Unemployment numbers are stubbornly hovering around nine percent, a very high rate over the past 20 years. Still, there is anecdotal evidence that the situation is getting better for supply chain and logistics professionals. My sense of optimism comes from the increase in my e-mail traffic and phone calls regarding employment opportunities. I have fielded more requests for resume packets, candidates (both experienced professionals and new graduates), and interns in the last month than I did in the prior six months. Also, employer participation in our career fairs has doubled this year versus last year.
At the top of my personal indicators of improvement are the positive results of the Logistics Management 27th Annual Salary Survey
. The analysis of 669 survey responses revealed that the average 2011 salary rose 2.2 percent to $90,000 from $88,000 the previous year. That may not sound like much, but it certainly is better than the 2005-2007 period when salaries dropped and then stagnated. Also, 10 percent of the respondents reported receiving a raise of 10 percent or more in the last year. I'm fairly sure that you won't find any university professors in that fortunate group!
Key drivers of high supply chain salaries include factors that make sense. In the Logistics Management data, higher pay is associated with broader responsibilities, larger transportation budgets, and greater education levels. The 10th Annual Survey of the Canadian Logistics Professional
identified a number of factors that affect supply chain salaries and explained the variation in base salary. Top salary influencers were similar to the Logistics Management list, but it was interesting to see hours worked per week in the top three of the Canadian study. Hard work does get rewarded in this profession, as I have long preached to my students.
With the economy improving and opportunities continuing to open up, turnover will once again become a significant challenge in the supply chain profession. In fact, over half the Logistics Management survey participants indicated that they are actively looking for or open to new positions.
As people shift positions, it will be difficult to maintain continuity of supply chain expertise. Salaries will continue to rise, as companies will have to bid higher for new talent or to retain their existing personnel. To find out what it will take to attract talented personnel, use trade magazine data or online tools at www.salary.com
and other career-focused websites.
Of course, as supply chain professionals scream, “Show me the money,” other factors play into their decisions to stay or to pursue external opportunities. Considerations such as cultural fit, working conditions, quality of life, advancement opportunities, and training options affect turnover. To improve the odds of retaining key people, organizations must take a proactive approach toward their development and recognition:
- Provide clear, attainable goals and meet regularly to promote success.
- Empower managers to make decisions and take greater responsibility.
- Build flexibility into operations to provide job enrichment and work/life balance.
- Mentor high-potential managers to prepare them for future roles.
- Develop talented managers through external training, education, and experiences.
These building blocks anchor a supply chain retention program that promotes the professional development and career advancement of essential personnel.
Will it be easy to do this? No—keeping high-potential personnel onboard requires an investment of time, money, and effort. However, the long-run benefits of keeping a staff intact far outweigh the costs of retention initiatives. You avoid the high cost of replacing a manager, which is 1.5 times the departing person's salary and benefits, plus months to get the new manager up to speed. And you limit the negative reputation associated with a high turnover organization.
The time to start is now, before the mass exodus begins. Reward those people who have worked diligently, covered the responsibilities from open positions in addition to their own duties, and haven't gotten many perks over the last few years. An investment in their abilities and a tangible expression of appreciation for their efforts will keep them satisfied and keep your supply chain from breaking down. Open the purse strings now or the costs could be much higher down the road.