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‘Tug of war’ erupts over logistics salaries

More logistics professionals will receive a pay rise this year than last, but it will be a less significant increase than they hoped for.
According to the FY 2019/20 Hays Salary Guide, 92% of employers will increase their transport and distribution staff salaries in their next review, up from 83% who did so in their last review.
However, the value of these increases will fall. 71% intend to raise salaries at the lower level of 3% or less, up from 63% who did so in their last review. At the other end of the scale, just 3% of employers intend to grant pay increases of more than 6%.
Professionals prioritise a salary increase
For their part, 26% of the transport and distribution professionals Hays also spoke to expect no increase whatsoever and a further 48% expect 3% or less. Yet while these professionals anticipate little or no increase, they’re not going to sit idly by and accept it.
In fact, more than half (57%) say a salary increase is their number one career priority this year. 46% intend to achieve this by asking for a pay rise, while others are looking elsewhere – 41% of jobseekers say their uncompetitive salary provoked their job search.
“Tug of war over salaries”
“Evidently, the aggregate effect of several years of sedate salary increases is taking its toll and we’re now seeing a tug of war over salaries,” said managing director of Hays Logistics Tim James.
“On the one hand, we have professionals telling us they’ve prioritised a pay rise and are prepared to enter the job market to improve their earnings. On the other, employers tell us they want to add to their headcount and are being impacted by skill shortages, yet they want to curtail salary increases.
“There are only a few exceptions. The recovery of the senior supply chain market led to demand for supply chain managers and, in turn, mid-tier demand and supply planners. In some states, salaries have increased in response to this demand.
“Tasmania’s positive economic climate led to a surge in interstate and international exports. Looking ahead, salaries are expected to increase in the state for multi-combination drivers and warehouse supervisors, who remain in short supply.
“While salaries for warehousing roles remain steady in smaller organisations nationally, larger companies are offering salaries over $90,000 for highly skilled and experienced candidates, especially those with safety qualifications and experience.
“In addition, in New South Wales and Victoria, higher vacancy activity has significantly drained the available pool of candidates and created a war for talent. As a result, employers in these states have begun to offer higher salaries for senior warehouse supervisors, operations managers, transport managers and fleet managers and controllers.”
In other key findings, the 2019/20 Hays Salary Guide found:

  • 67% of organisations offer flexible salary packaging. Of these, the most common benefit is salary sacrifice, offered by 55% of employers to all employees. This is followed by above mandatory superannuation (offered by 37% of employers to all their employees), parking (33%), bonuses (27%) and private health insurance (26%).
  • Of the benefits offered to a select few employees, private expenses tops the list, with 70% of employers offering it to a hand-picked number of employees.
  • 68% of employers said business activity had increased over the past year, with 70% expecting it to increase in the next 12 months.
  • 57% intend to increase permanent distribution staff levels over the coming year.
  • 70% say skill shortages will impact the effective operation of their business or department in either a significant (28%) or minor (42%) way, up from 67% last year.
  • 54% of employers are restructuring to keep up with changing business needs – the key driver of these restructures is a change in the required skill sets.
  • In skill-short areas, 57% of employers would consider employing or sponsoring a qualified overseas candidate.

Salary guide reveals a 'tug of war’ for logistics

According to the FY 2019/20 Hays Salary Guide, more logistics professionals will receive a pay rise this year than last, but it will be a less significant increase than they hoped for.
The research also revealed that 92 per cent of employers will increase their transport and distribution staff salaries in their next review, up from 83 per cent who did so in their last review.
However, the guide found that the value of these increases will fall. 71 per cent intend to raise salaries at the lower level of 3 per cent or less, up from 63 per cent who did so in their last review. At the other end of the scale, just 3% of employers intend to grant pay increases of more than 6 per cent.
“Evidently, the aggregate effect of several years of sedate salary increases is taking its toll and we’re now seeing a tug of war over salaries,” Tim James, Managing Director of Hays Logistics said.
“On the one hand, we have professionals telling us they’ve prioritised a pay rise and are prepared to enter the job market to improve their earnings. On the other, employers tell us they want to add to their headcount and are being impacted by skill shortages, yet they want to curtail salary increases.
There are only a few exceptions. The recovery of the senior supply chain market led to demand for Supply Chain Managers and, in turn, mid-tier Demand and Supply Planners. In some states, salaries have increased in response to this demand.  Tasmania’s positive economic climate led to a surge in interstate and international exports,” he concluded.

More logistics workers to get a pay rise – but not much

81 per cent of Australia’s transport and distribution employers will give their staff a pay rise of less than 3 per cent in their next review, while 4 per cent will not increase salaries at all, according to the 2018-19 Hays Salary Guide.
The 2018-19 Hays Salary Guide shows a further 11 per cent will give staff an increase of 3 to 6 per cent. Just 4 per cent will increase by 6 per cent or more.
Compared to their last review, when 11 per cent of transport and distribution employers gave no increases, the findings show that more logistics professionals will receive an increase.
Logistics workers, however, have higher expectations than employers for a salary increase: 23 per cent expect an increase of 6 per cent or more.
Employees have also prioritised a pay rise. Two-thirds (67 per cent) say a salary increase is their number one career priority this year. If their employer doesn’t offer a pay rise, almost half (48 per cent, up from 45 per cent last year) will request one.
“Across Australia’s warehousing, transport and supply chain markets, a key theme has been positive productivity linked to efficiency improvements,” said managing director of Hays Logistics Tim James.
“Logistics companies have therefore been targeting multi-skilled candidates who have a strong knowledge of systems and processes. They must also have a proven track record in reducing costs, the ability to achieve demanding KPI, and diverse experience. Add the requirement for a wider technical skill set and the ability to meet compliance and OH&S regulations for those in management roles, and it is surprising that salaries have not increased in line with rising employer expectations. How long this can continue remains to be seen.
“In transport specifically, we have seen an active market for transport professionals, particularly in Victoria and New South Wales where infrastructure is strained. Salaries have increased in response to demand, reaching up to $85,000 plus superannuation.
“Candidate movement at the senior level, particularly heads of logistics, transport managers/planners and distribution managers, has been minimal. However this is expected to change in 2018-19 as senior professionals become more aware of the opportunities presented by industry growth. This could also be the catalyst that prompts employers to increase salaries to retain their top talent.
“Within the supply chain market, the value of a robust and transparent supply chain has seen sales and operations planning (S&OP) processes come to the fore. This has created demand for quality Supply and Demand Planners. Salaries are competitive given the drive from employers to secure the best available talent in this area.”
The Hays Salary Guide also found:

  • Business activity increased for 74 per cent of employers in the past 12 months, while 77 per cent expect it to increase in the next 12 months.
  • 40 per cent foresee a strengthening economy in the coming six to 12 months.
  • 40 per cent of employers expect to increase permanent staff levels in the next 12 months in their distribution department.
  • Meanwhile, 20 per cent expect to increase their use of temporary and contract distribution staff.
  • 40 per cent of organisations now employ temporary and contract staff in their distribution department on a regular ongoing basis and another 20 per cent employ them for special projects or workloads.
  • In the last 12 months, 16 per cent of Australians asked for a pay rise but were declined – a further 18 per cent asked for a pay rise and were successful.
  • The success of the latter perhaps explains why 48 per cent say they intend to ask for a pay rise in their next review. A further 24 per cent are as yet unsure.
  • 32 per cent of employers say staff turnover has increased in their organisation over the last 12 months.
  • 67 per cent of employers, compared to 65 per cent last year, are worried that skill shortages will impact the effective operation of their organisation or department in a significant (26 per cent) or minor (41 per cent) way.
  • 67 per cent of employers offer flexible salary packaging. Of these, the most common benefits offered to all employees are salary sacrifice (offered to all employees by 57 per cent of employers), above mandatory superannuation (41 per cent), parking (33 per cent), private health insurance (29 per cent) and bonuses (27 per cent).
  • 70 per cent of employees have access to flexible work practices, 56 per cent receive ongoing learning & development, 45 per cent career progression opportunities, 36 per cent health and wellness programs, 32 per cent over 20 days’ annual leave and 30 per cent financial support for study.

 

How to get paid 48% more

The future of work: Occupational and education trends in supply chain and logistics in Australia study released.
Key findings

  • Completing postgraduate qualification can boost income by 48% for supply chain logistics professionals.
  • Australian supply chain and logistics workforce forecast to grow from 145,000 people in 2016-17 to 161,000 in 2021-22.
  • Growth of 2.1 per cent a year over the coming five years, nearly half as fast as the 1.5 per cent expected in the Australian labour force as a whole.
  • In 2016-17, supply chain & logistics professionals with relevant postgraduate qualifications commanded an average annual income of $140,949 – 66 per cent more than workers in the sector with no post-school qualifications.
  • By 2021-22, qualified professionals are expected to be earning $164,360, an impressive rise of 14.3 per cent.
  • Technological revolution is driving jobs growth in the sector faster than in the general workforce, putting pressure on managers to acquire sophisticated new skills in e-commerce and data analytics.

Professor Booi Kam, the program director of the Master of Supply Chain and Logistics Management at RMIT University has released a study on Employment forecasts for the supply chain and logistics workforce by component occupations.
“With new technologies such as drones, driverless vehicles, 3D printing and sensor technology seeing increased deployment across various supply chain functions, there will be greater opportunities for supply chain professionals to adapt business operations in procurement, production and distribution to effectively and efficiently use these digital tools,” Mr Kam said.
“Technological developments are providing significant opportunities for applying data analytics to improve supply chain and logistics operations across functions such as demand forecasting, inventory management and supply chain visualisation. The use of data analytics to inform these decisions is increasingly being recognised as best practice in supply chain management.”
Partner at Deloitte Access Economics David Rumbens said:
“The growing importance of digital technology means there is an increasing reliance on data-driven insights to improve supply chain efficiency and effectiveness.
“The evolution of the supply chain is also being accelerated by consumer-driven change, as customers move towards e-commerce away from traditional ‘bricks and mortar’ retailers to online purchases and e-commerce.
“Supplying goods from the retailer to the consumer for online commerce involves different transport and logistics considerations to in-person purchases, such as requiring efficient delivery services and customer management processes. The entry of Amazon will significantly disrupt the Australian retail landscape.
“Additional study in the supply chain and logistics area can enable workers to build on their core skills while upskilling in areas such as business analytics, project management and strategy development. This can facilitate future career progression and lead to a diverse range of new employment opportunities.”
The future of work: Occupational and education trends in supply chain and logistics in Australia was developed by Deloitte Access Economics in collaboration with RMIT University, and provides insights on how the nature of work and study in supply chain and logistics are evolving as a result of ongoing changes to the economic, business and labour market landscape, with employment forecasting using Deloitte Access Economics’ macroeconomic modelling framework. The following occupations have been identified using the Australian and New Zealand Standard Classification of Occupations (ANZSCO) as representing potential employment opportunities in the supply chain and logistics area: Importers Exporters and Wholesalers; Manufacturers; Production Managers; Supply Distribution Managers; General Manager (Transport, Postal and Warehousing industry). The analysis in the report is based on this list of occupations. The full report can be downloaded here.

Higher education boosts salary for logistics professionals: Deloitte

A new report from advisory service Deloitte Access Economics has found that Australia’s supply chain and logistics workforce will reach 161,000 people in 2021/2022, up from 145,000 in 2016/2017.
This represents an annual growth rate of 2.1 per cent, above the projected growth of the Australian workforce as a whole, 1.5 per cent.
The future of work: Occupational and education trends in supply chain and logistics in Australia also found that postgraduate qualification impacts the earning power of the sector’s professionals, boosting lifetime salaries by 48 per cent, compared to individuals with no post-school qualifications.
In 2016/2017, supply chain and logistics professionals with relevant postgraduate qualifications commanded an average annual income of $140,949 – 66 per cent more than workers in the sector with no post-school qualifications.
By 2021-22, this is expected to rise to $164,360, a 14.3 per cent hike.
According to Deloitte, technological revolution is driving jobs growth in supply chain and logistics faster than in the general workforce, putting pressure on managers to acquire new skills in e-commerce and data analytics.
“With new technologies such as drones, driverless vehicles, 3D printing and sensor technology seeing increased deployment across various supply chain functions, there will be greater opportunities for supply chain professionals to adapt business operations in procurement, production and distribution to effectively and efficiently use these digital tools,” said Professor Booi Kam, the Program Director of the Master of Supply Chain and Logistics Management at RMIT University, who consulted with Deloitte for the report.
“Technological developments are providing significant opportunities for applying data analytics to improve supply chain and logistics operations across functions such as demand forecasting, inventory management and supply chain visualisation. The use of data analytics to inform these decisions is increasingly being recognised as best practice in supply chain management.”
David Rumbens, Partner at Deloitte Access Economics, added: “The growing importance of digital technology means there is an increasing reliance on data-driven insights to improve supply chain efficiency and effectiveness.
“The evolution of the supply chain is also being accelerated by consumer-driven change, as customers move towards e-commerce away from traditional ‘bricks and mortar’ retailers to online purchases and e-commerce.”
Read the report here.

Packaging company among top 10 for Australian CEO salaries

Ron Delia, CEO of Australian multinational packaging company Amcor, has the seventh highest salary in Australia, according to an annual survey of ASX100 CEOs carried out by the Australian Council of Superannuation Investors’ (ACSI). The survey reported that in 2016 he realised pay of $14,339,815, placing him ahead of Commonwealth Bank CEO, Ian Narev, though behind several healthcare, passenger transport, leisure and food company CEOs.
Peter and Steven Lowy, joint CEOs of shopping centre company Westfield Corp., topped the list, with a declared realised salary of $26,255,778.
In a statement, ASCI said, “We publish this survey to increase the level of transparency around CEO remuneration in Australia.
“We would like to include data about gender pay equality in our analysis. Sadly, however, the pool of female CEOs in the ASX200 in 2016 was too small to enable meaningful analysis of the data.”

New AusPost chief comments on the challenge ahead

Christine Holgate, announced last week as the new Managing Director and Group CEO of Australia Post, succeeding Ahmed Fahour, has spoken to the Seven Network’s Sunrise team about the task ahead for the postal service.
Asked about the biggest trial she anticipates Australia Post will face, Holgate noted that utilisation of the company’s workforce as letter sending declines will be difficult going forward.
“Clearly, one of the biggest challenges is you’ve got this army of these fantastic trusted people going out to our homes every day, but the letters they’re delivering are declining,” she said, adding that she is keen to keep the nation’s post workers relevant in the community and in their jobs.
When questioned about her salary expectations when entering the position, after the disclosure of her predecessor Fahour’s excessive pay packet resulted in his departure from the company, Holgate noted that remuneration wasn’t a consideration.
“I know this might sound peculiar to people, but I never asked what the salary was,” she said. “It wasn’t actually a factor in me deciding to do the job, I always said to John [Stanhope, Chairman (non-executive) of Australia Post’s board of directors], ‘you’ll pay me what you think is fair’, and to me, taking the job had nothing to do with pay.”
See the interview below.

AusPost boss Australia’s highest paid civil servant, earns $5.6 million

Heads rolled this week when it was revealed that Ahmed Fahour, Managing Director and CEO of Australia Post, earns ten times more than the Prime Minister.
After attempting to block a request to disclose the salaries of its senior management team, claiming it would result in ‘unwarranted media attention’ and ‘brand damage’, Australia Post was directed to release the information. In past years, all such salaries were public knowledge, until in 2014/15 it was decided that the total sum be provided rather than individual pay.
Senator James Paterson, Chairman of the parliamentary committee tasked with reviewing the salaries of the Government-owned entity’s executives, revealed that Fahour received a $4.4 million salary along with a $1.2 million bonus in the last financial year, bringing his total package to $5.6 million, leaving Prime Minister Malcolm Turnball’s $522,000 pay looking paltry by comparison.
“I think that salary, that remuneration is too high,” Turnbull told reporters on Wednesday. “As someone who has spent most of his life in the business world before coming into politics, I think that’s a very big salary for that job.”
John Stanhope, Chairman at Australia Post, denied trying to cover up the information. “There’s been no intended secrecy or lack of transparency,” he told ABC‘s AM program. “When we report remuneration, we’re required to follow Government guidelines and we’ve reported it every year as required. The Senate asked a question on notice and we responded and gave them all the information.
“That number, it has his base salary, it’s got some short-term incentives which he earned because the company went from loss to profit in the ‘16 year, it also includes his superannuation. It’s everything.
“It is a Government business enterprise, that is true, but it isn’t actually taxpayer funded, it’s self-funded, so it generates profit and generates its own cash.”
Stanhope stated that 73 per cent of Australia Post’s revenue and all of its profit comes from the parcels business, where it competes against multinational firms such as DHL, FedEx and Toll.
“It’s a very competitive business and we need to pay competitive salaries,” he said.

Study finds big differences in salaries, employee movements

Bucking the trend of recent years, employees working in Australia’s small companies are increasingly choosing to stay with their employers, while large companies are still forecasting wage increases – with the biggest winners likely to be senior executives and the biggest losers salaried staff.
 
The Australian Institute of Management’s (AIM) National Salary Survey 2009 includes separate analysis for large ($10m plus) and small (less than $10m annual turnover) companies, and the results are striking.
 
Bucking the trend of recent years, employees working in Australia’s small companies are increasingly choosing to stay with their employers, with voluntary staff turnover rates plummeting to 9 per cent per annum, from 12.7 per cent in the previous year and this trend is set to continue, according to the nation’s leading survey of salaries and human resources trends.
 
In fact, the survey found that there will be less opportunity for staff to move between small companies in the foreseeable future, with only around one-third (34.2 per cent) of small companies expecting to increase permanent staff numbers over the next 12 months, down significantly from 67.3 per cent in the previous year,.
 
Now in its 45th year, the AIM National Salary was based on the responses of 759 companies, comprising large companies (548 contributors) and small companies (211 contributors).
 
The survey revealed signs of further negative fallout from the global economic downturn, with annual salaries rising by 4.6 per cent in the 2008/2009 year (down from 5.2 per cent in the previous year). This downward trend is set to continue into the foreseeable future, with small companies forecasting wage movements for 2009/2010 at only 4.1 per cent. 
 
The combined effects of lower wage increases and higher involuntary turnover rates, amounts to significant challenges for organisations to contain employment costs while remaining competitive and keeping employees engaged, all within the context of an increasingly uncertain and challenging economic environment.
 
While voluntary staff turnover rates are down on last year, they still pose a threat to small companies due to the significant costs associated with recruitment and re-training. 
 
The survey found that the top reasons for staff resignations from small companies were to pursue a new challenge (in 64.7 per cent of small companies) and to obtain better pay (in 51.8 per cent of small companies).
 
The survey indicates that in 2008/2009, only 40.0 per cent per cent of small companies have a dedicated training budget (as compared to 57.3 per cent of large companies) while around one-fifth (21.7 per cent) of small companies have formal succession plans in place (as compared to 31.7 per cent of large companies). 
 
Large companies still planning salary increases
 
Despite the current economic gloom, large companies are still forecasting wage increases of 3.5 per cent for 2009/2010 – albeit less than the 4.3 per cent actual increase reported in 2008/2009 – with the biggest winners likely to be senior executives and the biggest losers salaried staff, according to the nation’s leading survey of salaries and human resources. 
 
According to the survey 2009, large companies in the (until recently) resource boom states of Western Australia and Queensland have been hardest hit, with the rate of actual salary increases and forecast salary increases falling significantly from the previous year’s pay movements and forecasts.
 
Involuntary staff turnover rates were found to be up slightly from 3.8 per cent in 2008 to 4.8 per cent in the 2009 Survey. A more worrying trend is that only 39.6 per cent of large companies in Australia expect permanent staff numbers to increase over the next 12 months (down from 59.7 per cent in the 2008 Survey), while nearly a quarter (23.5 per cent) of organisations are expecting a decrease in permanent staff levels (up significantly from 8.4 per cent in the 2008 Survey).
 
The combined effects of lower wage increases and higher involuntary turnover rates, amounts to significant challenges for organisations to contain employment costs while remaining competitive and keeping employees engaged, all within the context of an increasingly uncertain and challenging economic environment.
 
According to the AIM Survey, there are some mixed signs with regard to expected training spend over the next 12 months, with a notably lower proportion (33.7 per cent) of organisations expecting to increase training budgets (as compared to 45.7 per cent in the 2008), while the majority (52.5 per cent) of organisations expect their training budgets will remain the same (up slightly from 48.4 per cent in the 2008 AIM Survey).
 
 

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