Given the overall state of the economy in 2009, and particularly the effects of the recession on manufacturing and warehousing operations, you might be somewhat amazed by this statistic: Nearly four out of five (78%) material handling and logistics managers say they are satisfied with their choice of career. But then again, those of you reading this article may not be amazed at all since you're quite familiar with the highs and lows of the material handling world, and most of you have been active in the industry for the long haul.
In fact, based on the results of the MHM 2010 Salary Survey, we can tell you what the typical material handling manager looks like: he's a white male, between 50-59 years old, has worked in the material handling and logistics industry for at least 26 years, lives in the North Central region of the United States (i.e., the Midwest), has been with his current company for 6-10 years, has a bachelor's degree, works for a wholesaler/distributor, and earns $80,084.
Charts and Tables - The data behind the 2010 MHM Salary Survey
MHM’s 2010 Salary Survey Comments - Material handling managers see a light at the end of the tunnel, but for some it’s a long tunnel.
Salary Survey main page - Get all of your Salary Survey information here
That's the composite portrait, anyway, of the average material handler, but of course, there's nothing “average” about the material handling industry nor the people who devote their careers to it. Throughout this special report, you'll hear from many of these individuals in their own words, as they relate their challenges, frustrations and accomplishments.
“Our company is lucky to be financially strong and growing in a down economy. We continue to need good employees and seek them out, train them and provide decent salaries and benefits. This has been a rewarding career and an exciting time to be in material management.” - operations manager in the paper/printing/publishing industry with 26-plus years of experience, living in New England and earning $100,000
“Our company has become very top heavy and they have lost their way concerning the everyday working individual. It's all about how hard they work at the top and how big a bonus they need to pay to supposedly keep people.” - maintenance manager with a wholesaler/distributor with 21-25 years of experience, living in New England and earning $65,000
“Anything that happens today either nationally or internationally can make or break you in a short period of time. There was a time when meaningful relationships were built with ethical and moral bonds that produced trust and loyalty in business-related operations. A man's word used to be the only bond necessary. If there is no bond, you haven't really got anything dependable to lean on.” - corporate/executive manager in the metals/metal products industry with 26-plus years of experience, living in the North Central region and earning $26,000
“In economic times like this, I see two basic types of companies. The first type is a company looking to take advantage of the economy and to automate as much as possible while your budget has more purchasing power. When the environment changes you are in the best position to take a lead position in your industry. The other approach is to freeze all expenses, cut costs by eliminating whatever you can and hold your breath, hoping things will take care of themselves. How many companies do you think make the correct choice for the reasons that are best for the company?” - operations manager with a wholesaler/distributor with 26-plus years of experience, living in the Middle Atlantic region and earning $75,000
“Economic times have put a stop to salary increases, bonuses, hiring, travelling freezes, etc. Difficult time right now in the industry. Profits are down and expenses are all up.” - general manager in the transportation/warehousing industry with 26-plus years of experience, living in the Mountain region and earning $105,000
“The current state of the economy has certainly had an effect on our company's bottom line. Raises and bonuses have been frozen since fall of 2008. There will be projected increases in 2010, but my main concern is to contribute effectively so my company is strong enough to survive this current economic downturn. I want them to succeed! Any monetary gains will come if everyone pulls together and focuses on our overall success.” - operations manager in the retail trade industry with 26-plus years of experience, living in the Middle Atlantic region and earning $102,500
From Coast to Coast
“Hope I'm not the last manufacturer left in Colorado.” - corporate/executive manager at a packaging equipment manufacturer with 26-plus years of experience, living in the Mountain region and earning $70,000
“I am personally in a good situation. I brought a broad area of experience with me to this company. They have tapped into my various skills. Material handling and distribution are benefitting annually from advances in technology. Finding staff capable of initiating new systems for improved efficiencies is difficult. We are located in a rural area and are limited by this in some ways.” - operations manager in the paper/printing/publishing industry with 26-plus years of experience, living in New England and earning $101,000
Nearly a third (32%) of all U.S. material handling professionals live and work in the North Central region of the country, and perhaps not surprisingly, this large group has the lowest average salary of all the regions, coming in a shade under $70,000 ($69,913). Adding insult to injury, as if living in the Rust Belt and shivering through the interminable winters aren't bad enough, these hardy managers must also deal with the fact that their counterparts in the sunnier climes of the South Central region are earning, on average, $25,000 more ($95,435).
Managers on the West Coast, too, are doing well in comparison, earning $87,596. However, at the far eastern fringe of the Rust Belt, namely the Middle Atlantic region, salaries are higher than anywhere but the South Central region, coming in at $90,051. However, given the much higher cost of living in those states, particularly New York and New Jersey, the apparent disparity in salaries between the North Central and Middle Atlantic regions might not be as significant as it seems.
“The major challenge is working with our younger generation of workers, which tend to have a poor work ethic and no sense of accountability for what they do.” - safety coordinator/maintenance manager in the transportation/warehousing industry with 26-plus years of experience, living in the Pacific region and earning $35,000
“Companies are looking for cheaper people, especially those with a work visa who are willing to work for less money.” - operations manager with a 3PL with 6-10 years of experience, living in the Middle Atlantic region and earning $140,000
“I took a 10% cut in pay and lost my 10% bonus due to the economy, and because I am 63, I probably will never get paid as much as I have in the past, but my medical insurance costs and income taxes and real estate taxes keep going up. I will probably work until I am 70. Was planning on retiring at 62.” - corporate/executive manager in the transportation/warehousing industry with 26-plus years of experience, living in the North Central region and earning $85,000
With great responsibility comes greater paychecks, as the saying might go if it was applied to material handling management. As you would expect, the more experienced professionals earn the most money, and indeed, fully one-third of all survey respondents have spent at least 26 years in the industry. This seasoned group earns an average income of $92,375.
Indeed, there doesn't appear to be an ageism problem in the material handling and logistics field, unless it's in reverse — only 2% of all managers are in their 20s, and earn $55,456 as a group. Meanwhile, those 60 and over earn $87,602. Education also plays into the salary scale, as those with a bachelor's degree (27%) and those who have pursued or obtained a post-graduate degree (24%) earn substantially more than those who have not.
Nine out of every 10 material handling managers are white, although managers of Asian heritage, representing 2% of the total, have the highest average salary ($124,429). Native Americans (1%), African Americans (2%) and Hispanics (3%) all earn average salaries that are less than their white counterparts.
Similarly, women (13%) make up another minority among material handling managers, and their salaries aren't even close to that of male managers (87%): Men earn $83,553 compared to the $58,316 earned by women. Material handling is still very much a man's world.
The Nature of the Job
“The retail trade is known for extremely low salaries except at the top. Also, there is little recognition except at the top for accomplishments.” - maintenance manager in the retail trade industry with 16-20 years of experience, living in New England and earning $65,000
“The garment industry is very unstable with the present economy. This makes managing in any environment a tough task and one without reward. Labor is hard to find because unemployment benefits are easy to receive. Until our government helps with this situation, we are going to continue to die on the vine.” - distribution/warehouse manager in the apparel/textile industry with 15-20 years of experience, living in the South Central region and earning $103,000
“The industry is down 45% more than any time in recent history; that makes it a non-attractive industry to be in this economy. Food, drugs and medical equipment are much better.” - senior/executive VP in the industrial machinery industry with 26-plus years of experience, living in the North Central region and earning $110,000
“For consumer products manufacturers, security in a company is at an all-time low, and the prospects of finding that next career are even lower. It is a scary time for all.” - distribution/warehouse manager in the consumer goods industry with 16-20 years of experience, living in the Mountain region and earning $135,000
“Often concerned that our industry feels the effects of a shrinking economy last and is last to recover.” - purchasing/sourcing manager in the aerospace & defense industry with 21-25 years of experience, living in the South Atlantic region and earning $63,000
“Working for a retailer, based on both current and long term conditions, is a concern. We do an outstanding job of controlling costs and provide excellent service, but are often treated as a secondary part of the process because we are not either a buyer or store employee.” - operations manager in the retail trade industry with 26-plus years of experience, living in the Middle Atlantic region and earning $102,500
“I shifted from engineering to sales, so my base salary dropped about 25%. Then company-wide salary reduction of 5%. So, I am way down but now can earn commissions.” - sales manager in the industrial machinery industry with 21-25 years of experience, living in the North Central region and earning $78,000
We've been speaking generically of “material handling managers,” but in actuality of course there's no single job description that would adequately summarize what tasks and processes these managers are responsible for. For the purposes of this survey, we looked at 16 different job titles in 19 different vertical sectors with the aim of discovering which sectors employ the most managers, as well as which sectors pay the highest salaries.
The top three industries in terms of overall percentages of material handling managers are wholesale/distribution (13%), transportation and warehousing (10%), and industrial machinery (10%), which, as a whole, make up fully one-third of all industry sectors. In terms of salaries, these three industries come in pretty close to the national average of $80,084 — wholesale/distribution pays on average $78,204, transportation and warehousing pays $81,983, and industrial machinery pays $80,035.
Those in the consulting/education field earn the highest salaries ($100,438), which is somewhat ironic since they're the only group that doesn't actually handle any materials. Among the industrial verticals, the most lucrative careers are in plastics and rubber products ($97,912), retail trade ($93,064) and 3PLs ($89,000).
In terms of job titles, senior/executive vice presidents lead the way with an average salary of $122,674, followed by engineering managers ($101,667) and then corporate/executive managers with $99,478. On first glance, that seems counter-intuitive since it suggests that the bosses are making less money than their direct reports, but based on some of the comments, it appears that some company owners, presidents and other chief executives have been taking reduced salaries in hopes of riding out the recession without having to gut their staffs. In any event, other titles earning at least $10,000 more than the industry average include consultants ($98,126) and purchasing/sourcing managers ($90,643).
The most frequently cited job title in the survey was distribution/warehouse/logistics manager (24%), and this occupation earned an average salary of $72,408.
It's the Economy, Stupid
“Material handling is a mature market, with not a lot of new business.” - corporate/executive manager with a wholesaler/distributor with 26-plus years of experience, living in the Mountain region and earning $36,000
“Our current facility is still stuck in the 1970s, and we have not had any new conveyor updates in 30-some years.” - maintenance manager with a wholesaler/distributor with 16-20 years of experience, living in the North Central region and earning $37,000
“Although my salary is below the average for a distribution manager in my area, I am fortunate to work for a company that cares about its employees.” - distribution manager in the retail trade industry with 21-25 years of experience, living in New England and earning $62,000
“I have a BSIE and 5 years of experience but have been laid off after moving cross-country to find work. I am now in grad school for logistics engineering to become competitive.” - former distribution center engineer with 3-5 years of experience, living in the North Central region and currently unemployed
According to the Bureau of Labor Statistics, the warehousing and transportation sector lost 19,000 jobs in January 2010 and 23,000 jobs in December 2009. Clearly, while the national media keeps promising us rosier days ahead, the employment outlook for the logistics industry thus far is, at best, cautionary. At the root of the problem, of course, has been the economy as a whole, with many manufacturers opting to move their production facilities offshore to low-cost countries, which may improve the corporate bottom line but doesn't do much for operations managers who no longer have U.S.-based operations to manage.
It's no surprise, then, that when asked, “What matters most to you about your job?” survey respondents overwhelmingly chose “job stability” as their top answer (34%), with “base salary” finishing a distant second (13%) and “recognition of your importance to company” in third place (10%).
More than half of all respondents (56%) report their salaries are stuck in neutral, having remained the same for the past year. While 26% did report having received a raise in 2009, an alarming 18% told us their salaries decreased last year, with 11% reporting a decrease of more than 5%. We didn't actually ask how many were currently out of work, but it's clear from their comments that quite a few were looking for a job.
Nearly half (48%) say it's been more than five years since their last promotion. Of course, part of the reason for that could be that they've reached the top of the particular career ladder they've been climbing and are quite content with their senior executive position. A dearth of available positions, due to layoffs, could also be responsible for the logjam among material handling managers looking to accelerate their careers; only 10% received a promotion within the past year.
Inevitably, the economy will recover and so will the material handling and logistics industry. Clearly, those in the field are passionate about their jobs and are keenly aware of the essential role they play in managing the $1 trillion spend U.S. companies devote every year to warehousing, distribution, inventory management and transportation. What remains to be seen, though, is what effect the exodus of talent — through layoffs, early retirements or mid-career shifts — from the industry might have in the coming years. What effect will the evolution toward automated facilities, leaner inventories, perfect orders, offshore sourcing and just-in-time deliveries have on the next generation of material handling managers? With only 13% of survey respondents under the age of 40, it's absolutely essential that the U.S. material handling field steps up its pace of encouraging and developing a new generation of decision makers. After all, that's the future of the industry.
The Method to Our Madness
The MHM 2010 Salary Survey was conducted online via e-mailed invitations to subscribers. The survey took place in January 2010. A total of 401 responded to the survey. Respondents were not compensated or offered any prize to participate; the only enticement to respond was the chance to provide candid comments regarding their salaries, occupations and employers. All responses were anonymous.
The Rest of the Story
Go online to www.mhmonline.com/salarysurvey to read more than 350 open-ended comments from respondents about the biggest challenges confronting material handlers, as well as their suggestions as to what can be done to improve the lot of those involved in the material handling and logistics industry.