Commercial operations staff in 2020

Spinnaker gathered salary data for nearly 3,000 commercial operations staff globally in 2020 and having recently published the annual Maritime HR Association salary reports the team’s attention has turned to the more in-depth market analysis reports. Highlights from a review of the Commercial Operations job family found:

A reduction in team size

The average size of operations teams has reduced this year, most noticeably at the professional ‘Commercial Operator’ level. Staff reductions designed to generate savings often hit hard at this level first, but whether this will need to continue up the hierarchy in 2021 remains to be seen.

A ‘typical’ company is now reporting 3 x Operations Managers, 6 x Senior Operators / Assistant Managers, 9 x Operators and 7 x Operation Assistants for every Head of Operations role. That’s 1 less Senior Operator, 3 fewer Operators and 1 less trainee level role per department than was reported in 2019.

Stable salaries

The US continues to offer the highest base salaries by location, and the tanker industry by vessel type. Where sufficient data was available, oil major and commodity groups remained the highest payers of operations staff globally – particularly noticeable at professional level where salaries are, on average, more than double those paid by shipmanagers.

Inconsistent bonuses

Last year’s bonus forecasts suggested a decrease in the number of bonus payments for commercial operations staff this year, so any reductions cannot be purely attributed to the effects of COVID.  While the overall number of bonuses issued has actually remained largely consistent, the size of those bonuses has not. Norway has shown the most noticeable decrease, with zero median bonus payments at all reportable levels. In contrast, Denmark, has reported some of the largest increases in bonus pay.

Tanker bonuses have decreased across each job level, compared to dry bulk bonuses that have increased quite significantly for some. The overall results show tanker bonuses still generally outperforming those paid to dry bulk staff, but the levels are much more closely aligned this year.

If you would like to find out more by joining the Maritime HR Association, please get in touch via [email protected].

“2020 has undoubtedly been a year of uncertainty for us all – the coronavirus has had a massive impact on the market, and we have seen the sharpest economic trade decline in over 35 years. The impact on the different shipping sectors has varied, but the general outlook remains uncertain and many in the industry are firefighting and keeping very tight control of costs.” – Phil Parry, Chairman, Spinnaker

Spinnaker published the 2020 salary benchmarking findings for shore-based roles last October, and now Spinnaker’s Maritime HR Association team have turned their attention to their more in-depth market analysis. Chairman Phil Parry has compiled a foreword to the job family specific reports, providing an economic overview of the general shipping market – with special thanks to Stephen Gordon at Clarksons Research for his valuable insights. Considering pay and people impacts, environmental regulations, financing and the Covid-19 economy, key points from this report include:

• Prior to the pandemic, average forecasts for world economic growth (GDP) were at just over 3%. Those forecasts have steadily declined and bottomed out at around -5%. In China specifically, where growth was forecast at 6%, the expectation is for less than 2% growth going forward. And in terms of world seaborne trade, 2021 is looking like a year of zero growth.
• In March, April and May queues into ports caused massive congestion and delays and consequential costs and legal disputes. Crew changes have of course been very difficult this year; in addition to the social and welfare costs to seafarers and their families, on-boarding costs have increased three-fold in some cases with flights home increasing by nearly 50% alone.  
• Covid-19 aside, the megatrend that is impacting the industry is rapid decarbonisation to meet the 50% target reduction in total annual greenhouse gas (GHG) emissions by 2050. According to the IMO, this equates to approximately 85% CO₂ reduction per ship.
• The financial landscape is changing with it. The introduction of the Poseidon Principles is helping to align ship finance with society’s decarbonisation goals and, quite separately, the source of capital and styles of lending (leasing deals vs traditional mortgage lending) are vastly different from the pre-recession landscape.
• The offshore wind sector continues to grow at more than 24% per year, providing potential opportunities for wider maritime industries. Other good news (it’s all relative!) is that compared with other forms of transportation, deep sea cargo shipping suffered a drop in activity (measured by the number of port calls) of “only” 10% in 2020.  This is compared to air cargo which fell by a third, while sadly we saw cruise and passenger shipping disappearing almost entirely.

If you would like more information on which to base your people decisions for the year(s) ahead through receipt of this members-only report – please get in touch by emailing the benchmarking team via [email protected].

Right now, maritime businesses are having to make some very big people decisions, and these are likely to continue into 2021 and beyond. Not only do companies need to identify who their business-critical employees are, but also ensure they keep the talent they need to enable them to weather this storm and drive the business forward once economies stabilise.

Effective pay strategies are key in achieving this. Paying more than you need to is not a luxury many can afford, but paying too little can bear a much higher price.

Spinnaker has been providing maritime-specific shore-based salary and bonus information through the Maritime HR Association since 2005. As the only global provider of such information, the Association has built up a membership of some of the biggest and most recognised companies in the industry. 

Here’s what some of our members have to say about the Association:

Donna Price, Global HR Business Partner at Stolt Tankers, the world’s largest fleet of chemical tankers, and founding member of the Association tells us “We have found it a true benefit over time to be part of the Maritime HR Association. The shared experience within the maritime sector is second to none.”

Lucie-Marie Gaultier, VP Global Talent at Canadian giant Fednav finds the benchmarking particularly useful due to the global reach of the data.  She states “Subscribing to the Maritime HR Association has provided us over the last six years with invaluable information.  We have offices spread over all the world and having reliable data for each country ensures we have a consistent approach in all of our offices which is key in attracting and retaining key talent.”

As well as the annual salary survey reports, members of the Association also receive supporting market analysis reports – providing an overview of industry trends, year on year comparisons and topical points including gender diversity.

The 15th member conference, usually held in May each year, was cancelled in 2020 for obvious reasons. However, once restrictions are lifted members will get the chance to network once again at this increasingly popular maritime HR event. No doubt there will be an underlying theme of lessons learnt and new people practices arising from the pandemic…

Pal Egeland, Head of HR of global carrier Saga Welco is a regular attendee who tells us he finds the event a “Great meeting place for HR executives within the maritime sector. Important networking, profiled speakers and relevant topics are discussed in a warm and friendly setting.”

If you would like to access any of these services, please get in touch. The 2020 salary reports have just been published, so why delay?  

t: +44 (0) 1702 595 302

e: [email protected]

With a year like 2020, and the knock-on effect of COVID-19 on businesses, it’s no wonder that there is a modest outlook for pay awards over the next twelve months, with in many cases no increases at all.

For many HR departments, the financial recovery from COVID-19 will be having an impact on pay forecasts for the foreseeable future. According to XpertHR, the forecast pay rise for 2021 is 1%, but of course will be 0% in some sectors. In their Pay planning for 2021 report, XpertHR also said that the most common downwards pressure on pay in 2021 (with almost 42% of businesses stating this factor) has been company performance or ability to pay.

24% of businesses stated Brexit uncertainty would also be having an impact on pay awards in 2021, and 30% said they were facing an inability to raise prices of their products or services.

The pandemic has put additional pressure on businesses to conduct cost-containment measures, while not necessarily being able to match offers from competitors – and when the job market does improve, how quickly will businesses be able to respond to pay pressure?

Sarah Hutley, Reward Analyst for Spinnaker, says “When money is tight, businesses are under more pressure than ever to make every penny available for pay increases count. Retaining business critical staff by offering fair pay for the job is key – as is motivating and rewarding staff who go the extra mile during these difficult times.”

“It’s also a huge opportunity to consider how salaries fit as part of a broader, total reward package too – investigating non-financial rewards that can otherwise be overlooked and undervalued.”

Spinnaker produce shore-based salary and seagoing wage reports, and is currently conducting pay increase prediction research via its salary benchmarking department which covers both shore-based and seagoing wages. Look out for announcements when we are able to share these insights with our network.

If you’d like to know more about reward, salaries, and how we can help your business navigate these waters, contact Sarah Hutley at [email protected].

Technical staff are paid, on average 12% higher than their marine counter parts

4,826 employees were reported in the Technical and Marine, Safety & Quality job family which accounts for 16% if all incumbents reported in the 2019 shore based salary survey from Spinnaker.

Technical Superintendents were the third most reported code in the Maritime HR Association salary survey overall and technical staff account for 56% of the job family. Senior professionals are the most reported in the job family making up 39%.

Only 14% of employees were female.  1% were reported at Head of / Director level and 67% were reported working at Junior / Trainee level.

On average, technical staff are paid 12% higher than their marine counter parts apart from at a Junior / Trainee level where marine staff report a higher median.  The US and Hong Kong are the highest paying countries consistently across all levels.

Denmark are the highest payers in Europe when it comes to bonuses and total compensation packages at all levels.

In Europe, Singapore and the USA, median base salaries for Marine Superintendents has slightly decreased whereas in the U.K. they have remained steady.  Comparing that to Technical Superintendents, the median pay has increased when looking at the U.K, Singapore and the USA but like Marine Superintendents there has been a minimal decrease in Europe. 

Since 2005, Spinnaker has provided the most comprehensive and reliable worldwide annual survey of shore-based salaries in the shipping industry.

To find out more about Spinnaker’s salary benchmarking for both shore based jobs and seafarer wage costs, contact our benchmarking team at [email protected].