'06 Salaries, Incentives Show Growth

While numerically, Business Travel News' 23rd annual Travel Manager Salary & Attitude Survey uncovered a relatively static job market and unremarkable salary increases, corporate travel buyers certainly aren't standing still. They are concentrating on improving their travel programs and honing their skills amidst a relatively tumultuous 12 months that proved sometimes, the only constant in the business travel industry is change.

BTN's survey showed travel managers' salaries averaged $98,545 last year, a 5.4 percent increase from $93,195 in 2004. While the figure shows growth, it pales in comparison from years past, most notably in 2004, when on average buyers saw annual salaries jump 11.5 percent. Last year's small pay increase seems to reflect an overall stagnant industry job market. "There's hiring going on, but nothing stands out," said Dawn Penfold, president of The Meeting Candidate Network, a meetings industry recruitment firm in New York. "Everything is status quo."

A stable environment however, doesn't mean that some buyers aren't recognizing the pressure associated with such a dynamic and constantly evolving industry. "This has been going on for a while, but it seems to be escalating: You're seeing a lot of travel managers leaving the industry, not necessarily being fired, but the burnout level is starting to take effect," said Kevin Maguire, director of global travel services, at Austin, Texas-based Applied Materials. "You're starting to see good managers say, 'I just don't want to do this anymore.' "

According to P. Jason King, CEO of P. Jason King Associates, an executive search, career development and consulting firm in New York, salaries in 2006 are on the rise, though he added, "We only handle senior travel management, which may be why we're seeing more opportunities than some of our competitors."

Six months ago, Yasuo Sonoda was a buyer perusing the job market. Now global travel manager at Business Objects in San Jose, Calif., Sonoda offered advice to industry job seekers focused on increasing their earnings through a career move: "A good way to determine what a prospective company would pay is to look at classifieds in a job search's zip code for salary listings of a procurement director or procurement manager position," he said. "In those jobs, you can figure out the range of how much they're going to pay you in your area. That's a good benchmark to use," Also something to think about, according to Sonoda: "If you're hired to save X amount for the company, what the company's going to figure out is, 'OK, we have this lump sum of money that we're hiring somebody to reduce, how much is it going to cost us per dollar of that person's salary?' That's the number they're going to be running, so be aware of that."

King said employers during the last year have been more inclined to make up for small salary increases with incentives. Looking at other areas in which a company is willing to spend money on a potential employee—such as flights to and from an interview or relocation costs, King said—could make for a more lucrative job offer, even though the money is not going directly into a job candidate's pocket. "Many corporations will pay for the closing costs on a home a new hire is buying or selling—some will actually give an advance and some will underwrite a mortgage," King said, adding, "These major deals—you're talking salary of $100,000 and up—are super-important when you're in that range."

Even so, many buyers—an umbrella term used for the survey that includes a broad range of job titles and responsibilities—reported to BTN a decrease in the potential to earn bonuses, a figure that fell 6 percent in the last year. Rick Wakida, global travel manager at Foster City, Calif.-based Gilead Sciences suggested this might be the first effect of the Financial Accounting Standards Board's year-old requirement that companies expense options granted to employees. "That would definitely have an impact on total compensation, because if you're used to getting an annual grant and you're not getting that now, is that being replaced by a bonus or is it being replaced by nothing?" Wakida said.

After his position was eliminated, Wakida last year embarked on a four-month long job search, the length of which he attributed to a tough job market. "I attended the National Business Travel Association conference and the Association of Corporate Travel Executives conference to do some networking. I networked with all of my contacts and attended industry events and found it was a very tough job market," Wakida recalled. "It indicated to me that the market—at least from the corporate travel management side—was tight. Part of that, I believe, is because the travel management function is either being eliminated or absorbed into purchasing and people who are in travel on the corporate side are not leaving, so there's no movement."

The move to procurement is nothing new in this industry, and cost savings and government guidelines continue to drive that trend, said Penfold of the Meeting Candidate Network. "Procurement is becoming bigger and more influential," she said. "Both meeting and travel professionals are dealing with procurement or purchasing offices for travel and meetings." The trend has some buyers embracing the additional responsibility while others find it disconcerting. "As hard as we fight it, travel management is stuck in procurement, which rolls up into finance," said Business Objects' Sonoda. "It's a continuing battle to understand that travel management is always going to be a stepchild of some other department. We're always going to be looked upon for the procurement methodology of quantification, but it doesn't really fit."

Gilead's Wakida agreed, stating that while the cost-control and expense-reduction roles of a travel manager are important, they are not primary functions of the profession. "It might be one of three, the others being traveler safety and security and facilitating productive business trips," he said. Applied Material's Maguire offered this analogy: "Travel managers are like baseball pitchers," he said. "When a team wins, it's because they had a lot of great hits and they scored runs. When they lose, it's the pitcher's fault."

Buyers are finding creative ways to prove the value they bring to a company beyond cost-cutting.. Sonoda said his number-one priority is to educate employees on how to reduce the cost of travel, using such measures as intranet messages and running metrics for cost managers and analysts. He also recommended being actively involved with managing other departments. Wakida suggested travel departments align themselves more with sales departments. "Sales is always revered as the cash cow," he said. "We can help them have a successful sales trip. We are aiding the company's sale and that's more direct than say, the IT or payroll function. That's how we can differentiate it. Until that happens, I don't think we'll see any great increases in salary or compensation."

James Thalman, director of travel at FranklinCovey in Salt Lake City, said buyers looking to raise awareness about a travel program should focus on obtaining a broader perspective on the world in order to gain industry perspective. "There is so much to learn that doesn't get a lot of exposure in the United States," Thalman said. "Seek out of your comfort zone to find out what's going on in Africa and Japan. I might find something in the Air France Madame magazine that is applicable to what I do," Thalman said.

Other buyers and consultants echoed the education-is-important sentiment, pointing to such programs as "Learning by Playing for Change Management Competencies Development," offered by the Association of Corporate Travel Executives and graduate business school INSEAD, at the organization's global conference in Barcelona in October, as well as the National Business Travel Association's Certified Corporate Travel Executive designation and Global Leadership Program, run in conjunction with the University of Pennsylvania's Wharton School of Business. "Certification certainly will help someone find a job," said Meeting Candidate Network's Penfold. "If a company is comparing two candidates with like backgrounds, they'll go with the person with the certification over the non-certification."

Susan Gurley, executive director of ACTE, said the association's educational offerings are focused on current trends and aim to give members the tools and skill sets they need to be successful. "The educational benefits we have added are things like language learning, because in this international and globalized marketplace, we're seeing more interest in bilingual candidates or those who have experience traveling or living abroad," she said.

NBTA specifically is addressing the industry's move to procurement through education with a partnership with the Institute for Supply Management, a Tempe, Ariz.-based organization offering research, activities and education to supply management professionals. "We see travel and procurement working more closely than we used to," said NBTA president Suzanne Fletcher. "A lot of procurement people are being tossed into travel and it's not the same as ordering paper clips. It's a different commodity—there's a lot of personality in travel."