Logistics Today 2007 Salary Survey: Going for the Green (Commentary)

2007 Logistics Today Salary Survey



Even though four out of five logistics professionals who responded to the Logistics Today 2007 Salary Survey reported that they are satisfied or very satisfied with their chosen career, judging by the mood of the candid comments that we received, a much lower proportion are anywhere near as satisfied with how much they are paid for their efforts.

“Generally, logistics is underestimated in companies and so are the salaries but this is nothing new,” wrote an operations manager at a wholesale company, echoing the sentiments expressed by many survey participants, when asked to share his thoughts on his chosen career. “Companies do not recognize the importance of logistics and see it in most cases as only costs. Otherwise my biggest satisfaction in the job is the feeling of improvement, moving things forward, making things better.”

In this year's annual Salary Survey, a record 2,551 Logistics Today readers shared detailed information about themselves, their careers and exactly how well (or not) they are compensated. It’s a hot topic judging by the record number of responses (participation was up 57% over last year’s record number of participants). To ensure confidentiality all responses were anonymous.

What’s in a title?

Base salary levels of logistics professionals responding to the 2007 Logistics Today Salary Survey vary significantly by job title. No surprise there. What is somewhat surprising is how annual bonuses vary even more.

Exactly three out of four survey respondents received some type of bonus last year, which means one out of four scoffed bitterly when we asked them how much extra pay they had received. As is always the case, the earning situation was rosiest at the top. Not only did corporate executives and vice presidents overseeing logistics at U.S. companies earn the highest base salaries, and the biggest bonuses, they received the highest percentage of their base pay as a bonus (over 20%).

The typical bonus last year among logistics professionals was $3,000. Those in the upper quartile pulled in $10,000 or more in discretionary income, some significantly more. Among all managers responsible for logistics activities, manufacturing managers, materials managers and fleet managers received the lowest percentage of their base pay as a bonus (less than 5%).

“My performance I believe warrants A better salary as well as bonus potential based on the money I bring to the bottom line,” said a logistics manager working at a company with more than $1 billion in sales in the food and beverage industry who earned $50,000 last year and a $4,000 bonus. (All survey responses were anonymous.)“I feel my bonus should be based more primarily on my individual performance than the performance of the company.”

Typical (median) direct compensation for U.S. logistics managers was a little less than $68,000. But the range of salaries was fairly spread out. One out of four managers earned $50,000 or less, and one out of four earned $90,000 or more last year.

It’s not hard to guess why, regardless of job title, the highest earners were also the most satisfied with their logistics career choice. Comparing median pay levels, the respondents who said they were satisfied with their careers earned at least 12% more annually ($7,400) than those who were less satisfied with their chosen profession. Still, managers involved in logistics are a fairly happy lot. Only one out of twenty respondents said that they were unsatisfied or very unsatisfied with their career.

“I am satisfied with my salary, however moving hazardous goods is becoming more difficult on a daily basis and the job now requires much added effort to complete hazardous shipments via air or ocean,” said a manager responsible for global trade at a company with over $1 billion in sales based in New England. “Many of the shipping lines are now refusing to carry our products, making it virtually impossible to move shipments on a timely basis. It makes the job much less enjoyable than it was two or three years ago.”

Looking at those industries where we received an adequate number of responses to make valid comparisons, retail offered the highest median salaries ($80,000), followed by the related sectors of consumer goods ($75,000) and apparel ($73,750). With a median base compensation of $59,000, industrial products offered the least lucrative logistics opportunities, preceded by paper, printing and publishing ($61,500) and automotive ($62,000).

“Working in the Michigan market, the employment [situation] is terrible,” reported a 59-year-old logistics manager who earned $90,000 plus a $20,000 bonus last year. “Jobs are decreasing due to the automotive industry downsizing. The work is now being transferred to 3PLs, or overloading the remaining personnel.”

Everyone knows that larger companies, though no more profitable, tend to pay employees more than smaller ones. What’s surprising is how much more larger companies pay their people. Logistics professionals working at companies that reported more than $1 billion in revenues last year earned 35% more than those working at companies reporting less than $50 million in revenues. While there was no difference in years of experience, the median age of people at larger companies (44) was lower than at smaller firms (47).

“I think smaller logistics companies' salaries do not typically reflect the salaries of larger companies. We often have to wear many hats and don't always get compensated for our flexibility,” said a 24-year-old general manager at a third-party logistics provider earning $35,000 per year.

Although it’s a standard point of salary negotiaion because of cost-of-living differences, there was little difference in pay by region. The median pay level in New England, Middle Atlantic and South Central regions equaled or exceeded $70,000. But no U.S. region had a median base pay lower than $64,500.

When it comes to how well people are paid other key factors are seniority, related experience, education and scope of responsibility, which we measured by the number of people managed. The salaries reported by logistics managers increased steadily by age from a median of $45,000 for those in their 20s, to $75,000 for those in their 50s. Oddly, managers in their 60s earned less ($65,000 median) than those in their 40s and 50s.

Beyond the school of hard knocks, it’s no surprise that education pays off in the earnings department. Comparing median base pay, logistics managers with a four-year undergraduate degree ($71,500) earned 35% more than those with a high school diploma ($53,000). Those with a graduate degree, who accounted for one out of five survey participants, earned 73% more ($91,500). One might think that age would explain some of this discrepancy, but there was almost no difference between age and education level. That’s not to say that experience doesn’t matter.

Logistics professionals with more than 20 years of in the field earned 53% more than those with 5 years or less experience. Interestingly, in today’s world where few people expect to spend more than 10 years with any one firm, company loyalty does not translate into much higher pay. Survey respondents who had been at a company for 21 to 25 years reported the same median salary ($68,000) as those who had been in one place for 6 to 10 years.

Almost half of logistics professionals manage one to ten employees, and a third manage more than ten. Those who managed no one directly earned around 26% less ($55,000) than those with at least one person reporting to them ($69,000 or more). Managers with 50 or more direct reports earned significantly more ($84,000).

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