Inside Logistics

Learning Curve: What are you worth?

A look at what’s affecting salaries in 2012


October 31, 2011
by Tracy Clayson

MM&D MAGAZINE, SEPTEMBER/OCTOBER 2011 PRINT EDITION: As we approach this fiscal year’s fourth quarter and tackle budget projections for next year, results from 2011 will likely dictate the direction of employment numbers, wages, purchasing patterns and stock values. While Canada boasts stronger labour market numbers than the US and other countries, there is evidence the business world still isn’t hitting the prosperity targets it’s aiming for. Given the lagging global recovery, career opportunities and salary increases for supply chain professionals may be limited.

The 2010 MM&D salary survey showed 37 percent of respondents experienced no salary increase, while 10 percent actually took a decrease. The remaining 53 percent of respondents may have also been part of the 67 percent of those who reported lack of satisfaction with their salaries. No matter how many jobs have been lost to the weak economy of the past few years, supply chain professionals who hold designations earn more than those without qualifications, and probably stand a better chance of keeping those jobs.

Job competition might rise given increased interest from those trying to find work in Canada. Recent news reports highlight the trend of US residents looking north for jobs, a shift from when Canadians sought better income and options in the US. Between 2008 and 2011, applications for temporary work permits by US citizens more than doubled.

Job shortage and skill shortage

While many Canadian firms are still feeling the recession, it’s not surprising the truck driver shortage continues to be a challenge for carriers, private fleets and the shippers that rely on them. Leading transportation service providers have had to do more outreach and use more outsourced labour. Perhaps the market slowdown, increased Customs enforcement and chronically low wages have flushed out a large portion of the driver population. New Canadians have been entering the trucking industry and picking up positions from those retiring or making career changes.

It’s good news that the demand for materials handling equipment has seen a 17-percent jump, according to the Material Handling Institute of America. The demand for transport trucks and trailers has also increased. With equipment procurement on the rise and with an increasing backlog, capacity limits are adding pressure to distribution and transportation to meet output expectations.

Companies are looking for ways to stay lean, and added costs of overtime, equipment rental and cartage or expedite service have affected financial performance goals. Truck manufacturers report a major rebound in demand, citing the backlog of orders at a four-year high. There’s also a projected 300,000 trucks due for production—up from 200,000 in 2010.

Many carriers are struggling to keep their fleets rolling, their drivers retained and, most important, their bottom lines in the black. Growth by acquisition has been vital for many Canadian firms such as Transforce, Con-Trans and Mullens. With smaller operators being bought up and other privately owned carriers liquidating, the trucking industry should see rates climb as the ratio of carriers-to-shippers drops.

Not clear sailing, yet

Many mid- and upper-management roles have been eliminated and in terms of salary expectations for 2012, it appears more companies are struggling to justify increases. There are early signs of the things picking up and some industries are thriving, such as oil production, healthcare, mining and renewable energy. But the retail, grocery and automotive sectors still struggle to regain stronger sales and profits.

Those entering supply chain professions or thinking about their next career move might consider industries that are surviving and show promise of stability. It’s difficult to tackle salary negotiations when your employer is forced to make major changes like downsizing. Job retention alone might be an acceptable goal for supply chain professionals. No matter what your level—executive, management, supervisor or support staff—keeping your skills sharp, being flexible and adaptable and making sound decisions will help in the long run.

If you’re not in a position to negotiate a salary increase with your current employer there may be other benefits that are available and worth exploring. Alternatives to pay increases might include extra vacation time, flexible work hours, telecommuting or the use of a mobile office. Also potentially on the table are goodies like tuition coverage for professional development, specialized training, performance bonuses, executive retreats and additional coverage in health or pension plans.

Using salary survey information is a great tool to help justify suggested increases for those who work for you. Most companies have a framework for salary levels, but the use of industry information on market value for supply chain positions is a valuable tool to stay competitive.

Top talent is critical for all companies. The price point for a keen-minded, solution-focused critical thinker is always up for discussion, regardless of economic climate.

Tracy Clayson (tracy@in-transit.com) is managing partner, business development, of Mississauga, Ontario-based In Transit Personnel.