“We need to get people in government out of the rule-making business as it applies to industry. I can think of no one in the present administration that knows squat about industry and material handling in general (except perhaps juggling books).” — sales/business development manager in the aerospace & defense industry with 26-plus years of experience, living in New England and earning $60,000
“Our labor pool is getting scarier by the day. As our education system pumps out graduates that function at grade school levels, businesses continue to suffer.” — distribution/warehouse manager with a plastics and rubber products manufacturer with 26-plus years of experience, living in the South Central region and earning $95,000
“One hundred percent of industry investments have gone into improving production output with no consideration given to updating warehouse processes. The warehouse workers are just told to work harder.” — distribution/warehouse manager with a consumer goods company with 21-25 years of experience, living in the South Central region and earning $84,600
“So many issues are coming at the U.S. material handling and manufacturing industry, such as the value-added tax, government regulations authored by professional know-nothings fresh out of college, and the failure of the U.S. to work out balance of trade, allowing foreign industry to decimate U.S. manufacturers.” — consultant in the aerospace & defense industry with 26-plus years of experience, living in New England and earning $50,000
“Help!” — operations manager with an automotive manufacturer with 16-20 years of experience, living in the North Central region and earning $85,000
Charts and Tables - The data behind the 2011 MH&L Salary Survey
MH&L’s 2011 Salary Survey Comments - For many material handling and logistics managers, maintaining the status quo in 2010 was a step up from the recession years.
Salary Survey main page - Get all of your Salary Survey information here
Prime the Pipeline for the Next Generation of Supply Chain Professionals - High-demand supply chain positions carry a greater expectation for professionals entering the field, putting a higher premium on education and on-the-job training.
Multiple Talents, One Hire - To get the most out of a workforce, it helps if each worker is multi-talented. They'll build the bridge to your company's future.
Although the recession is said to have officially ended back in June 2009, its effects still linger on in the guise of the millions who are still unemployed, under-employed or prematurely retired. Although the recession affected virtually every industry in some way, the material handling and logistics field was acutely sensitive to the economic downturn since traditionally the industry is among the first to be affected by a recession and among the last to fully recover. That’s the nature of the supply chain, where the ramping up of production and the movement of those goods through various channels and pipelines takes a good bit of time.
But let’s cut to the chase: Are things better than they were a year ago when it comes to the paychecks of material handling and logistics managers? The short answer is: no, not really. The average salary rose from $80,084 in 2010 to $81,016, which represents an increase of 1.2%. However, the inflation rate in the United States in 2010 was 1.6% (according to the U.S. Bureau of Labor Statistics), so unless you were one of the lucky few whose salaries rose more than 2% over the past year, your standard of living most likely is at status quo compared to 2010. Based on the comments we received in the MH&L 2011 Salary Survey, there’s a lot of pent-up frustration with how long it’s taking for the economy—and more specifically, salaries—to recover.
From the responses we received, we can paint a picture of a typical material handling and logistics manager: He is a white male in his 50s, living in the Midwest, with more than 25 years of experience in the industry, and working for a wholesaler/distributor that reduced staff in 2010. That’s what the average manager looks like in the aggregate, but this article will also examine the specific challenges and accomplishments of individual managers, giving them an opportunity to tell their stories in their own (anonymous) words.
From Sea to Shining Sea
“In our area of the country and at my age, I am thankful to have a job, although having my salary frozen this year after a 1% increase last year is not a desirable thing.” — inventory/materials manager with a utility company with 26-plus years of experience, living in the South Atlantic region and earning $75,500
“Economics and stability are the main concerns, especially in Arizona.” — corporate/executive manager with a wholesaler/distributor with 11-15 years of experience, living in the Mountain region and earning $125,000
“For the area I live in, I am fortunate to have such excellent employment.” — supply chain manager with a textile manager with 26-plus years of experience, living in the South Atlantic region and earning $97,000
“Our area is low paid.” — engineering manager in the retail trade industry with 11-15 years of experience, living in the North Central region and earning $55,000
Despite some obvious differences in average salaries between different regions of the country, the grass isn’t always greener in somebody else’s supply chain. The map on page 23 indicates, for instance, that the top average salaries ($91,430) are earned in the Middle Atlantic region, namely New York, New Jersey and Pennsylvania, but of course, the cost of living in this region is also higher than anywhere else in the country.
In terms of sheer numbers, one-third of all the country’s material handling and logistics managers live in the North Central region of the U.S., i.e., the Midwest. Their salaries ($84,827) are less than their Middle Atlantic counterparts, but the cost of living is significantly lower as well.
According to the survey, the lowest salaries tend to be in New England, at $56,404. Demographics studies suggest that the country’s population is moving southward or westward, toward warmer climates (and often, toward right-to-work states), and salaries for those regions tend to fall somewhat in the middle.
The Nature of the Job
“As part of the trade show industry, I am in quite a unique industry. There are not as many opportunities for efficiency/automation. Most WMS [solutions] are designed for manufacturing/production, but we build custom trade show booths, which are seemingly modified for almost every show.” — distribution/warehouse manager in the trade show industry with 6-10 years of experience, living in the Middle Atlantic region and earning $56,000
“Long-term benefits were put on hold due to slow cycle in the industry. Salary increase was also affected.” — engineering manager with a utilities company with 3-5 years of experience, living in the Pacific region and earning $97,000
“Salary is based on actual hours worked and can vary significantly. Business is slow; normal salary was about $135,000.” — consultant with a wholesaler/distributor with 26-plus years of experience, living in the Middle Atlantic region and earning $50,000
“Our part of the industry—waste material handling—is still very antiquated.” – corporate/executive manager with an industrial machinery producer with 26-plus years of experience, living in the North Central region and earning $100,000
“I am working towards becoming a professional stock options investor, so I’m not the most enthusiastic about my current career.” — engineering manager with an industrial products manufacturer with 3-5 years of experience, living in the Middle Atlantic region and earning $78,000
“We need to interconnect better and transition more quickly to the new climate of doing business. The industry is stuck in the 1980s.” — sales/business development manager with a consulting firm with 21-25 years of experience, living in the Middle Atlantic region and earning $120,000
There’s no “one size fits all” definition of a material handling and logistics manager due to the wide range of job titles in many different vertical industries. That being said, it’s possible to pinpoint which industries and titles tend to pay the highest (and lowest) salaries. For the purposes of this survey, we looked at 14 different job titles in 19 different vertical sectors.
Based on the survey results, managers working for transportation/warehousing companies are at the top of the compensation ladder, with average salaries of $96,769. Next highest on the list are those who work for chemical producers ($94,962), followed by managers at material handling equipment manufacturers ($93,032). Pulling up the rear with the lowest average salaries are those who work for consumer goods/durables companies ($56,282).
The largest percentage of respondents work at wholesaler/distributor companies (10%) or at material handling equipment companies (10%), with transportation/warehousing companies coming in third (9%).
It should come as no surprise that corporate/executive managers have the highest salaries ($105,717), considering that these people are typically the highest paid people at their companies. This is also the largest group within our respondent base, representing 17% of all job titles in the survey. The second-highest paid group are the supply chain managers ($104,000), followed by consultants ($94,900) and senior/executive VPs ($94,120).
Generally speaking, the longer you’ve worked at your job and in your industry, the more you’re being paid. Those who have 26-plus years of experience have the highest salaries ($91,065); what’s more, fully one-third of all respondents fall into that category, illustrating if nothing else that material handling and logistics is a mature field. Experience matters a great deal when it comes to salaries; the older you are, the more you tend to be earning. Sixty-one percent of all material handling and logistics managers are at least 50 years old.
Weathering the Economic Storm
“It’s very tough right now to advance in the current economy. Things should turn around soon, we all hope!” — senior/executive VP with a high-tech manufacturer with 3-5 years of experience, living in the South Atlantic region and earning $60,000
“The ‘decreasing revenues’ budget is not as critical to employee salaries as being asked to do more with less, and the executive management not recognizing the worth of employees.” — engineering manager with a public works company with 16-20 years of experience, living in the Mountain region and earning $85,000
“Company has stated we will be getting raises this year after two years with no reviews and a temporary pay cut for a year. We lost 401K match and educational reimbursement while the top management revalued their stock options down to the new lower stock option price. When the economy picks up, the departure rate will too.” — purchasing/sourcing manager with a consumer goods manufacturer with 16-20 years of experience, living in New England and earning $84,000
“Compensation is made up with salary and up to 40% bonus; no bonus for three years so in effect a big pay reduction. Earned less in 2010 than 2003 due to no bonus payments. The industry is nowhere near recovering from the recession. I wish the government could see this.” — transportation manager with a material handling equipment manufacturer with 21-25 years of experience, living in the South Atlantic region and earning $104,000
We asked respondents to identify the biggest challenge they face in their industry, and the number one answer was “the economy,” or a variation on that theme (e.g., costs, expenses, “doing more with less,” finding new business, etc.). While the situation may not be as dire as it was during the depths of the recession, it’s clear that for many material handling and logistics managers, economic matters are still top-of-mind issues.
And that ties in to the responses we received to the question, “What matters most to you about your job?” Although “salary” was of course a popular choice (15% of the responses), by far the dominant answer was “job stability” (32%). It really isn’t all about the money for these managers. The third-most popular response was “recognition of your importance to your company.”
A year ago, we reported that 56% of all respondents said their salaries had not changed over the previous year, and this year that percentage dropped to 45%, which is encouraging. In the 2010 survey, 26% said they had received a raise in 2009, and in this year’s survey that number jumped to 42%, another good sign that the doldrums seem to be behind us. Still, 13% said their salaries decreased in 2010, although that’s better than the 18% response we saw in the previous salary survey.
The number of managers who say they are satisfied with material handling and logistics as a career path dropped somewhat over the past year, from 78% in 2010 to 70% in 2011. On the other hand, the percentage of those who say they are satisfied with their current job did not change over the past year, holding steady at 69%.
Half of all respondents (50%) say their companies reduced staff over the past year. The good news, according to Dan Charney, managing partner with Solon, Ohio-based Direct Recruiters Inc., is that the bleeding seems to have finally stopped.
“Since early Fall 2010, my team and I have been experiencing a hiring uptick in material handling and logistics disciplines, especially for business development professionals and engineers and programmers,” Charney says. That’s good news for those currently seeking opportunities, and even better news for the industry as a whole. When you consider that only 9% of survey respondents are under the age of 40, it’s obvious that the material handling and logistics industry needs to recruit and develop a new generation of managers to keep the field dynamic and evolving.
“As companies begin to add staff again,” Charney notes, “I advise them to look for top talent who can satisfy today’s needs as well as tomorrow’s vision.”