‘3PL firms want talent at contained salaries’

A new report indicates that the risks involved with suppressing salaries will worsen as demand for skills increases

‘3PL firms want talent at contained salaries’
The guide states that 74 per cent T&L employees will receive a salary increase of less than three per cent this year.


The logistics sector is looking at adding more value to business using fewer resources and continued cost reduction strategies, with many companies across Victoria and New South Wales outsourcing jobs to third part logistics (3PL) providers.

The result is a more competitive market where 3PL firms want quality talent but also want to keep a check on salaries.

As the demand for logistics skills increases, the risks involved with curbing pay growth will only get worse, a new report by Hays Logistics has revealed.

The 2016 Hays Logistics Salary Guide suggests that while business activity continues to grow, albeit at a slow pace in some sectors, employees are less likely to see the benefits in their pay checks this year.

Released today, the guide states that up to 74 per cent transport and distribution sector employees will receive a salary increase of less than three per cent this year.

It estimates that up to 15 per cent transport sector employees will see a pay rise between three and six per cent, while only one per cent will receive a raise higher than 10 per cent and up to 10 per cent will receive no salary hike this year.

"Overall, it’s clear that employers remain reluctant to offer substantial increases unless absolutely necessary to secure a candidate with skills in short supply," Hays Logistics director Tim James says. 

"While the lower Australian dollar has created stability and growth in logistics once again, and salaries are rising after many turbulent years of transformation and change, the increases on offer really only equate to a return to levels seen three years ago."

The report reveals that last year 64 per cent transport and distributor sector employees received a less than three per cent salary increase, while 15 per cent saw a pay increase between three to six per cent and only about 2 per cent received a more than six per cent increase.

On the other hand, over 19 per cent employees did not receive a pay increase last year.

However, this does not translate to employers affording to become complacent as a growing number of employees are beginning to demand more pay.

James says up to 41 per cent employees say they’ll ask for a pay rise in their next review.

"Another major trend is the changing requirements of employers, who now look for candidates with suitable soft skills and the right cultural fit.

"Two years ago this was of minimal importance. The computer skills of warehouse (store person) candidates are also now measured, especially SAP [Systems Applications Products] and Microsoft Office. 

"In addition, a logistics coordinator (office) needs to hold a forklift licence to be considered for a role.

"Meanwhile formal qualifications across the logistics industry have become more prevalent.

"It has become a lot harder to work your way up into an operational management role or even a supervisory role without some formal training and education.

"Those with supply chain management diplomas and similar stand out, but candidates are not doing much else to develop their careers.

"Making a qualification a hiring criterion will dictate which roles candidates apply for rather than encourage more to undertake formal training.

"Finally, across Australia supply chain planning roles (both demand and supply) are plentiful but strong demand planning experience and SAP/APO are in very short supply, which has increased salaries for these roles.

"In Victoria and New South Wales the logistics market continues its focus on lean efficiency and cost reductions.

"As more companies outsource their opportunities to third party logistics providers (3PL providers) salaries are being squeezed so providers can offer the most competitive pricing to win business.

"This is presenting 3PL providers with a hiring challenge. They want quality talent but also to keep salaries contained.

"The risk posed by suppressing salaries will only worsen as the demand for logistics skills increases."

However, the trend in South Australia seems to be a bit better, with "increased recruitment activity partly due to a global retail giant entering the market in 2016.

"Opportunities exist at the operations level in both transport and warehousing, while other roles are being created in rival companies as staff move to the new competitor.

"The public health system in the state also continues to create opportunities for blue-collar warehouse staff."

The guide is based on a survey of 2,752 organisations, representing over 2.6 million employees and includes salary and recruiting trends for over 1,000 roles in 14 locations in Australia and New Zealand.

For more information, visit www.hays.com.au/salary.

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