An end in sight?
There’s a light at the end of manufacturing’s long, dark tunnel. How well you can see it largely depends on where you are standing right now.
For the first time, the most compelling statistic that came out of Plant Engineering’s annual Salary Survey had nothing to do with salaries. The manufacturing recession was the topic that generated the most interesting response in this year’s Salary Survey, conducted in October 2009.
When asked how the recession had impacted their facility, 37% of plant managers surveyed said it was already over, with that group split over whether growth had started since the recession ended. Another 37% said the recession wasn’t quite over, but they saw an end coming soon. Only 26% said the recession was still in full force, with no end in sight.
Following the worst manufacturing slowdown since the Great Depression, it should come as no surprise that salaries and bonuses both fell in 2009. Salaries fell from $105,186 in 2008 to $101,919 in 2009, a drop of 3.2%. Bonus pay fell from $17,530 in 2008 to $13,995, a drop of just over 25%.
For the first time, survey respondents were asked about criteria for their bonus pay. More than 80% cited company profitability as the top criteria, which helps to explain why 28% received no bonus in 2009. Company profitability was cited by 53% of bonus recipients, with 42% being paid for hitting safety metrics, 38% for other KPIs and 18% being paid for hitting energy metrics.
Survey respondents don’t see a dramatic change in compensation into 2010. Just 10% see a salary increase of more than 3% in 2010, while 40% see a smaller increase coming and 41% see no change at all. In 2009, 24% expected no salary increase.
Despite the gloomy economic news of 2009, plant managers who responded to the annual survey remained generally upbeat about the state of manufacturing. They consider manufacturing a secure career at roughly the same rate as a year ago, with 62% saying manufacturing was a strong career choice vs. 63% a year ago. They also believe their own jobs and those of their employees are secure at almost identical rates from 2008.
Employment levels were not expected to change in 2010, with 65% of plant managers expecting the same staffing levels. The number of plants expecting a decrease dropped slightly, from 24% in 2008 to 19% in 2009.
Perhaps the most dramatic change in the 2009 Salary Survey was in the area of threats to their individual manufacturing business. Since Plant Engineering began asking this question five years ago, the clear winner has always been the lack of available skilled talent in manufacturing. In 2009, the effect of downsizing on productivity was cited by 19% of respondents.
When asked how the recession affected productivity, 39% saw a decrease of as much as 10% in productivity in the last year due to the recession, and 18% saw a decrease of more than 20%. There was as much as a 10% decrease in staffing in 56% of facilities represented in the Salary Survey. On the other hand, 1 in 4 plants saw an increase in productivity in the last year.
Among other issues facing plant managers, the Skills Gap was noted by 17% and government interference was pegged by 15%. That last figure is almost double the 8% in 2008, reflecting the change in the federal administration. The economy as a whole was cited by just 7%, which was down from the 2008 figure of 11%, perhaps due to the overall sense that the worst of the recession may well be over.
Salaries show sharp drops
In 2009, manufacturing management salaries dropped across all industries. Some of the sharpest cuts were in three of the bell weather industries %%MDASSML%% petroleum, chemicals and food. Petroleum is still the highest-paying industry, but salaries fell from $142,708 in 2008 to $108,540 in 2009. The chemical industry saw a drop from $118,629 in 2008 to $101,448 in 2009. Those were the only two industries with average salaries over $100,000; in 2008, there were seven manufacturing industries where salaries topped $100,000. In food, salaries fell from $125,818 a year ago to $87,200 this year.
Regional factors were not as pronounced as in past years. The Southeast and Southwest, which had been two of the stronger markets in past years, saw their average salaries drop more than 10% in 2009. The Mountain region , the fastest growing salary region in 2008, fell back to its previous levels in 2009. And the Midwest, which had been the home to the most critical job losses in 2008 and 2009, saw average salaries for plant managers plummet more than 14% in 2009.
As in past years, education and experience were the key factors in determining salary levels. Plant managers with at least a bachelor’s degree earned almost 19% more than those with an associate’s degree. Those with at least 10 years of experience in manufacturing earned about 20% more than those with four years experience.
The continuing trend of new hires coming into the market at a higher salary did continue in 2009. Those with less than a year’s experience on the job were earning about 7.5% more ($77,265 vs. $71,913) than those with at least a year on the job. This indicates that despite job losses, there is still a shortage of experienced workers to fill the management roles in manufacturing.
In quality field, salaries show slight rise
According to the American Society for Quality’s annual salary survey, the average quality job salary went up 3% from 2008 to 2009, to just under $84,000. Results show that respondents’ salaries increase as their experience in the quality field increases:
Quality professionals with more than 20 years of experience earned an average of $94,029.
Professionals with 10 to 20 years of experience earned on average $84,722.
Those with 10 or fewer years of experience earned on average $73,271.
Quality managers with more than 20 years of quality experience earn, on average, $4,657 more than managers with 10 to 20 years of quality experience and $10,095 more than managers with 10 or fewer years of quality experience.
The survey was conducted by Quality Progress (QP), ASQ’s monthly publication. Full results can be found on the QP Web site, www.qualityprogress.com .