The Daily Recruiter

By Jeff Berman, Senior Editor — Logistics Management, 3/1/2008

Median salary hasn’t budged for three years and a majority of shippers say that next rung is just out of reach. However, a surprising 57 percent report that they’re satisfied with their logistics careers despite the slowdown in pay increases.

• Just the facts
• Title talk
• Be cool, stay in school
• Who, What, and Where
• Hold on

Back in March 2007 we had the unenviable task of reporting that the median salary for logistics professionals over the course of 2006 didn’t budge from the previous year—it held firm at $80,000.

Based on our reporting at the time, we learned that the key reason for this stagnation was that annual compensation for logistics and supply chain professionals was in the early stages of a “leveling off” phase—data that was confirmed by a number of industry recruiters—after logistics professionals enjoyed 10 years of consistent salary growth form 1994-2004.

Well, we’ve tabulated the 2007 results and we regret to report that shippers who are attempting to navigate toward a more lucrative career unfortunately find themselves mired in a period of “dead calm.” According to our findings, the median salary came in at $80,000 for the third year in a row.

Get the full report from our webcast which will air live at 1pm EDT March 27, 2008. Following that date the event will be available to view on-demand. Register for this free informative webcast presented by Logistics Management today.

However, we did manage to find a sliver lining. Despite the flattening of salaries in recent years, it’s encouraging to report that nearly two-thirds—or 57 percent—of respondents indicated they’re actually quite satisfied with their logistics or supply chain careers. A couple predominate reasons shippers cited for career satisfaction were the increasing number of new challenges they’re facing day-to-day and the fact that those challenges have made the work more interesting.

That’s certainly easy to understand, since the state of the current freight market have given shippers new opportunities to show top management that, through savvy transportation management and distribution network re-design, they can make an impact on the bottom line. Some of the positive factors affecting job satisfaction among this 57 percent were a feeling of accomplishment (67 percent); salary (45 percent); and relationship with their boss (45 percent). For the 35 percent that said they were dissatisfied, company politics, salary, and “no room for advancement” were their biggest issues.

But not matter how satisfied many shippers may be with their careers at this point, the fact remains: The median salary has flattened. Here are the detailed results from our 24th Annual Salary Survey.

Just the Facts

All the data for this year’s Salary Survey is based on feedback from 1,228 respondents. The survey was conducted via e-mail from January 3–8, 2008; and it’s important to note that 29 percent of this year’s respondents participated in last year’s survey. However, even with the changes in the sampling pool from one year to the next, the typical profile remains remarkably similar year over year.

Download a PDF of the research results of our Salary Survey from the Logistics Management Resource Center

This year’s average respondent is a 45-year-old, college-educated male. To dig even deeper into the demographics, the majority—86 percent—of respondents were male, and 93 percent have attended college. The average female respondent is 43. The typical respondent has spent 6.4 years with his current employer—matching last year’s number—and has been in his current position for 4.8 years. Average length of work experience was 15 years, down slightly from 15.7 last year.

The fact that these core metrics have stayed pretty much the same over the past three years may help shippers digest that the median salary has held steady. According to Jim Rohan, senior partner a JP Canon Associates, a supply chain executive search firm in Manhattan, this data supports his contention that “job security” is one major factor in holding salary numbers flat.

“Many people are comfortable in their job for any number of reasons, and there is not a lot of turnover,” says Rohan. “But they are possibly paying a price for staying where they are, with the result being a correlation between time spent with a company and the flattening of the earning curve—making annual raises subject to what the survey is finding.”

While the median salary—the mid point used when extreme highs and extreme lows skew the average—has hit a dead calm, the median raise did come in at 3.6 percent, which is identical to 2007 and slightly ahead of the 3.4 percent median raise reported in 2006.

Average raises were fairy even with past years, the survey found. Seven percent of respondents reported receiving a raise of 2 percent or less, while 47 percent reported a 2-4 percent bump. Seventeen percent reported getting a 5-7 percent raise, 6 percent told us they received a bump of 8-10 percent, and a lucky 7 percent said they saw their paychecks rise by 11-20 percent. Five percent told us they received a raise of 20 percent or more—marking a pretty good year for a fortunate few.

Title Talk

As we’ve seen year after year, the more important your title sounds the more money there will be in your paycheck. However, just because you have a fancy title doesn’t mean that you’re immune from taking a little hit in pay.

Out in front again were vice presidents and general managers—11 percent of survey respondents—with an average salary of $134,000 for 2007, that’s a drop from $146,000 in 2006. Corporate and division managers, who represent 9 percent of the sampling size, followed at $115,000, a 12 percent annual improvement over 2006’s $101,250. Traditionally the largest group in the survey, logistics managers, averaged $78,050, down from the 2006 average of $80,000 by 2 .4 percent.

Along with title, job function influenced compensation breakdowns. Respondents reporting supply chain management as their main job earned an average salary of $105,000, eclipsing 2006’s $102,385 by 2.7 percent. Those involved with computer systems were next at $90,000, despite falling far short of 2006’s average of $110,000 by 18.8 percent. And average salaries for more narrowly-defined operations-oriented job functions like purchasing, materials handling, fleet operations, and traffic/transportation ranged from $61,400-$75,000.

While the importance of title appears to equate into higher pay, it may not necessarily indicate higher pay under all circumstances, says David Thomas, an executive recruiter at North American Findings Ltd, a Toronto-based logistics industry search firm. “It does seem that specific job functions play a larger role than title these days,” notes Thomas. “Based upon my conversations with many senior professionals in the logistics and supply chain world, many are of the mind that a title is really irrelevant. They are far more interested in the scope of a potential role.”

Be Cool, Stay in School

As always, education and experience factor into your bottom line. Respondents with a high school diploma earned an average $63,375 in last year, a 3.7 percent bump from $61,000 in ’06.

Respondents with some college experience earned an average of $73,082, while those with a bachelor’s degree averaged $83,692, a 4.8 percent increase from 2006’s $79,635. Respondents with MBAs earned an average $98,610, down 1.4 percent from the 2006 salary of $100,000 and 6.1 percent down from $105,000 reported in 2005. Perhaps an MBA is not paying off as much as it once did.

A new question we added last year regarding supply chain- and logistics-specific education again yielded some interesting results. Respondents with an undergraduate degree in logistics or supply chain management earned an average salary of $80,000, edging out the ’06 salary of $79,635 by 0.5 percent—which is on par with the $80,000 median. But a graduate degree in logistics or supply chain management brought home on average $100,000, a 4.4 percent increase from 2006’s $95,560. This tally actually pushed it ahead of what the average MBA holder takes home, making the case for the emergence of industry-specific education paying off. Meanwhile those with a professional certification—like those conferred by AST&L or APICS—earned $92,000 on average, a 1.3 percent drop from $93,250 in 2006.

“Undergraduate and graduate supply chain and logistics offerings are something that students are gravitating towards,” says Robert McInturff, president of Natick, Mass.-based McInturff & Associates, an executive placement firm specializing in supply chain and logistics. “It’s a hot major…and it’s helping job applicants stand out.”

Who, What, and Where

As we find year after year, the longer you have been doing a particular job the better you will be compensated. Respondents reporting between 1 and 10 years of experience earned an average salary of $66,000, while those reporting 11 to 15 years of experience earned $84,000.

Like last year, salaries evened out a bit after the 15-year mark, with those at the 16 to 20 year point in their career averaging $86,500. Respondents with 21 to 25 years and 26 to 30 years of experience earned $88,000 and $95,000, respectively.

With more than 80 percent of the survey’s respondents being male, once again it came as little surprise that they earn more than women on average. Male respondents averaged $84,150, while female respondents checked in at $65,268. It is worth noting that the $18,882 difference in pay between the genders in 2007 was $2,503 less than our 2006 results—indicating that the income gap may be closing. The average male had 15.7 years of work experience in logistics compared to 12.9 for women; while male respondents also had more direct reports (9.7 versus 5.6) and out earned women in various title categories.

Potentially, the most consistent finding from year to year is the correlation of average salary to a company’s annual transportation budget. Those at companies with annual transportation budgets of $101 million or more reported an average salary of $103,567. And those working for companies spending less than $500,000 annually averaged $63,000.

Again this year we broke out pay by the various industries in which logistics professionals practice their craft. Logistics consulting was again at the top with an average of $106,000. It was followed by retail and third-party logistics (3PL), which both came in at $92,500. Chemicals, automotive, and computers/electronics averaged $86,625, $85,000, and $83,000, respectively.

Where you live and choose to work most certainly affects your earning power, according to our survey findings. The New England region out paced all locales with an average salary of $95,000, crushing 2006’s average of $85,000. The Mid-Atlantic region followed at $88,000, besting the $82,000 posted in ’06. The Pacific region placed third at $86,000, while the West South Central, South Atlantic, East South Central, Mountain, East North Central, and West North Central represented the rest, ranging from $76,000 to $83,000.

Hold On

Overall, while it appears that salary growth has come to a standstill at the same time the U.S. economy is on shaky footing, the roles of supply chain and logistics professionals are going to be more important than ever as shippers strive to make their supply chains as lean and efficient as possible to stay afloat during these difficult market conditions.

While raises may be harder to come by for now, it will not stay that way forever. Like they say with the stock market, it is best to “ride it out” and wait for the turnaround. It is likely that logistics professionals will be front and center when that turnaround occurs.

By Jeff Berman, Senior Editor — Logistics Management, 3/1/2008

Jeff Berman, Senior Editor
Tel: (781) 734-8449
Email: jeff.berman@reedbusiness.com
A 13-year newspaper, B2B magazine, and online veteran, Jeff joined LM in November 2005 to strengthen daily and monthly news coverage for our print and online products. He covers various facets of the transportation, supply chain, and logistics sectors, including trucking, railroad, ocean and air cargo, third-party logistics, technology, transportation policy, and rules and regulations. “Reporting and writing about how products move through the supply chain on a daily basis—and communicating logistics best practices to our readers—is something I simply enjoy doing.”