2006 Compensation Study: What I make

According to FSD’s annual Compensation Study, salaries rose just 1.9% last year across the board. But not many in the business think they’ll be in their current position five years from now.

From: pat <[email protected]>

Date: Tuesday, 2:19 p.m.
January 2, 2007
To: My best friend
Subject: What am I doing?

I just had my review—and I'm getting the same puny raise I got last year: 2%. What an insult—despite the fact that meal volume increased again! I just don't know how much longer I can keep at this. We need the money!

This e-mail between 40-somethings is obviously fictitious, but might very well be true for any number of non-commercial foodservice directors. Salary increases during 2006 trailed the pace of those in 2005. As usual, more money comes from doing more work.

Salaries for non-commercial foodservice directors rose just 1.9% last year, according to FSD’s annual Compensation Study, following a 4.7% boost the year prior. The average salary for 2006 was $53,802, up from $52,774.

If directors are frustrated at this lack of growth, they’d have good reason—because the study shows that nearly 30% of them are managing a larger workforce; three-quarters are wrestling with higher food costs; and a bit more than one-third say capital spending is on the rise, meaning renovations and new construction are eating up their time.

On top of that, meal volume increased for the second straight year for operators in all segments except healthcare. Is it any wonder, then, that precisely one-third of them say they’ll be retired in five years? That 15% figure on being promoted? That just 14% believe they’ll be in their current position?

Tipping point? Results from a related FSD survey suggest that situation may have more dire consequences, namely in the form of an exodus from the marketplace. When asked if they’d consider leaving the non-commercial foodservice industry in order to increase their compensation packages, 36% of operators in all segments surveyed said “yes.” The highest percentages of individual segments giving that response was Colleges & Universities (42%), Hospitals (36%) and Nursing Homes (34%), with B&I and Schools each coming in at 28%.

Where would they go? By and large, their write-in responses indicate they’d stay in foodservice and hospitality, including hotels, foodservice distribution, food safety, restaurants, sports venues, fast/casual restaurants and catering. Some cited “Anything but foodservice” or words to that effect, but there were very few mentions of non-food-related industries such as pharmaceuticals, finance, politics, information technology or education.

Paying dues: Can higher pay possibly forestall such a scenario? One way to earn more money is to do more work, conventional wisdom dictates, and rewards seem imminent for those sticking it out. According to FSD’s study, meal volume has a direct correlation to compensation, despite last year’s low raise performance. Half of survey respondents who oversee daily meal production of 5,000 or more earn $80,000-plus a year. Salaries are also higher among those who oversee large staffs: 74% of those making $80,000 or more have a minimum staff size of 50.

In addition, putting in your years yields definite results. Those earning $80,000 or more have an average of 13.6 years invested in their current position, on top of nearly 30 years in foodservice. Not surprisingly, average salaries are highest among those between the ages of 51 and 60 ($57,421).

The gender gap: In non-commercial foodservice, the “gender gap”—the difference between the average salaries for men and women in the director’s position—closed somewhat. The average salary for men this year was $60,854, while it was $49,457 for women. That means women earn 19% less (or, men make 23% more, on average). Salary increases for men and women were roughly similar: 1.8% and 2.1%, respectively.

By market segment, salaries were highest in colleges, though the largest increase, 13.2%, occurred in B&I. Salaries in both hospitals and nursing homes/long-term care facilities decreased a bit compared to 2005 but are roughly similar to 2004 numbers.

In addition, directors working for contractors make nearly 10% more than their self-op counterparts, study results show.

Degrees pay off: Advanced degrees continue to pay off in foodservice. Eighteen percent of respondents holding graduate degrees earn more than $80,000 per year, the study shows, while only 12% of those with just a culinary certification are at that level.

Other statistics show that the average foodservice director is 49 years old, has been in the foodservice industry for just under 25 years and has held his or her current position for 10 years.

Hot jobs: A related FSD survey explored readers’ attitudes toward their own staffs—specifically those staff positions that directors feel will be the hardest to fill in the coming year. Results from that survey show that:

What they earn: As a companion to the FSD Compensation Study, editors examined some national average salaries for other industries:

Source: payscale.com; average of reported salary averages in select U.S. cities