Logistics and Materials Management Employees

   A new survey published last week reveals data on the compensation practices for employers in the logistics and materials management industry.

   Compensation Increases
   The Watson Wyatt Data Services survey found that in organizations providing data in both the 2007/2008 and 2008/2009 surveys, salaries and total cash compensation increased overall. The average increase to salary was 3.3% while the average increase to total cash compensation was 3.5%.

   The survey found that the average increases to salaries varied by one percentage point across all industry sectors. The banking and finance sector had the highest average increases to salaries at 3.9% and the highest increases to total cash compensation at 4.4%. The durable goods manufacturing sector had the lowest average increases to salaries at 2.9% and the lowest increases to total cash compensation at 2.9%.

   Regarding average increases to salaries and total cash compensation, there were only slight differences, the survey found. Average increases varied by less than one-half of one percentage point across all five regions, ranging from a high of 3.6% to a low of 3.3%.

   According to the survey, 20 positions received salary and/or total cash compensation increases that exceeded the overall average salary/total cash compensation increases by at least 25%. The following seven positions received increases to total cash compensation of at least 5.5%:
import/export manager
order processing clerk
supply chain manager
top contracts executive
top purchasing executive
total quality management (TQM) manager
warehouse manager.

   Bonus/Variable Pay Program Trends
   The survey revealed that bonus and/or other cash compensation payments averaged 7.4% of salary for all salary levels combined. Average bonus and/or other cash compensation payments made to logistics and materials management personnel ranged from a high of 42% of salary to a low of 3.9%. The percentage of personnel receiving short-term incentives varied significantly among salary levels, ranging from a high of 88.1% for those earning $200,000 or more to a low of 26.4% for those earning less than $30,000.

   The survey found modest differences in the average bonus and/or other cash compensation payments awarded among the industry sectors reported. The average payment ranged from a high of 10.2% of salary for logistics and materials management professionals in the utilities and energy sector to a low of 5.8% of salary for personnel in the services sector. The average percentage of those receiving bonus and/or other cash compensation varied significantly among industry sectors. The average percent of logistics and materials management professionals receiving a short-term incentive payment ranged from a high of 69.6% for those in the insurance sector to a low of 19.1% for those in the health care sector.

   Regionally, there were only slight difference to bonus and/or other cash compensation payments. The highest average bonus and/or other cash compensation payment, 8% of salary, was awarded to logistics and materials management professionals in the South Central region, while personnel in the West Coast region received a somewhat lower short-term incentive payment of 6.8% of salary. The percentage of logistics and material management personnel receiving a short-term incentive payment varied by slightly more than 6% across the five regions. The West Coast region paid short-term incentives to 44.3% of its logistics and materials management professionals while 37.9% of employees in the Northeast Region received an award.

   According to survey results, bonus awards varied significantly among logistics and materials management personnel with established bonus targets and those without. Where bonus targets existed, average bonus payments as a percentage of salary were 9.6% and where no bonus targets were established the average bonus payments as a percentage of salary were 2.4%. This is also true for the percentage of logistics and material management personnel receiving a short-term incentive. Where bonus targets were established, 75% of logistics and materials management professionals received a bonus payment while only 23.4% received a bonus payment where targets were not established.

   Survey methodology
   The data contained in this reference are based on the responses of 1,174 organizations encompassing 6,572 locations reporting data on 271,361 incumbents. Data are broken down by a total of 192 geographic areas, including 132 metropolitan areas and 119 industry classifications.