2006 Salary Survey: Productivity delivers a bonus for plant floor managers

By every measure, American manufacturing plants are more productive than they have ever been. That productivity translates into efficiencies and cost-savings for manufacturing. Plant managers who achieved cost efficiencies in 2006 were rewarded with a record bonus, according to Plant Engineering's exclusive 2006 Salary Survey.
By Bob Vavra, Editor January 1, 2007

By every measure, American manufacturing plants are more productive than they have ever been. That productivity translates into efficiencies and cost-savings for manufacturing.

Click here to view graphs on pdf .

Plant managers who achieved cost efficiencies in 2006 were rewarded with a record bonus, according to Plant Engineering ‘s exclusive 2006 Salary Survey.

A year ago, more than 60% of Plant Engineering readers responded that they were expecting salaries to increase between 1% and 3%. They were pretty close. According to the 2006 data, base salaries increased from $77,470 to $80,411 or 3.8%. However, overall compensation jumped from $86,211 to a record $92,332, a 7.1% increase. Fueling the jump was an increase in bonuses and profit sharing paid to plant managers in 2006 %%MDASSML%% from an average of $8,751 in 2005 to an average of $11,920 last year.

“It appears that plant managers, plant engineers and foremen are being compensated for the levels of productivity they achieved in 2006,” said Mark DiVito, director of research for Plant Engineering . “After a drop in bonus compensation in 2005, which led to fairly flat salaries a year ago, the trend clearly is to raise compensation in line with performance.”

That increase in compensation cut across all measurements. Salaries for plant engineers jumped almost $5,000 from 2005 to $89,549. Experience mattered, as managers with 10 or more years experience topped $90,000 in salary and those with more than 20 years experience %%MDASSML%% which made up almost half of the respondents %%MDASSML%% nudged toward the $100,000 mark.

More than any other factor, educational levels determine the divide between well-compensated and very well-compensated. More than half of all respondents have at least a bachelor’s degree, and 17.5% have earned a master’s degree. Degreed plant managers earn more than $95,000 a year on average; those with associates degrees or less hover around $80,000 a year.

“I think that points to two things %%MDASSML%% the well-educated level of the plant floor work force, and the increasing complexity of the work they do,” said DiVito.

In the exclusive Plant Engineering Manufacturing Pulse survey, managers consider their jobs and their careers secure at roughly the same level as a year ago, with about 70% stating they believed they and their employees had secure jobs. While many respondents pointed to foreign competition as a major threat to their business, the lack of available skilled workers was by far the biggest threat cited, with more than 35% concerned about filling jobs.

Perhaps that was one reason starting salaries for plant management were up from $71,592 a year ago to $80,069 in this year’s survey.

As plant managers look to the future of manufacturing, they’ve said the next generation of workers will most need project management, computer, team-building and communications skills to succeed in the profession in the future. They also pointed to two encouraging signs about the nature of plant management. Of the respondents to this year’s survey, 76% said they were satisfied or very satisfied with their careers, and that a feeling of accomplishment %%MDASSML%% more than salary or any other factor %%MDASSML%% was the greatest reason for that job satisfaction.