Upward mobility

By every measure, manufacturing leaders continue to deliver high productivity even as total jobs in manufacturing continue to decline. Delivering that productivity is the daily job of the plant manager, and his compensation continues to be tied directly to meeting those productivity benchmarks.

Those are the clear findings of the 2007 Plant Engineering Salary Survey. More than 1,200 readers responded to this year’s survey, which paints a clear picture of an industry in transition, yet an industry where excellence is achieved and rewarded.

Several key trends continued in 2007:

• Base salaries continued a steady rise (1.9% in 2007 vs. 3.8% in 2006)

• Overall compensation rose 8.3% from $92,332 to $99,987 as bonus compensation increased 51% from $11,920 in 2006 to $17,967 in 2007.

• “Clearly, plant managers are rewarded for their productivity gains,” said Mark DiVito, director of research for Plant Engineering. “The emphasis on setting productivity goals and then rewarding managers for meeting them should continue. If productivity keeps increasing, then so should compensation.”

  Experienced sought and paid for

  Plant managers are experienced, well-educated leaders on the plant floor, and the greater that experience and education, the greater the compensation. A plant manager with a bachelor’s degree will earn on average $25,000 more than a manager without a college degree. There is a steady progression of compensation by age. Those managers over the age of 50, which is 60% of the whole group, earn on average more than $103,000 a year.

  Experience is sought by those companies looking to transition to a new plant manager, and the compensation for that experience is reflected in the Salary Survey. A year ago, plant managers with 1-4 years of experience were earning about 10% more than those with 5-9 years of experience. In 2007, the group with 5-9 years experience is earning significantly more than the 1-4 year group, and about 6% more than the 10-19 year group. Compensation also jumped for the managers with more than 20 years experience, indicating senior management paid to attract or retain experienced managers.

  Perhaps the most dramatic figure showing the wage increases occurring in the field is found in those managers who have worked for their current employer less than a year. That manager earns on average more than $96,000 a year, or 14% more than a manager with 1-4 years with the current employer. While 24% of plant managers have more than 20 years with the same company, 28% have four years or less with their company.

  As in past years, there are differences in compensation based on the region of the country and the products produced in the plant. While total compensation in the North Central, Midwest, Mountain and Pacific regions were flat to slightly lower, compensation in the Northeast, Southeast and Southwest regions were sharply higher. Total compensation in the Southeast rose almost 20% in 2007 to just over $105,000 a year, which matches the trend toward locating more manufacturing plants in the region.

  The food, pharmaceutical and petrochemical industry are three of the fastest growing manufacturing sectors in the U.S., and compensation in those fields continues to increase at the same pace. The petroleum plant managers’ compensation is up 6% to more than $123,000 and beverage and tobacco manufacturers saw a 5.5% compensation increase in 2007. Another rapid-growth market in salaries is the paper industry, which saw manager salaries jump 14% to almost $114,000, the third highest average compensation in any industry.

  Manufacturing pulse

  Despite the speculations from pundits and commentators that issues such as China, immigration or energy costs are a drag in manufacturing, plant managers contend their biggest concern is a lack of a skilled workforce to continue those productivity gains. Asked in Plant Engineering’s exclusive Manufacturing Pulse section of the survey what the biggest threat their manufacturing business faces today, 43% said it was the lack of skilled workers. Just 8% cited global competition and only 4% said it was budget or financial pressures.

  Despite these pressures, plant managers have a decidedly upbeat view of their own industry and their own job security. In the Manufacturing Pulse section, 63% consider manufacturing a secure career, 72% consider their own jobs as secure, and 70% feel the same way about their employees’ job security.

  A year ago, plant managers accurately predicted a salary increase of between 1% and 3%, and for 2008, they see a similar trend. While 17% see an increase of 4% to 6% and 16% see no increase coming at all, 61% of respondents expect an increase of between 1% and 3%.

  Yet it is not just the money that drives plant managers. When asked what factors impact their job satisfaction, the first thing usually mentioned by plant managers is their feeling of accomplishment, followed by company benefits and advancement opportunities. When asked to rank three factors, 46% say a job well done is their biggest reward, followed by salary (36%), the technical challenge (25%), job security (24%) and employment benefits (24%). Those are the same five benefits as plant managers put at the top of their list a year ago.

  The skills they believe will be most important for the plant managers of the future are also the same as a year ago. Project management skills (71%) top the list, followed by computer skills (70%), team-building skills (62%) and communications skills (60%).

Do you have experience and expertise with the topics mentioned in this content? You should consider contributing to our CFE Media editorial team and getting the recognition you and your company deserve. Click here to start this process.