Salary Survey 2005: Looking for a little respect

"Logistics plays an integral part in a company's success, but executive management looks more highly on its sales force. Sales people can promise the world, but without logistics personnel bringing in those goods, there's nothing to provide to the customers." — logistics manager with a high-tech manufacturer in the Middle Atlantic region, earning $47,000

"The changing face of transportation and the many challenges these days are difficult for others to understand. This can be frustrating, but you have to keep trying to educate them." — logistics manager with a construction materials firm in the North Central region, earning $65,000

"Supply chain/logistics has been a very rewarding career. It gets greater recognition of its impact every day. I love the company I work for." — VP/GM of a plastics manufacturer in the North Central region, earning $175,000

If there is one subject on which all logistics professionals can agree, it is that the work they do is extremely important. In terms of job satisfaction, appreciation by senior management and salary levels, the old adage proves true: Ask 1,000 logistics people a question, and you'll get 1,000 different answers. In fact, we asked 1,375 logistics people a whole series of questions as part of the Logistics Today 2005 Salary Survey, and their answers taken as a whole illustrate the wide diversity of challenges and personalities that make up the profession.

We based the following charts and tables on the input of 1,175 logistics professionalswho completed the entire survey.-This provides us with a response base nearly twice as large as the base we used in last year's survey, making the 2005 study by far the largest salary survey in the field.

So what did we learn? Salaries are up 7% for logistics managers from a year ago, but job satisfaction is actually down 3%, and the blame for a lot of that dissatisfaction is being laid on executive managment.

We also learned that the "average logistics manager" is male, between 40-49 years old, living in the North Central region, has worked in logistics for at least 20 years, has worked for his current employer (a manufacturer of industrial products) for just under five years, and earns $70,157. That's what the hard numbers tell us, anyway.

Even more than facts and figures, though, we learned what makes a logistics manager tick — what career issues affect you the most, what situations challenge you and sometimes irk you, and most especially, what it is about the logistics profession that keeps you highly motivated and keeps supply chains flowing throughout the world.

To tell the story best, as we've done in the past, we'll let you hear from your peers, speaking from their anonymous hearts.

Vertical positioning
"The nature of my business (bindery) is shotgun shipping at the best, and only an inflated salary could cover the work, the hours and the stress, but the industry's margin of profit is too small for quality people to do a quality job." — traffic manager in the printing industry in the Middle Atlantic region, earning $36,000 "Working in a pharmaceutical company, I feel there is not enough knowledge passed around to the employees as to the complete workings of the FDA, and what it takes to produce quality goods." — warehouse manager with a pharmaceutical manufacturer in the Middle Atlantic region, earning $38,400

The retail sector, which dominated much of the news coming out of the logistics industry last year thanks to Wal-Mart's radio frequency identification (RFID) initiative, is also at the top in terms of average salaries at $89,955 (a gain of 3.8% from the 2004 survey).

Logistics professionals working for computer equipment and peripherals companies enjoyed the largest raises, an average jump of 32.5% to $81,500. The apparel (-16.1%) and chemical (-9.3%) industries, on the other hand, saw their average salaries drop significantly.

By far the largest percentage (15%) of responses came from the "industrial products" vertical, which basically showed no change at all in average salary — $56,942 in 2005 vs $57,074, a drop of $132 in a survey sampling nearly twice as large as last year's survey. Perhaps because this data set is so much larger than the other groups, and certainly because many of these companies tend to fall well outside the sphere of the better-known and higher-paying Fortune 500, the average salaries for logistics professionals at industrial manufacturers brings up the rear.

From sea to shining sea
"Southern wages are not comparable to northern." — fleet manager with a producer of construction/building materials in the South Atlantic region, earning $35,000

"I have found that jobs for females in the Northeast are limited. Most hires are males." — analyst with a transportation service provider in the Middle Atlantic region, earning $30,000

"Hawaii is a poor environment for good wages." — warehouse manager with an apparel company in the Pacific region, earning $30,000

"In order to not relocate I have taken a reduced salary in a much smaller company. No regrets." — VP/GM with a wholesale distributor in the North Central region, earning $92,000

It's only fitting that the most expensive place to live in the U.S. — New York — also pays the most for its logistics professionals. The Middle Atlantic region, which also includes New Jersey and Pennsylvania, ranks at the top of the salary chart with an average of $75,874. Following closely behind are the Pacific region, at $74,244, and New England, at $74,024 (refer to map for specific states).

The largest percentage of logistics professionals (32%) live in the North Central region (which includes the Midwest), where it costs less to live and apparently takes a bit less to employ logistics people — the average salary is $67,923. The lowest-paying region ($60,005) — the Mountain region — also employs the fewest number of logistics people (only 5% of respondents).

Sometimes it's worth more to remain in an area where you're comfortable, if quality of life is just as important to you as size of paycheck. As one respondent notes above, he has no regrets about staying in the Midwest, even if he could earn more living elsewhere.

The value of a good education
"All logistics personnel should be encouraged to attend classes, seminars and become actively involved with a professional organization. Much can be learned from your peers through networking." — supply chain analyst with an industrial products manufacturer, with a 4-year degree and 26+ years experience, living in the Pacific region and earning $62,000

"In a recent job search, I have found that some companies require a bachelors degree for a management position in the shipping/logistics field. It's very difficult for people without a degree to compete without one. I believe that a company who hires a person with hands-on experience will do better than a person with a degree straight out of school with no experience." — traffic coordinator with an industrial products manufacturer, with some college and 6-10 years experience, living in the Pacific region and earning $34,000

"I don't see that many good candidates coming out of college, i.e., candidates that are willing to work their way up through an organization. Many want to start at mid-level managers — that is difficult to do without solid experience to go with the education." — VP/GM in the chemical industry, with a 4-yr degree and 16-20 years experience, living in the North Central region and earning $95,000

"Logistics is finally getting the recognition it deserves. However, as a profession, we owe it to ourselves to promote careers in logistics to graduating high school seniors as a potential career for both college-bound and noncollegebound students." — program manager for an electronics manufacturer, with a graduate degree and 11-15 years experience, living in the Middle Atlantic region and earning $84,000

The logistics profession is split almost down the middle between those with (53%) and those without (47%) college degrees. The difference in average salaries is striking: College graduates as a whole are earning $83,410, while those without a degree are averaging $55,497.

A recent survey of career patterns in logistics conducted by Ohio State University suggests that "a new generation of degreed logistics graduates are making their way into the logistics executive levels of their firms, with 23% of the respondents to the OSU survey having majored in business, 16% in logistics, 9% in engineering, and the rest in other disciplines.

It's still a man's world
"As a woman in the industry, I have found it is very difficult to get my ideas and voice heard. It shows in all aspects from specing out a truck to salaries." — female logistics manager with an industrial remanufacturer in the North Central region, earning $30,000

"Women don't get the same respect (or salary) that a man in the same position gets (at least where I am employed)." — female traffic coordinator with an industrial products manufacturer in New England, earning $35,000

"I like my job but without a college degree I am stuck. I have the knowledge and the experience but no degree. One challenge I have is being a woman in a male-dominated field. Some men are condescending in their sales approach when selling ground or air services." — female import coordinator with an industrial products manufacturer in the South Atlantic region, earning $33,000

"It is very difficult for women to get into upper management positions in manufacturing [companies]. This is still considered a man's world." — female traffic manager with a consumer goods manufacturer in the North Central region, earning $56,000

While salaries for the logistics field as a whole increased by 5.9% from a year ago, don't expect women to be happy about that. The average salary for female logistics professionals actually dropped by 7.7% to $50,645, while their male counterparts enjoyed a 9.2% raise to an average salary of $74,763.

There are any number of ways to try to justify this startling discrepancy. For instance, 57% of the men have college degrees-versus 37% of the women. In terms of job experience, 54% of the men have been in the industry more than 15 years versus 36% of the women. Also, while 8% of the men work for industrial products manufacturers (the lowest paying industry vertical), 10% of the women work for those companies.

Even so, there is clearly a glass ceiling for female logistics professionals. While 15% of the men are either in corporate management or have a vice president/ general manager title, that's true for only 4% of the women. The logistics field apparently has quite a ways to go to realize the concept of gender equality.

Self-respecting professionals
"Executives in general have little if any understanding of logistics and supply chain activities. They seem to be totally consumed with sales and finance outcomes and not on other areas that don't have apparent immediate impact on financial reporting." — production/materials manager with an industrial products manufacturer in the North Central region, earning $69,000

"Understanding the logistics field, we have to deal with more challenges and demands not necessarily by new technology but by pure ignorance of management. Although this is a harsh reality in my career, it seems throughout the enterprise we are just warehouse people." — logistics/operations supervisor with a healthcare company in the Pacific region, earning $52,000

"My superiors have absolutely no idea how important our department is to the company. I make less than someone working at Wal-Mart. I handle all issues, problems, negotiations, and even label freight when necessary. It just seems like quite a bit of work and effort for very little reward." — traffic manager with an industrial products manufacturer in the South Central region, earning $21,840

Logistics professionals are a pretty content lot, generally speaking — 78% say they are either satisfied or very satisfied with their career choices. That number, though, is down 3% from a year ago; furthermore, 37% of you feel that senior managers do not understand the role of logistics in your company's mission, and another 5% of you aren't sure. Only 58% are confident that the logistics department and the executive suite are heading in the same direction.

As a result, there's the sense that a lot of logistics managers are spraining their arms by reaching behind to pat themselves on the back; clearly, a feeling of appreciation is lacking for far too many in the logistics field.

At the same time, logistics professionals should be justifiably proud of the jobs they do. Logistics represents nearly a trillion dollars ($936 billion) in annual costs within the U.S. alone, and as one survey respondent put it succinctly, you can boil the importance of logistics down to four words — no parts, no production.

Getting senior management to understand that the logistics department is the linchpin of their supply chains will be a hard-fought battle, but there are definite signs that you're succeeding. As we illustrate in this magazine every month, the best-run companies in the world also employ the best logistics people. And that's by design, not by accident.

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