In marked contrast to sunny predictions of improved financial performance for many aspects of the corporate travel industry, travel buyers this year report a blustery wind blowing in as salary growth rates dipped sharply and employment opportunities were reduced.
"This definitely is an employer's market," said Denis Day, founder and CEO of The Day Partnership, a Downers Grove, Ill.-based travel industry staffing and recruitment firm. "Salaries are tighter. There is less negotiating for compensation, and the deals you get are not what they were a few years ago."
Business Travel News' 22nd annual Travel Manager Salary & Attitude Survey shows the average salary for a corporate travel buyer—an umbrella term for the purposes of the survey that encompasses a broad spectrum of job titles and responsibilities—in 2005 is $93,195, a scant 1.6 percent higher than the average salary in last year's.
That figure illustrates what travel industry employment consultants called a constricted, top-heavy job market in which employers are willing neither to spend appreciable money and time training new hires nor dramatically raise the compensation packages of their current travel buyers.
According to the survey of 349 travel buyers, despite increased job responsibilities that often include meetings management and a deeper hand in travel technology implementation, 15 percent of respondents didn't receive a raise at all and 82 percent received less than a 5 percent annual compensation increase. Respondents indicated their salaries increased by 4 percent on average, a figure likely skewed by larger percentages at the higher end of the salary scale.
"That number sounds right, and it's not influenced by salaries for average or lower tiers," Day said. "There are small peaks in higher-paying management jobs with far more responsibility."
BTN's pool of randomly selected travel buyer respondents included corporate meeting buyers and planners, too, many of whom also have been asked to broaden their roles without necessarily receiving a commensurate salary bump.
"I'm not seeing a lot of increase in middle management, the ones that pay $45,000 to $60,000," said Dawn Penfold, president of New York-based Meeting Candidate Network, a meetings industry job placement firm.
Penfold said the survey's 1.6 percent figure sounded low, and that her experience said typical meetings industry salaries grew about 5 percent on average this year, but, like Day, she said increases were not spread evenly throughout all job titles.
"There are more high-level, strategic positions opening up," Penfold said. "Companies, when hiring for them, are looking for the world: someone with a strategic background, with corporate travel, trade show, marketing and incentive experience. The candidates with that experience are slim to none."
Though candidates with that skill set are highly prized and command high salaries, Penfold said, industry layoffs in past years have kept salary growth relatively steady.
Travel managers, too, are more likely to receive better raises when they are in higher-ranking positions, Day said.
"Higher up, there is more flexibility in compensation," Day said. "The job market is very shallow. There used to be tremendous depth before Sept. 11. Now, however, the market has no depth and no legs."
Buyers frustrated with their current salaries are not likely to find the compensation grass any greener at a different company. Many employers, leery of the cost of hiring and training new employees, particularly if those new employees underperform their responsibilities or leave the company after they're trained, are loath to expand their teams or import highly paid new blood.
"Good people are hard to find," Day said. "There's a perception that the marketplace that is so rich with good people who want to work at the salary that they want to pay. The reality, though, is that a lot of people have left the industry and aren't looking for those jobs, and many others aren't employable at that level."
Though, intuitively, it would seem that a market in which new hiring is discouraged would lead to a better salary-negotiating position with their current employers for buyers, Day said this is not the case, as the limited opportunity for professional movement restricts a buyer's stance.
The result is a job market that will value a demonstrably effective buyer with a skill set that offers expert performance in at least some professional aspect over a generally competent jack-of-all-trades.
"We're going to see more niche hiring," Penfold predicted. "It costs so much to hire someone that companies are afraid to hire the wrong person. You'll see hires for niche areas of knowledge, like pharmaceutical and financial services experience. Companies are not willing to say that the candidate can learn it. Salaries should grow, but nothing where people can get wealthy."
Not every executive was pessimistic about travel buyers' salary and employment prospects. "We look at this from a different perspective: From a business standpoint are budgets healthy. There are increasing budgets and that is a healthy sign," said Colin Rorrie, president and CEO of Dallas-based Meeting Professionals International. "The increases in 2003 and 2004 may well have been the end result of pent-up demand. Post-9/11 was a tough environment, and companies held the line and even got rid of people. As things picked up, as noted in our FutureWatch survey
(Meetings Today, Jan. 17), that may be an indicator that needed to catch up over that time, and now is slipping back to more moderate increases. They had to catch up for the lean years."
Rorrie also pointed to the increasing cost of benefit packages, particularly health insurance, and cautioned that any examination of salary levels must take this into account. "You have to look at the entire package," he said. "The company might not be giving a big raise, but may also not be passing along increased health benefit cost. They also might give a larger raise, but increase your deductible and co-pay."
Day said there is not a strong correlation between the industry's financial performance and the salary prospects of its buyers, and said individual job productivity will carry the day. "If I could offer a word of advice, it would be that employees and individuals have to be good," Day said. "There's so much more pressure on employee productivity and performance than there has been in the past. It is not a market for the timid. It comes down to the fact that quality people are few and far between."
"My instincts are that this will not change for a long time, if at all," Day said. "That's not pessimistic. It's realistic. There is no move afoot to change it. What's going to change it? Where's the panacea? Employers are too timid to do anything, even at the cost of customer service. No matter if you're the CEO or in a call center, you don't want to lose your job, and because of it, people are too timid to change and make decisions."