Below, read part 1 of Industrial Distribution's 2024 Salary Report, covering trends in executive and mid-level management compensation and job satisfaction; read part 2 — featuring responses from sales personnel — here.
New data from Mercer suggests that, so far in 2024, wage hikes have tracked slightly lower than what was expected. Budgets for salary increases – originally projected by the firm to jump 3.8% – are up 3.6% instead.
Experts say that the data points to a stabilizing labor market — one that provides some relief as wage pressures for employers abate. And while this dovetails with inflation data that indicates improvement for businesses and their employees alike, it’s also not that simple: many workers are still indicating that their wages haven’t kept pace, and that they continue to expect pay increases to offset financial stresses.
Does this phenomenon extend to our industry? We sought to find out in this year’s Salary Report, in which we examine pay, benefits and general job satisfaction among industrial distribution company employees.
The 2024 ID Salary Report is based on a survey distributed via email and conducted throughout the month of June. The results are divided into three categories based on how respondents classified their specific job functions.
The following results are based on separate sets of data from Executives (Owner, Chairman, CEO, CFO, CIO, COO, President or VP); Mid-Level (non-sales) Management (Product, Operations, Branch and/or Purchasing); and Sales Representative/Manager. This year’s split of respondents came in at 43% executives, 21% mid-level management and 37% sales rep or sales management. Overall, 87% of respondents were male, and the pool’s age breakdown was split at 18% under 40 years old; 19% at 41-50; 31% between 51-60; and 32% above age 60.
Executives
Distribution company leadership tends to be the highest paid among the job segments we target with our annual survey — the result of escalated responsibilities but, also, experience: of the respondents who identified being employed in this category, 43% of them are 60 years or older. In fact, fewer than one-third (29%) are under the age of 50, which offers a lopsided – if accurate – view of this group. Another lopsided characteristic is that 95% said they are male. Other demographic characteristics of this group included:
More than half of our executive-level respondents (53%) believe the region in which they live offers an average or below-average cost of living, with 38% saying they hail from the Midwest.
Two-thirds represent companies whose revenue bracket is $100 million or less (with 39% of the total in the $25 million or smaller category).
Fewer than one in 10 in this category say they have not attended any college, whereas 15% hold advanced degrees and 52% bachelor’s degrees.
Last year, 59% of executives surveyed said they had received a pay bump. This year, that figure came in slightly lower, at 54%, with the most common increase characterized as a standard, merit-based pay raise. Perhaps a reflection of the fact that fewer raises are being handed out, we saw this group’s total pay package fall right between the numbers reported in 2022 and 2023. While base salaries increased to a reported $189,000, compared to $167,000 last year, this group’s responses suggested some drops in variable pay.
In 2023, additional compensation dollars from bonuses and stock options, for example, were enough to push that year’s total compensation back to just a hair under $300,000 annually. This year, it dipped to $284,000. While it’s difficult to understand whether the response pool shifted enough to cause the change, it’s also a reasonable assumption that variable pay really has decreased amid reports of improved hiring stability — as well as a business environment that suggests companies may not routinely be hitting quarterly targets.
One of the most notable changes over last year, meanwhile, related to pay cuts — which may have been enough to skew the overall pay package downward for the executive group. Last year, nobody in our surveyed group reported going backward; this year, nearly 5% of survey respondents said that they took a cut to either their salary or benefits in the past 12 months.
Digging deeper, it seems some of the industry’s top brass have a reason to sound off. One exec didn’t feel fairly compensated “given the stress and the load I carry compared to other executives at the company.” Another said they felt “underpaid for responsibilities and value brought to the company.” And the demands, at least, appear to be relatively similar compared to last year, when 79% said they’d experienced increased job demands, compared to 76% who said the same this year.
Unfortunately, shifts from last year’s data may reflect some uncertainty when it comes to pay in the future: in 2023, for example, 88% of executive respondents said they did not have concerns about cuts to their compensation in the upcoming year. This year, that figure has fallen in a significant way -- just 71% now say they don’t fear cuts. Another statistic we saw fall was the percentage of distribution company executives who feel fairly compensated: 88% said they did last year, compared to 83% today.
Mid-Level Management
Although mid-level managers represent the smallest share of our overall survey group, they do bring a little diversity to the mix. In contrast to the executive category, nearly a quarter of our mid-level group consisted of distribution company employees under 40, and more than 18% of respondents in this category were female, offering a glimpse into the reality of the industry’s demographics outside of the executive ranks. Much like last year, this group shows they are well-educated, with a similar mix of college and advanced degree success compared to their superiors.
The results also branch out a bit when it comes to company size. The largest segment of this group hails from companies between the $100 million to $500 million range; one in five even represent the $500 million-plus category. This group also hails largely from the Midwest (39%) and the Northeast (21%).
When it comes to the salaries these individuals yield, we saw the same types of incremental increases that mid-level managers have exhibited over the past few years. Base salaries went from an average of $88,000 in 2021 to $94,000 in 2022, then to $104,000 last year. This year, the average base salary reported was $109,000. After adding in an average variable pay of $27,000, we see an overall compensation package of around $136,000 — a 5.4% increase over the 2023 average total pay package of $129,000.
As evidence supporting the trend, 63% percent of our respondents acknowledged receiving a pay bump over the past year, characterized as follows:
- A cost-of-living increase based on inflation (36%)
- A standard, merit-based pay raise (55%)
- A sizable, merit-based pay raise (9%)
- A stronger benefits package (5%)
- More incentive-based opportunities for cash awards/bonuses (5%)
Strikingly, the mid-level group appears to have fared better than the executive tier when it comes to consistency: no respondents reported a cut to their salary or benefits in the past 12 months. This may be a reflection of the disparity between these two groups over how much variability there is in their pay packages. For example, bonuses, commissions and stock awards comprise around 20% of the total compensation for the average mid-level management respondent; conversely, executive respondents’ variable pay is, on average, one-third of their total compensation.
Despite the compensation bump – and lack of declines – does the mid-level group feel satisfied with their compensation? Although they’ve maintained their crown as the most unhappy group in the survey, satisfaction has edged up a bit — but still not enough to reach a majority: 52% believe they are not fairly compensated, compared to 63% who said the same last year.
Likewise, this group feels that their companies are generally failing to remain competitive when it comes to hiring top talent: 55% say their employers, overall, are not achieving this objective.
When it comes to specific gripes, anonymous respondents in this employment category told us the following as to why they felt their pay was unfair:
- “No cost of living salary increase for inflation.”
- “No raise in 3 years.”
- “Not at the pay range I should be for my years of experience.”
- “Workload has nearly doubled.”
- “My bills are high.”
No surprise, the vast majority of those who chose to elaborate on their situation were unhappy employees, compared to their more satisfied peers who skipped the question.
Read part 2 of ID's annual Salary Report here.
