Low unemployment has led to big jumps in earnings this year.

By Staff -- Logistics Management, 4/1/2000

As a result of the nation's long-running economic expansion, the average annual wage in our salary survey reached $68,700 this year compared with $66,600 last year. (See Figure 1.) Survey respondents reported that they received a 6.4-percent salary increase on average, although a comparison of last year's average salary with this year's showed only a 3.1-percent hike (most likely owing to variations in the survey samples). Indeed, 32.0 percent of the survey respondents saw pay hikes of between 3.1 and 5.0 percent last year, while another 21.0 percent of those surveyed reported raises of between 5.0 and 10.0 percent.

But the revved-up economy isn't the only factor driving up pay. Our survey indicated that job hoppers were being rewarded with higher salaries, while veterans found that their loyalty was going largely ignored. Individuals who had worked for a company for less than two years were making more money than those with three to 14 years of service and even those with 20 to 24 years of service. It's no surprise, then, that almost 60.0 percent of the survey participants said they had spent less than 10 years with their present employer.

The Song Remains the Same

For this year's wage survey, Cahners Research collected responses from 1,118 readers to our annual questionnaire on compensation and careers. Almost one-third of those respondents took part in our survey last year. Yet despite the influx of first-time survey respondents, the study's results remained quite consistent with those of past editions.

For example, the profile of our average survey participant has stayed remarkably similar over the years. The typical respondent is still a man in his mid-40s with a college degree. As in the past, men represented the majority of survey respondents-85 percent. Further, the average respondent had 16 years of industry experience and had logged six years in his current job-the same as in last year's profile. (See Figure 2.) Some 64.0 percent held a college degree. In addition, 76.0 percent said knowledge of computers was essential or very important to their job performance. Participants also reported that they were working harder than before. Some 82.0 percent said that they performed more functions today than they did two to three years ago.

When asked about their titles, 10.5 percent described themselves as vice presidents or general managers. Another 9.0 percent said they were corporate or divisional managers. Logistics managers made up the largest segment, with 21.0 percent. Traffic managers accounted for another 20.0 percent of the professional titles, and warehousing managers and supervisors another 13.0 percent of the survey audience. Other titles cited in the survey included purchasing manager, operations manager, private-fleet manager, and assistant traffic manager.

Management of transportation operations remained the single most important function for survey respondents. Some 33.0 percent said that overseeing transportation was their chief duty. Another 30.0 percent cited distribution and logistics as their single most important job function. Other top functions cited included purchasing (9.0 percent), warehousing (9.0 percent), and import and export operations (8.0 percent).

Although readers from a variety of industries filled out questionnaires, the highest percentage of the participants came from transportation services. Some 16.0 percent said they worked in transportation. Another 12.0 percent of respondents said that they worked in either the food and beverage industry or in the chemicals industry. The wholesale trade-durable goods and electrical and electronic equipment industries also were cited by 12.0 percent of the survey respondents.

Although reader responses came from all over the country, the majority of questionnaires-25.0 percent-came from the East North Central region of the United States, which encompasses Ohio, Indiana, Illinois, Michigan, and Wisconsin. Some 14.0 percent of our survey participants came from two other regions: the Mid-Atlantic states and the Southern Atlantic region.

Some Gains, Some Slippage

In general, the continued robust economy and tight labor market pushed up salaries in this year's survey. For instance, vice presidents and general managers reported an average salary including bonuses and commissions of $114,400 as opposed to $109,800 last year-a 4.0-percent increase. Corporate division managers reported an average salary of $96,200 this year vs. $84,200 last year-a 14.0-percent hike and the largest single increase seen for a title this year. (See Figure 3.)

But other titles lost a little ground in terms of compensation. Warehouse managers earned $50,800 this year as opposed to $54,000 last year. Private-fleet managers also dropped in wages, to $56,100 this year from $58,900 last year. Assistant traffic managers also suffered income erosion, going to $47,900 from $49,600 last year.

When asked about their annual wage increases, general managers and vice presidents told us that their average pay raise totaled 7.4 percent on average. Corporate and division managers said their annual wage hike last year amounted to 6.9 percent, while logistics managers received 7.3 percent. By comparison, assistant traffic managers reported they received a lesser 5.4 percent on average. But that wasn't the lowest in our survey. Fleet managers told us that they obtained only a 4.0-percent pay raise on average.

The Top Dog Gets the Most Bones

As might be expected, the highest-paid individuals were the ones with the top titles. For example, 60.0 percent of vice presidents and general managers reported that they made between $100,000 and $299,000 this past year. On the other hand, only 39.0 percent of corporate or divisional managers and 15.0 percent of logistics managers said their wages reached the six-figure income bracket.

The number of managers in the 100K club continues to grow. Some 16.0 percent of those surveyed had incomes exceeding $100,000 this year. Last year, only 13.0 percent of the survey respondents indicated they received six-figure salaries.

Job function plays a decisive role in who gets the big bucks. (See Figure 4.) Some 35.0 percent of individuals overseeing the corporate supply chain earned more than $100,000. By contrast, only 25.0 percent of those involved with distribution earned six-figure incomes, as did 11.0 percent of those managing transportation or warehousing.

Experience also counts when it comes to earning power. Nearly 30 percent of those surveyed who had 30 years'or more experience in the field said they earned between $100,000 and $299,000. Twenty-one percent of those with 20 to 29 years of experience also attained the top income bracket.

The top earners also work for big companies, hold college diplomas, and have gray hair. Some 29.0 percent of those working for companies spending $20 million or more on freight annually broke into the six-figure income bracket. And 31.0 percent of those with an MBA degree reported making more than $100,000. Finally, 26.0 percent of those aged 51 or over placed in the six-figure income bracket. Only 1.3 percent of those aged 30 or less said they earned $100,000 a year.

The College Payoff

Education level, professional experience, and company size all influence a manager's level of compensation. Take education, for starters. Individuals who have only completed high school earned $52,000 a year on average. Compare that with the average salary of workers with a college degree. Those individuals reported an average compensation of $70,300, including bonus and commissions. MBAs were paid $89,100 on average, while those with other types of graduate degrees earned $73,900. (See Figure 5.)

The more experience in the field, the more a person tends to earn. Our survey found that individuals with five years'or less experience grossed $56,000. Managers with 15 to 19 years on the job received $69,000 on average, while those with 20 to 24 years made $71,000. Finally, individuals with 30 or more years of distribution expertise were paid $84,000 annually. (See Figure 6.)

Big companies also tend to hand out heftier paychecks. A logistics manager working for a company that spent $500,000 to $1 million on freight annually earned $57,100 on average. But an executive at a company spending $1 million to $6 million on transportation reported an average salary of $65,900. An individual at a company spending $20 million or more on freight annually made $85,800 on average last year.

The bigger the staff supervised, the bigger the paycheck as well. Individuals with 10 or fewer subordinates received annual compensation of $67,200 vs. $72,600 for those with 11 or more direct reports. In fact, managers with more than 25 subordinates netted an average salary of $80,000.

If a manager is looking to work in a high-paying industry, then he or she should consider public warehousing. Managers in that industry earned more than in any other, garnering $86,000 a year on average. Indeed, one-quarter of those who responded to our survey who worked in public warehousing reported that they earned salaries of between $100,000 and $300,000 last year. The wholesale trade-nondurable goods sector also rewarded logistics executives well, paying them $79,000 on average. Transportation services paid $77,000 on average. (See Figure 7.)

Low-paying industries included machinery, fabricated metal products, and instruments. The latter paid the lowest of all sectors surveyed, $54,000 a year on average. Executives in fabricated metal products and in the machinery industries made $56,000.

If an executive is looking to relocate to a top-paying locale, then he or she should move to New York state, according to our survey. The highest-paying metro location was Rochester, N.Y., with individuals there reporting an average salary of $96,000. The number two location was New York City, with an average reported salary of $92,000. The metro location with the lowest average salary in our survey, by the way, was Norfolk, Va.

The Gaping Gender Gap

As has held true in previous surveys, men still outpaced women in terms of salary. Male logistics managers earned an average wage of $71,100, while their female counterparts only received $51,300. In fact, 32.0 percent of the male survey respondents said they made more than $75,000 last year, while only 11.0 percent of the women in our survey reached that income level. One small positive note for women this year was the amount of salary increase reported. Women reported that they received a 6.5-percent wage hike on average vs. 6.4 percent for men. (See Figure 8.)

It should be noted that other factors helped account for the gender gap in pay and indicated why men still brought home bigger paychecks than women did. The men who responded to our survey had 17.3 years of distribution experience vs. 13.1 years for women. In fact, 13.0 percent of the male respondents had spent 30 years or more in the field, while only 1.3 percent of the women in the survey matched that experience level.

Men also supervised departments of 13 workers, while women only oversaw seven-member staffs on average. Some 11.5 percent of men surveyed held the title of vice president and general manager compared with 2.6 percent of women. Finally, men in the field reported higher levels of education than their female colleagues did. Some 13.6 percent of men said they had MBAs, compared with 10.4 percent of women. Some 46.0 percent of men also had a college degree compared with only 34.0 percent of women.

No Reward for Loyalty

The survey once again demonstrated that job mobility could boost one's salary. Last year, the survey found for the first time that individuals with only one year of service at a company made more money than those with 10 years' experience. Although first viewed as an anomaly, those data jibe with recent reports from executive recruiters who report high salaries for those switching jobs. Indeed, our salary research noted that job-hoppers in the current hot labor market could earn more than anyone except the real long-term veterans.

The survey found that individuals who had been with the company two years or less earned $72,000 on average. That was $8,000 higher than the compensation reported by those who had spent three to five years working for the same company, who received $64,000 on average. That topped the salaries reported by those in the six- to 10-year bracket, who made $66,000 on average; those in the 11- to 14-year bracket, who grossed $63,000; and even those with 20 to 24 years' experience, who reported an average income of $71,000. (See Figure 9.)

The impact of job mobility also was apparent from the correlation between salary and years in the present job. Individuals who had spent less than one year in their current jobs reported making $67,000-more than those who had spent 11 to 14 years in the same position. In fact, those individuals who had spent between two and five years in their present jobs earned $70,000 on average-more than those with six to 19 years in the same job as well as those who had spent 25 to 29 years in the same post. Only those who had spent 30 or more years in their present jobs outearned them. (See Figure 10.)

Still Flying High

In short, this year's survey results are in, and those executives at the top of the logistics hierarchy and those who jump from company to company continue to outpace others in the profession where earnings are concerned. If the economy remains strong, as expected, the job-hopping trend will likely continue well into this year, boosting income levels for logistics pros and providing an auspicious setting for the wage game in the decade to come.

Editor's Note: The information appearing in this article represents only a small portion of the data tabulated for this report. Customized reports are available for a small fee. For information, call (617) 558-4473.