2010 Plant Engineering Salary Survey
As the economy improves, manufacturers still face skilled worker shortage. The worst manufacturing decline in 80 years may be over, according to readers of Plant Engineering magazine, but the challenges facing manufacturing continue.
Primary among those concerns is a familiar issue – the lack of an available skilled workforce. The 2010 Plant Engineering Salary Survey paints a brighter picture of manufacturing as viewed from the plant floor. A total of 56% of readers feel the recession is over, and 36% of respondents said they already see growth in their plants. That’s up dramatically from 2009, where just 19% saw growth after the recession. To continue that momentum, plant managers said they need skilled workers.
Survey respondents again cited a lack of a skilled workforce as their top challenge in the coming year, with 23% declaring it the top issue they face. Since Plant Engineering began asking that questions five years ago, the skilled workforce issue was not the top concern only once – in 2009’s Survey, when it was the economy.
Dollars and sense
The 2010 Salary Survey saw a slight bump back up in total compensation and a continuation of bonus compensation being a significant part of that package. Base salary plus bonus increased from $101,919 in 2009 to $102,035, driven primarily by an increase in bonus compensation. In 2009, bonuses were 13.7% of the total salary; in 2010, that percentage jumped to 16.7%, the highest level since 2007.
In 2010, 73% of plant managers received some kind of bonus, and 38% receive a bonus of $10,000 or more. While company profitability was by far the largest driver of bonuses, extra compensation also was awarded for plant productivity, safety and other KPIs. Just 14% of plant managers received some kind of bonus for energy efficiency. All those figures were on a par with 2009 data. Plant managers also saw a greater chance their salaries would continue to grow in 2011.
Of the total respondents, 64% saw some kind of increase for the year, and 54% said it would be between 1% and 3% of base salary. A year ago, just 50% projected any increase and 9% saw a decline in salary. The regional changes in salaries were also worth noting. In the Mountain Region between the plains and the Pacific states, the 2009 trend of salary decline was more like falling off a mountain. In 2009, Mountain region salaries fell from $106,000 to just under $99,000, but still were the highest in the nation.
In 2010, the average salary fell to just under $79,000 – the lowest of any region in the nation. The beneficiary of that decline appears to be the Pacific and North Central regions, which both saw an increase in salaries. The Pacific region salaries rose from $91,000 in 2009 to $92,424, now the nation’s highest regional total. The North Central region was up the highest percentage, up almost 6% to $88,344.
As usual, education and experience play the greatest role in compensation. The plant manager’s role, by whatever title he’s given, is an experienced worker with more than 20 years on the job and an educational background that supports his experience. A plant manager with a master’s degree will make on average almost 29% more than a similar worker without a college degree. Those with More than 30 years on the job will expect to make on average 24% more than someone with 1-4 years experience.
The exception, for the third year in a row, is a newly-hired worker within an organization. That person will make on average 7.4% more than a similar worker with 1-4 years experience. This again points to the difficulty in finding skilled workers for manufacturing, and again points to the single biggest concern a plant manager faces today.
The skilled worker shortage
The impact of an aging workforce also has been felt at the management level. While the plant manager is both highly educated and experienced, the average age crept up to 52 this year, and has steadily increased in the last six years of the survey. More than 60% of the respondents are over the age of 50, and almost one-fifth are over 60. The effect of a hiring slowdown creates other issues in the organization. “We don't pay. We get what we pay for.
Therefore, I have a maintenance crew that we picked up off the street for $10 an hour and put tools in their hands. Then we wonder why management is always under the equipment working on it,” said one respondent. “Our company does not believe in paying people and cannot be convinced they should.” “The MBA mentality (is) delaying badly needed plant improvements resulting in unacceptable downtime,” said another respondent. “If we can get the investments we are promised, when we are promised them, we will be able to better maintain the plant and increase profitability.”
Both the experience and the size of the staff is an issue, according to readers: “The Engineering Staff has been cut to the point that we are no longer making good decisions for the future of the plant,” said one reader. “An early buyout program has depleted a large brain trust of maintenance knowledge,” said another reader. “In our area, the level of expertise we are attracting with our latest offers for employment is well below what we are accustomed to. In other words, it's slim pickings around here for what we are willing to pay.”
Foreign competition – both in terms of job outsourcing and global competition – is a major issue on the mind of plant managers. But the concerns revolve around competitive issues and not just the job loss itself. “Downsizing industry-wide will affect the price, quality and availability of parts and materials needed to sustain our facilities,” said one manager. “This will in turn increase our dependence on foreign-made materials which generally are less likely to provide a safe and productive work environment.” “Allowing American companies to close factories in the US and open overseas manufacturing operations with no penalty – If a company wants to sell product in the US, they should have to meet our environmental and labor laws,” added another. “Make the playing field equal and the American worker will outperform anyone.”
Security, satisfaction, social media
Perhaps that attitude points to another consistent message within the salary survey. Despite all the changes and the challenges in manufacturing, Plant Engineering readers continue to be satisfied with their careers secure in their jobs and of their workers and are satisfied with both their compensation, the technical challenges of manufacturing and their sense of accomplishment. Those three areas are again cited by readers as their top areas of job satisfaction.
Even at the deepest parts of the two-year recession, more than 60% of Plant Engineering readers felt their jobs and those of their workers were secure. That security took a huge leap forward in 2010, with 66% of respondents saying manufacturing was a secure career. That was up from 62% in 2009 and higher than 2008’s 61% total. On the issue of individual job security, 73% of plant managers said their job was secure, up from 67% a year ago.
They also saw their employees’ jobs as secure with a 71% confidence rating in 2010, up almost 15% from the 2009 total of 62%. Yet job security doesn’t make the top 3 reasons for personal job satisfaction. The salary, a feeling of accomplishment and the technical challenges of manufacturing were cited as the top drivers of job satisfaction for readers.
For the first time, Plant Engineering asked about the use and usefulness of social media on the job, and found that few readers embrace social media as a viable business tool. Just 10% use it on the job, and only 33% use it on a social basis away from the job. “The venue isn't useful for business,” one reader noted. “Internet is useful for research and current events. Intranet is the only useful interactive business tool.”