallest percentage since before the Great Recession.
All of those numbers are an improvement over the previous survey's responses. Last year, 62 percent of respondents said they had received raises in 2012, 31 percent said their salaries had stayed the same, and 7 percent took pay cuts. That continues a pattern we've seen since 2010: more respondents reporting raises, and fewer and fewer reporting stagnant or declining salaries. The steady drop in respondents who suffered pay cuts suggests that fewer readers are out of work or are being forced to take lower-paying jobs these days.
PUTTING IN THE TIME
Their compensation may be on the way up, but readers certainly are not sitting back and enjoying their raises. In fact, they seem to be working harder than ever. Only 20 percent of those who took part in the survey said they worked 45 hours or less during the average week. Another 70 percent said they typically worked 46 to 60 hours a week (including time spent working outside the office). A no-doubt-exhausted 10 percent said they're 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 92 percent of respondents reporting that their work hours had increased or stayed the same over the previous three years, it's clear that almost everyone is putting in their time, and then some.
One possible reason for the long hours is that most of the respondents have more responsibilities than they did in the past. Sixty-four percent of the survey participants reported that the number of functions they manage has increased over the past three years. Another 32 percent said their responsibilities had stayed the same, and just 4 percent reported a decrease. It's rare, moreover, for a reader to be responsible for a single function. Fewer than two-dozen of the survey takers said they have one functional responsibility, and more than half said they are responsible for three or more of the six functions mentioned in the survey. The greater the number of functions you oversee, of course, the more people to manage. No surprise, then, that nearly two-thirds (64 percent) of the survey respondents said they had five or more direct reports.
Another reason why DCV readers work so hard is that on average, 18 percent of their compensation is based on their performance. Vice presidents, directors, and managers in the third-party logistics, wholesale, and transportation businesses are most likely to have 50 percent or more of their pay based on performance.
With respondents reporting a wide range of titles and responsibilities, it's inevitable that our survey would show a significant range in salaries. Which titles pay the most on average? Corporate officers were at the top of the salary ladder. The average salary for C-level respondents was $250,364—considerably higher than the average salary of vice presidents, who at $181,077 were better paid than presidents and directors. They reported average salaries of $146,892 and $124,630, respectively.
From there, it's a big drop down to the lower levels. Managers made over $37,000 less than directors, and supervisors earned approximately $23,000 less than managers. Exhibit 1 shows the average salary for each title.
EXPERIENCE, 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, which industry you work in, 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 education. Did your parents advise you to go to college so you'd make more money? They knew what they were talking about. Exhibit 2 illustrates the strong correlation between earnings and education. The average salary for respondents with only a high school diploma was $97,450. It was a big step up from there to a bachelor's degree—the highest level of education for nearly half of the survey respondents; those respondents took home an average salary of $121,113. A master's degree (either in the field or in business) was worth an additional $24,000.
Experience in the field also influences earnings (see Exhibit 3). The average salary of newcomers to the profession (those with five or fewer years of experience in logistics) was $85,620, while the median for that group was a respectable $77,000. Once you get up in the range of 16 years or more of logistics experience, both the average and the median salaries climb to well above $100,000. With an average salary of $148,675 and a median of $120,000, those who have been in the business longest (respondents with more than 25 years' experience) command a hefty premium for their expertise.
As Exhibit 4 shows, which industry you work in can have an enormous impact on your salary. Since nearly half of respondents are at the director level or above, it's not surprising that most of the industry averages exceed $100,000. The highest-paying industries include such high-growth sectors as third-party logistics ($160,357), pharmaceutical and health care ($136,526), and apparel and footwear ($136,569). On the opposite end of the scale are the perennially lower-paying industries like furniture and fixtures, at $87,222, and government and military, at $69,605.
There have always been significant differences in pay scales among the various geographic regions, and that continues to be true, as Exhibit 5 makes clear. The highest average pay, $141,981, was in the Southeast, home to some of the fastest-growing manufacturing and distribution areas in the country. The Midwest—still America's industrial heartland, with 38 percent of survey respondents—was next, at $123,846. New England reported the lowest average salary, the only region that came in at less than $100,000.
AGE HAS ITS REWARDS
A potpourri of other factors can have an influence on salaries. Our survey found that a respondent's age and gender, and the size of the company he or she works for can also make a difference.
Take age, for example. It's logical that salaries should increase with age, and that's exactly what the survey results showed. Younger folks—those in the 26-35 age range—averaged a respectable $88,730. Middle age has its rewards, though. Respondents aged 36 to 45 reported average salaries of $103,022, and the next bracket (46-55) made about $16,000 more. Those who stick with this profession for the long haul will be rewarded: Elder statesmen (and women) age 56 and older, the majority of whom have higher-level positions, earned average salaries of $133,650.
For as long as logistics industry salary surveys have been around, women have lagged behind men in terms of their compensation, and this year was no different. Female respondents earned an average of $84,601, while male respondents reported an average salary of $123,489—a difference of nearly $40,000, or 32 percent. That difference can be attributed in large part to less education, lower positions, and fewer years of experience than their male counterparts. One-third of female respondents had a high school education only, and just five of the women survey takers held vice president titles. Sixty-one percent of the women who responded to this year's survey had 15 years' experience or less, compared with 28 percent of the men.
The size of the company you work for makes a difference in your salary. As you might expect, small businesses—those with fewer than 100 employees—pay the least, an average salary of $92,277. Working for a larger company will get you a larger salary—at least $20,000 more for this year's respondents. Working for the largest corporations (those with more than 5,000 employees) does not guarantee the highest salaries, though. Respondents who worked for companies with between 500 and 1,000 employees did best, with an average salary of $157,350.
As anyone who's ever undergone a salary review well knows, there are countless variables that might influence a person's compensation—not just the many factors mentioned above, but also such considerations as job performance, departmental budget, internal politics, and perks and benefits, to name a few.
But it's also clear that salaries reflect overall economic conditions. As orders and shipping volumes continue to climb, e-commerce expands, and more manufacturing returns to North America, demand for capable, knowledgeable logistics and supply chain talent will also continue to grow. And that means the size of their paychecks is likely to stay on an upward trajectory for some time to come.
As part of this year's annual salary survey, we asked respondents how they feel about their profession: Are they satisfied with their choice? Would they recommend it to others? What do they like most about their jobs? What do they like least? Here's a quick look at what they had to say.