This year's Salary Survey numbers are in and the news is good, bad and, depending on your employment status, even ugly. The good news? Despite the recession, the average salary reported by logistics professionals nationwide has actually increased significantly from last year's figure, rising to $76,000 from $71,000 in 2001. (See Figure 1.)

The bad news? Managers are working harder for their money than ever. A full 81 percent of respondents indicated that their job responsibilities had increased over the past 12 months. (See Figure 2.) And although the respondents reported that they had received an average annual increase of 6 percent to offset those added responsibilities, that increase failed to measure up to last year's reported increase of 7.1 percent, the highest on record for the LM survey.

And the ugly? Well, there's plenty of evidence that the industry has been hard hit by layoffs. Consider the following: Four fewer people reported to each respondent than did the previous year, a mean of 13 employees, down from 17. (See Figure 3.) Additionally, there was a significant drop in respondents with job titles such as operations manager, warehouse manager and purchasing manager at the same time there was an increase in the number of respondents with titles like vice president and general manager of logistics. (See Figure 4.) This shift suggests that the economic downturn had a significant impact on the more junior members of the workforce and may continue to do so.

With more potential layoffs looming in the months ahead, management must be prepared to assume an even greater role in the company's operations. "We are seeing middle management and above retaining their jobs but being forced to wear more 'hats' than they used to," says Gayle Gorfinkle, president of the executive search firm Gorfinkle & Dane in Braintree, Mass. "One reason we see an increase in salaries in the logistics industry during a recession is that organizations pay particular attention to this aspect of their business when times are tough. Good high-level logistics professionals are tough to come by. As lower-level employees are laid off, higher-level managers are forced to pick up the slack. Salaries are then readjusted in order to retain quality people and not lose them to organizations that may be doing better financially and willing to pay more."

The situation is unlikely to change anytime soon. Until the economy rebounds, it is doubtful that employers will hire back laid-off workers, which means current logistics professionals will continue scrambling to do more with less for the foreseeable future.

To develop our annual insider's look at logistics careers and compensation, Cahners Research tabulated close to 1,000 responses to Logistics Management & Distribution Report' s 18th annual Salary Survey questionnaire (which was bound into our November 2001 issue). About 33 percent had previously participated in our survey, which provides a look at life in the trenches of today's logistics organizations.

For example, of those who responded to our survey, more than 50 percent indicated that the most important function assigned to them was distribution/logistics or traffic/transportation. Of those making over $75,000, the single most important function was distribution/logistics.

As for which titles are associated with the biggest paychecks, the vice presidents/general managers topped the list, earning $122,900, on average. They were followed by corporate/divisional managers ($93,000), supply chain managers ($84,800), logistics managers ($75,600), private-fleet managers ($66,000), operations managers ($64,000), purchasing managers ($58,900), traffic managers ($56,500), assistant traffic managers ($54,600) and warehouse managers ($54,300).

Computer skills are as important as ever. A full 74 percent of logistics professionals indicated that their knowledge of information technology was essential or very important to their jobs. (See Figure 5.) This was most evident at the top levels: 85 percent of vice presidents of logistics and 87 percent of corporate managers said that computer expertise was essential to managing their operations. That will probably come as no surprise to most observers. It is widely accepted that organizations become more reliant on technology to meet demand as staffs are downsized.

It appears that for the time being, readers are hunkering down in their current jobs, hoping to ride out the recession. On average, the logistics professionals responding to this year's survey have remained with their companies for just over 10 years, with 48 percent at their current job between two and five years. Of all the survey respondents, supply chain managers reported the highest job longevity: 58 percent reported that they had been in their current positions for two to five years. Those who had been in their positions for a year or less dropped slightly from 21 percent in 2001 to 19 percent this year, indicating once again that the recession may be dampening hiring activity.

This job longevity was reported across all salary levels. For example, 61 percent of managers making between $45,000 and $50,000 a year have been in their present job for two to five years, up from 55 percent in 2001. Only 16 percent of managers making between $45,000 and $50,000 a year had been in their current positions for a year or less, down from 17 percent in 2001. These data indicate that the job-hopping trend commonplace in 2000 may have come to an end in the current recession.

On another note, the Salary Survey results once again demonstrated that the part of the country you work in affects your paycheck. The geographic area that reported the highest average salaries—ranging from $70,000 to $75,000—was New England, while Chicago reported the highest percentage of managers making $75,000 or more.

Though the economic climate in which logistics managers operate has fluctuated quite a bit in the 18 years we've conducted this survey, some things haven't changed. For example, the LM survey indicates that women continue to be a minority in the logistics profession and, on average, are paid less than their male counterparts.

The average logistics professional is male, 41 to 50 years old and has a college degree. (See Figure 6 for a look at "Joe Average.") He earns, on average, $78,700 a year. His female counterparts of the same age and educational background with equal or greater experience, however, make only $56,500 a year on average. And that pay gap is unlikely to close anytime soon: Men responding to this year's survey reported a 6.1-percent increase in salary last year compared to only a 5.4-percent increase for women. (See Figure 7.)

Men, who made up 87 percent of this year's survey sample, tended to hold the higher titles. Twenty-one percent of male respondents reported having the title logistics manager compared with 18 percent of females. On the other end of the scale, 15 percent of women reported having the title of traffic manager vs. 11 percent of men.

As for industry experience, the women, as a group, lagged behind men a bit. A higher percentage of women than men reported that they had 15 to 19 years of transportation/distribution experience. And the percentages of men and women reporting 20 to 24 years' experience were comparable. However, at the 24 years or more level, the percentage of women dropped off markedly.

As things stand today, more men than women hold high-paying top-level positions. Can women catch up? Only time will tell as women gain more industry experience in the years ahead.

Whether they're men or women, a number of logistics professionals are out of work today. They aren't alone, of course. Thousands of workers across all functions and industries have lost their jobs in the current downturn. And the worst may be yet to come. After a 30-year low jobless rate of 3.9 percent just over a year ago, most analysts have been predicting that the unemployment rate could reach 6.0 or 7.0 percent during 2002.

What does that mean for the logistics professional who is currently out job hunting? "Most of the mid- to high-level logistics people currently unemployed are in that situation because of duplicate positions resulting from corporate mergers," says Alex Metz, president of Hunt Ltd., a search firm headquartered in Lyndhurst, N.J. "Mergers and downsizing are now common practices in this tough new economy. As a result, organizations have become less flexible with their requirements for new hires. Only those with the most education and the greatest amount of experience are considered hot commodities throughout the logistics industry. This is a significant shift from years past when experience alone could get you in the door."

The numbers bear out Metz's contention that education counts in the hiring and compensation game. (See Figure 8.) Of those managers earning $70,000 or above, 77 percent reported having a college degree or better, up from 74 percent last year. Twenty percent of vice presidents had an MBA vs. 8 percent of warehouse managers and 9 percent of purchasing managers. Overall, 67 percent of all respondents reported having a college degree (or a post-graduate degree) regardless of their job title or compensation level.

Of course, experience counts too. Those earning more than $75,000 per year averaged 19.4 years of transportation/distribution experience. Thirty-six percent of those with 25 years of experience or more made $75,000 or more compared with only 7 percent of those with five years' or less experience. The greatest number of respondents had between 15 and 19 years of experience and made $78,000 a year on average.

Taken together, this year's survey results indicate that the economic downturn and the lingering effects of the recession have adversely affected the logistics profession. Executives at the top of the hierarchy are now expected to do more—or at the very least, the same—with much less. And fewer workers seem to be jumping from job to job in an effort to boost their earning power. Although income levels have increased for those who have held onto their jobs, more and more logistics professionals are looking for work as corporate downsizing, mergers and layoffs continue to take their toll.

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 Diane LeGradi at (610) 205-1078.