The View with Lou: Wallet woes

by Lou Smyrlis
Lou Smyrlis is managing director,
Newcom Media Trucking & Supply Chain Group

Much has changed in the two decades since we launched our annual Survey of the Canadian Logistics Professional to better understand the trends driving the profession. Looking back, as we’ve done with this issue of our magazine, I wish I could say the data point to an all-around positive picture. But I would be lying, seeing what I wanted to see, instead of the stark reality actually in front of me.

At the dawn of this annual survey I was a young(ish) editor just starting to learn about the profession of logistics. I quickly became fascinated with how much responsibility logistics professionals actually held and how many different hats they wore – from managing warehousing and transportation to dealing with different customs regimes, currencies and laws as their jobs became increasingly global in nature. And they did this while having to master increasingly complex technologies.

The word supply chain was just starting to come into use to better describe the totality of their responsibilities and importance to their companies. And yet in those early days they were still flying under the radar – unheralded masters of multi-tasking while other company disciplines such as sales, marketing and IT soaked up most of the attention and seats in the boardroom along with the fatter paycheques.

Importance of supply chain

By the mid 2000s groundbreaking research, some of it conducted by Canadians, started to reveal just how important supply chain was to company growth. This called for an elevation of the supply chain manager in the company org chart, I thought, along with a seat in the boardroom and certainly a bigger paycheque. Soon many leading companies started to think likewise and we started to see an elevation of the profession as we entered what I would consider its golden days.

Click here to read more from the February 2021 print edition of Inside Logistics.

Between 2000 and the start of the Great Recession in 2008 it was common to see three quarters of supply chain professionals reporting they received a salary increase. And those increases were sizeable with a quarter or less reporting increases below two percent.

Since then it’s much more common to see just 60 percent of our survey respondents report an increase in their salary over the past year and the increases are consistently meager, with about a third reporting increases of two percent or less. By our last survey only half of our respondents felt their salary level had kept pace with their responsibilities over the past five years.

This is no way to treat a profession that any CEO would have to acknowledge is critical to the success of their company. So why is it happening? What has changed over the past decade that is causing us to backtrack on the gains made?

A fundamental change I believe has made a significant impact is the almost singular focus by many companies since the Great Recession of 2008 on cost control. More than ten years after emerging from that recession many companies remained in cost control mode – long enough to bridge the gap to the recession in 2020.

Demographic shift

There is also a demographic shift happening, with the Baby Boomers who brought the profession to its heights retiring and millennials entering at the lower end of the pay scale.

I also wonder sometimes if supply chain professionals aren’t too good for their own good. Until Covid lockdowns came along, when is the last time you went to buy a loaf of bread or pretty much anything else and you couldn’t find it on the shelf? Despite the increasingly global and complex nature of supply chains they’ve become so reliable they’ve practically become invisible. Out of sight becomes out of mind.

But what comes around, goes around. The retirement of Baby Boomers along with their higher salaries may have saved companies money but it’s also making for a tight talent pool that will get tighter in the years ahead. That will force a return to better pay practices.

And what we’ve all witnessed of late – the desperate need for PPE last year, the goods shortages induced by Covid lockdowns, and our need for an efficient vaccination system this year to get our societies back to normal, have been stern reminders of the importance of smoothly functioning supply chains and the people entrusted with running them.