Logistics Management's 23rd Annual Salary Survey: Steady as she goes

After a dramatic rise and fall over the last few years, logistics salaries have leveled off—for now, at least.

By Jeff Berman, Senior Editor -- Logistics Management, 3/1/2007

In any industry, employees are looking for growth, especially when it comes to their wages. But for those who spend their waking hours as logistics professionals, income growth appears to have hit a flat calm, according to the results of Logistics Management’s 23rd Annual Salary Survey.

After 10 straight years of growth from 1994 to 2004, the average salary for logistics professionals dipped from $83,790 to $80,000—down 4.5 percent—from 2005 to 2004.

Well, the results are in for 2006, and the news regarding average salaries is… that there is no news: The average salary remained pinned at $80,000.)

Before you get the idea that the industry is in the doldrums because average salaries did not increase, it is worth noting that a year ago logistics and supply chain industry recruiters predicted that annual compensation for logistics professionals might be entering the early stages of a “leveling off” phase. Fast-forward one year and it appears that these specialists were correct, as evidenced by this year’s lack of growth.

Data for this year’s survey is based on feedback from 1,421 respondents. Roughly 23 percent of those respondents also participated in last year’s survey.

While there is a fair amount of turnover in the sampling pool annually, the profile of a typical respondent remains very consistent. This year, the average respondent was a 44-year-old, college-educated male. (The majority of respondents—84 percent—were male, and 93 percent have attended college). On average, the typical respondent has spent 6.4 years with his current employer, down from 7.3 in 2005, and has been in his current position for 4.6 years, up slightly from 4 last year. Average work experience inched down to 15.7 years from 16 in 2005.

There’s not a lot of difference between these metrics and those from a year ago. In fact, the average raise reported by survey respondents was 3.6 percent, just a hair over last year’s average raise of 3.4 percent.

“This data pretty much hits the target with logistics professionals staying [slightly] ahead of the curve in salary increases,” says Jim Rohan, senior partner at JP Canon Associates, a supply chain executive search firm in Manhattan.

Raises appear to be getting somewhat harder to come by: 11 percent of respondents did not receive a raise in the past year, about 8 percent received a raise of 2 percent or less, and another 45 percent saw their compensation rise between 2 percent and 4 percent. Above the average were the 17 percent of respondents who saw a 5 percent to 7 percent bump in pay; the 9 percent earning an extra 8 percent to 10 percent; the 4 percent rewarded with an extra 11 percent to 20 percent; and the lucky 3 percent who received a whopping raise of 20 percent or more.

What your title is typically dictates how much you’re paid. Vice presidents and general managers, who made up 10 percent of survey respondents, earned an average salary of $146,000, which surpassed last year’s average by 4.1 percent. They were followed by corporate and division managers, who comprised 7 percent of all respondents, at $101,250. Logistics managers, who once again represented the largest group in the survey, saw their salaries remain on an even keel at $80,000.

While your title plays a role in what you earn, so does your specific job function. “More and more emphasis is being put on the importance of good people in jobs that involve the process and systems used within the overall supply chain,” says Rohan. “And jobs that involve specific areas, such as warehousing and distribution, appear to be leveling off and working off a more generic skill set.”

That’s clearly evidenced by the fact that respondents who said that supply chain management was their main job function took home an average salary of $102,385, a 2.4 percent improvement from last year’s $100,000. Those whose duties center on distribution and logistics took a 9 percent year-over-year loss, from $89,300 last year to $81,250 this year. Average salaries for more narrowly-defined, operations-oriented job functions like materials handling, fleet operations, inventory control, and traffic/transportation ranged from $52,000 to $74,000.

Along with the title on your business card and your main functional area, the type of education and the amount of experience you have significantly influence your annual bottom line.

Respondents with only a high school diploma made an average of $61,000—not bad, considering that it trumped last year’s $55,000 by 11 percent. Respondents with some college experience earned an average of $67,000. Those who earned a bachelor’s degree averaged $80,000, a 5.9 percent drop from last year’s $85,000. Like last year, MBAs did the best with $100,000, although that was 5 percent less than last year’s $105,000.

A new question added to the survey regarding respondents’ level of supply chain- and logistics-specific education made a major impression on this year’s results. Respondents with an undergraduate degree in logistics or supply chain management earned an average salary of $79,635, essentially the same as the average for all survey takers with an undergraduate degree. But respondents with a graduate degree in logistics or supply chain management earned an impressive $95,560 on average. And having a professional certification—such as those conferred by AST&L or APICS—resulted in an average salary of $93,250.

“Having those types of degrees really helps, and more companies are making it a point to find and hire people with logistics- and supply chain-specific educational backgrounds,” says Robert McInturff, president of McInturff & Associates, a Natick, Mass., executive placement firm specializing in supply chain and logistics.

On the experience side, it stands to reason that the longer you have been doing a job, the better you will be compensated. Respondents who have between 1 and 10 years of experience earned an average salary of $62,400, and those with 11 to 15 years of experience took in $81,000. Above that level of longevity, salary differences evened out somewhat: Those with 16 to 20 years of experience averaged $90,000. Respondents with 21 to 25 years and 26 to 30 years of experience earned $87,500 and $95,000, respectively.

With more than 80 percent of the survey’s respondents being male, it was no surprise that they led the way in annual pay. Male respondents averaged $81,885, while women came in at $60,500. The $21,385 difference in pay between the genders was a mere $615 less than last year’s $22,000 gap. The average male respondent had 16.1 years of work experience, compared to 13.3 years for women. Male respondents also had more direct reports (8.7 versus 5.8) and out-earned women in many title categories.

They say you have to spend money to make money, and that has proved to be true for survey respondents just about every year. Those who work for companies with annual transportation budgets of $101 million or more reported an average salary of $102,208. On the other end of the scale, respondents working for companies that spend less than $500,000 annually on transportation earned $65,000 on average.

Paychecks vary markedly depending on which industry you work in. Logistics consulting paid best, with average wages of $96,500. This segment reached the threshold for inclusion for the first time this year; one possible explanation for the number of consultants among the respondents is that many downsized or retired logistics and supply chain professionals have set themselves up in the consulting business.

A wide range of manufacturing and service industries filled out the top ten. The chemical industry was next at $89,000, followed by computers/electronics at $88,250. But it wasn’t all high-tech and high-value: Food and beverage and primary metals were in fourth and fifth place, respectively.

It’s not just who you are or what your company does that directly affect your salary, though. Where your company is located often plays a role in how much you make. The New England region had another solid year with an average salary of $85,000, although that was down from last year’s $87,000. The West South Central states matched New England at $85,000, exceeding last year’s average earnings of $76,410. The Mid-Atlantic region was next, reporting an average salary of $82,000. The Pacific and East South Central regions tied for third place at $80,000. The Mountain, South Atlantic, East North Central, and West North Central rounded out the pack, ranging between $75,000 and $78,500.

One interesting statistic that came out of this year’s data was that the logistics field is likely to be fertile ground for younger job hunters. Although the average age of logistics professionals—44.1—was 2.3 years younger than last year, the case for more younger people in the profession is still a valid one. Only 14 percent of survey respondents were between 26 and 34 years of age, while 68 percent were between 38 and 54.

“It is no secret that younger people are needed in this space,” says Alex Metz, principal of Metz Associates, an executive search firm in Boynton Beach, Fla. “Companies need to get younger people in the door earlier and train them. They are computer-savvy and smart and need an opportunity to prove themselves.”

Even though logistics salaries remained flat year-over-year, the overall health of the market appears to be on a solid footing, and that should continue to make the logistics profession attractive for young and old. As companies continue to outsource and seek productivity and cost improvements, the demand for quality people—and subsequently for solid salaries—is likely to increase in the coming years.