Upward salary pressure diminishes


Some relief on the horizon for employers as the rate of supply chain salary increases shows a decline, Logistics Executive report finds

Upward salary pressure diminishes
Upward salary pressure declines

By Anna Game-Lopata | December 18, 2012

Talent shortages across most supply chain and logistics roles continue to drive salary increases but at a slower rate, according to Logistics Executive Recruitment’s (Logistics Executive) 2012-2013 Employment Market Survey Report.

The report, which forms the basis of SupplyChain Review’s exclusive Career and Salary Guide in the October issue, has just been released to the market in full.

Logistics Executive’s sixth annual
market survey
reveals 31.10 percent of respondents, mainly executives in Australia, Asia and the Middle East, say they received pay increases of more than 10 percent, a significant drop compared to the 40.97 percent in the previous survey.

Just 44.10 percent are expecting salary increases of 10 percent or more in the year ahead compared to 51.87 percent
who expected such an increase this year.

"The rate of salary increases has diminished mainly due to some easing in economic activity, a slight increase in levels of unemployment and the corresponding increase in skilled labour supply feeding into various markets," says Logistics Executive CEO Kim Winter.

"This increase in available talent is mainly due to redundancies by some of the larger global logistics players in relation to expatriate positions, with some positions being replaced by local executives, continuing the global trend toward localisation throughout the supply chain and logistics space."

Although some of the regions where survey respondents are employed experienced slowing in rates of economic growth, underlying strength across key industries remains comparatively firm.

"Salaries throughout the Australian supply chain and logistics sectors continue to be significantly impacted by the mining and resources boom which has continued to drive higher salaries in Western Australia and the Northern Territory," Winter says..

"The increased use of high-level supply chain and logistics industry professionals,contractors and interim managers to assist companies improve efficiencies and drive cost down, service up strategies is a dominant feature of the employment market."

Winter says outlook predictions remain strong despite slight decline in business confidence in some regions, with 64.6 percent of this year’s survey respondents indicated their company’s activities/growth had increased during the previous year.

"This compares year’s survey
in which
75 percent predicted their company would experience growth, a differential of about 10 percent against this year’s results."

This year,
74.46 percent of participants expect their company activities or growth to increase, indicating a slight decrease (5 percent) in confidence compared to last year where just over 80 percent expected growth in the year ahead.

Meanwhile approximately 18 percent believe growth rates to remain the same compared to 16.50 percent last year who predicted static growth.

"We predict a mainly positive, but somewhat mixed outlook for some businesses in 2013, with sales volumes, inventories, selling prices and employment rates experiencing modest growth in New South Wales, Victoria, Tasmania and in Queensland," Winter says.

"However capital investment and profits (driven by improved alignment and competitive supply chains) are increasing nationally and will continue to rise throughout the next twelve months."

The report also finds supply chain and logistics companies across the board
continue to
experience ongoing challenges recruiting required talent.

This year 60.50 percent of those surveyed say it has been more difficult to recruit quality staff to meet business demands than the previous year.

This is a slight decrease to last year when 62.48 percent said they found it had been more difficult to find required talent.

"Last year 16.27 percent indicated they had found it easier than the previous year to recruit compared to 13.76 percent who found it easier last year than the year before," Winter says.

"This coincides with talent availability as unemployment levels have risen slightly providing additional talent pools."
The report also reveals career advancement main driver in new employment decisions.

"Career development remains the most significant driver for new employees joining their organisation (26.73 percent), with salary following a close second (20.29 percent)," Winter says.

"These results are almost identical to the previous year and reflect similar trends since our first survey in 2008."

Job security and company values follow respectively at 14.83 percent compared to 15.32 percent last year.

"Employer values are rated next most important factor at 15.33 percent. These four drivers outweigh all of the other results and are the most significant factors influencing why people join organisations," Winter adds.

Asked to nominate the key reasons why employees left their organisation, 25.97 percent indicate more money was the main reason, followed by career development at 20.50 percent.

Some 11.57 percent of employers cited change of industry as the third most prevalent reason employees left the company, a slight increase on last year’s (11.13%) result.

Profitability was ranked by 87.22 percent as the top most challenge by CEOs and company directors surveyed in the report.

This is followed by customer satisfaction (85.65 percent) and leadership development (84.44 percent). Increasingproductivity ranked as the 5th most important challenge (80.71 percent).

"It is significant to note that there has been a substantial increase in the importance of retaining talent with 81.11 percent of respondents ranking this as their most significant challenge, a substantial increase in ranking to last year (69.41 percent)," Winter says.

"It also reflects the largest percentile change recorded of any issue surveyed this year."

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