2012 IndustryWeek Salary Survey: Welcome Back, Raises

2012 IndustryWeek Salary Survey: Welcome Back, Raises

Pay increases return in the 2012 IndustryWeek Salary Survey. Even more, data reveal a remedy for the manufacturing talent shortage -- and it's within your own four walls.

Oh, what a difference two years makes. When IndustryWeek last investigated the salaries being earned by manufacturing management -- back in 2010 -- base earnings were static at the very least and on a downward trend for a fifth of the population who responded to our inquiries. Fewer than 30% saw their salaries grow.

In 2012 the tide has turned. In response to our recent inquiries about cash compensation, fully two-thirds of our manufacturing managers who responded to the 2012 IndustryWeek Salary Survey reported receiving raises over the past year -- well over double the percentage reporting a salary boost in the previous survey. Only 3% saw their base earnings decline, and yes, for about a third, base salaries were frozen.

An improving U.S. manufacturing landscape is clearly a factor in manufacturing management's improving salary fortunes. In February the U.S. manufacturing sector had expanded for the 30th consecutive month, according to the Institute for Supply Management's PMI.

See Also:

Charts and Tables: The data behind the 2012 IndustryWeek Salary Survey

2012 IW Salary Survey: Readers Sound Off

And while the economy still ranks high among the biggest challenges facing manufacturers today, it has faded back into a pack that is increasingly being populated by the skilled-worker shortage.

Wrote one manager in the product-development arena: "Many of today's workers do not have the technical skills that the jobs require. Although jobs may be available, it is difficult to match potential employees to these jobs. With today's fast pace, employers need skilled workers coming in the door. They don't have time to train in order to meet narrow windows of opportunity for business."

Interestingly, data from the 2012 salary survey suggest that a partial solution to the talent shortage may be closer than you think -- indeed within your company's own four walls. We'll explore the talent shortage issue further, but first a quick look at some hard data from the 2012 survey. More than 900 subscribers participated in the effort.

Manufacturing managers earned an average salary of $99,643, while the median was $86,000. Both figures represent slight increases from IndustryWeek's last salary survey, in which the average was $98,120 and the median was $81,000. It is reasonable to assume that for a percentage of manufacturing managers, their salary boosts may merely be recouping dollars lost in previous years' downturns.

In addition, approximately 57% of respondents report receiving a bonus -- typically variable rather than a discrete amount -- in addition to their base salary. The bonuses can be substantial.

Among manufacturing-industry verticals, managers in apparel and textiles earned the highest base wage, at $119,133. The paper, printing and publishing vertical earned the lowest, at $87,708. It also elicited several of the most painful comments from survey respondents. For example: "As a company, there have been no raises for six years, two pay cuts and numerous downsizings. In January [2012], the plant will be closing for good after 40 years of operation. One-hundred-fifty people will lose their jobs, and I personally have no desire to stay in commercial printing after 35 years and incredible stress," wrote a production manager with 26 years of experience and earning $90,000.

Why Manufacturing is Great -- and Awful?


What are IndustryWeek's readers saying about the state of U.S. manufacturing and their jobs? Here is some of the positive and the negative.

"I am compensated well for my services. I work for a company that recognizes key employees and rewards them for their skills and abilities." manufacturing/production manager in the medical devices/lab equipment industry with 26-plus years of experience, living in the Middle Atlantic region and earning $63,000

"I work for a privately held, family-owned business that has been in operation since 1877. It is a blessing after working for a private-equity-based organization for 25 years." director of manufacturing/production in the automotive/transportation vehicles and equipment industry with 26-plus years of experience, living in the North Central region and earning $115,000

"It's all good." environmental, health and safety manager in the metals industry with 26-plus years of experience, living in the Mountain region and earning $81,000

"Aerospace industry is doing very well." financial manager/controller in the aerospace and defense industry with 26-plus years of experience, living in the Middle Atlantic region and earning $126,500

"145-year old-company just purchased by a company with no manufacturing background. Interesting transition. They are committed to making a cultural change and necessary financial investments. Positive outlook for the future." sales and marketing manager in the paper/printing/publishing industry with 26-plus years of experience, living in the North Central region and earning $86,000

"It is unfortunate that the worldwide recession was used as a way to punish employees, when most of these people really stepped up and contributed substantially to their company's survival." engineering manager in the industrial machinery industry with 26-plus years of experience, living in the North Central region and earning $114,000

"I work for a small company, and they say they can't compete with larger-company salaries and benefits. This is related to our company's ability to land new work. The company keeps reducing our benefits and doesn't give out any bonuses. But we keep breaking company sales records." director, purchasing/procurement/sourcing in the metals industry with 26-plus years of experience, living in the North Central region and earning $54,080

"My company is going through a growth period, and 50% to 60% of all new hires are released within the first few months. There is a high unemployment rate in this country, but what percent of that is made up of people who are not employable? There is talk of 'reshoring,' but will this country have the available resources for the returning work? As a manufacturing manager, it is scary." operations manager in the automotive/transportation vehicles and equipment industry with 26-plus years of experience, living in the North Central region and earning $62,000

"Lost my job twice and start at the bottom each time; big step backwards in salary." quality manager in the pharmaceuticals/health care industry with 26-plus years of experience, living in the Middle Atlantic region and earning $60,000

"In a smaller company, I feel somewhat underpaid for my knowledge, experience and contributions, but I have great satisfaction in my ability to positively impact the operations." supply chain/logistics manager in the chemicals industry with 11 to 15 years of experience, living in the North Central region and earning $78,000

"My geographic requirements limit my opportunities or I would likely be moving on to another position." lean/continuous improvement manager in the metals industry with 21 to 25 years of experience, living in the North Central region and earning $88,000

Bullish on Manufacturing Careers

By many reports, the popular perception of manufacturing by non-manufacturers is that of an industry that is dirty, in decline and not providing a career path worth pursuing. Given both the skilled-worker shortage at the direct-labor level and the increasing age of manufacturing managers, clearly that perception is having an impact on the U.S. manufacturing workforce.

The 2012 IndustryWeek Salary Survey presents a different message.

If the U.S. manufacturing industry is suffering from a dearth of young people who want to pursue it as a career path, the remedy may be the very people already engaged in its pursuit. As a whole, they derive much satisfaction from their profession.

"Manufacturing is a great place for bright people of all education levels to make a very good living. We just need to win the PR battle," says a vice president of operations in the automotive/transportation vehicles and equipment industry. He has 21 to 25 years of experience in manufacturing, lives in the North Central region of the United States and earns a base salary of $170,000.

"I would not be here if I did not love manufacturing," adds an operations manager in the aerospace and defense industry. He has been a manufacturing professional for more than 26 years and earns a base salary of $96,000.

These are among the 35% of survey respondents who say they are "very satisfied" with manufacturing as a career path. Add to that number the 49% of survey respondents who said they are "satisfied" with manufacturing as a career, and the reality is that most of those who "do" manufacturing seem to enjoy manufacturing.

"I love manufacturing. I think it's a great career and can be a very promising career path," says Gregg Goodner, president of Hytrol Conveyor Co., Jonesboro, Ark., a manufacturer of conveying systems, and a strong proponent of lean manufacturing. On the other hand, he says, "It is getting a little tough to attract young people." He counters that by offering such benefits as an on-site health club and a medical facility manned several days a week by a nurse practitioner.

The high level of satisfaction among manufacturing professionals doesn't surprise Mark Tomlinson. He is an engineer by training, a past manufacturing practitioner and currently the executive director of the Society of Manufacturing Engineers.

"Manufacturing managers are problem-solvers. There's a high degree of satisfaction that comes from solving problems," he says.

Lean Manufacturing Boosts Satisfaction

Boosting that level of satisfaction, he believes, is the introduction of lean manufacturing concepts into U.S. manufacturing. At its core, lean is about maximizing customer value with fewer resources, in the words of the Lean Enterprise Institute. It is about optimizing value streams and ensuring that every person who touches those value streams is engaged in continuously improving them.

Keys to a lean transformation are teamwork and process improvement. "In my mind, these raise the level of [job] satisfaction," Tomlinson says.

Furthermore, he says, "Manufacturing is an industry that is constantly changing -- the types of products, processes, engaging new customers. It never really becomes mundane as a job."

That said, when asked what matters most about their job, salary-survey respondents were most likely to identify job stability (28%) and base salary (22%). But if you believe the return of salary increases is responsible for the high level of career satisfaction among manufacturing management who responded to ?IndustryWeek's survey, think again. It has been consistently high since 2007, even as the U.S. manufacturing economy faltered.

Kennametal CEO Carlos Cardoso is among manufacturers who are spreading the word about the good things happening in manufacturing and has challenged other manufacturing company executives to do the same. He recently shared his concerns about the lack of young talent entering manufacturing at a National Press Club event and more recently with IndustryWeek in its February issue.

"The fact that parents don't encourage their kids to get into manufacturing, the fact that at the K-12 educational level, manufacturing is not seen as a career option, for instance, is surprising to me," said Cardoso. "Because at the end of the day, I truly believe that manufacturing jobs equal middle class."

On the Job

IndustryWeek readers tell us they are overworked, on the go, appreciated and not appreciated. Here is what they have to say.

"Current job requires portability; always on the move. Office is in laptop." engineering manager in the industrial machinery industry with 26-plus years of experience, living in the North Central region and earning $111,000

"Work is finally breaking loose, but it is a real battle to find people who want to learn and stick with it." operations manager in the metals industry with 26-plus years of experience, living in the New England region and earning $110,000

"Too much work, not enough time to create new systems." engineering manager in the metals industry with 16 to 20 years of experience, living in the Mountain region and earning $60,000

"Although I am very satisfied with my salary, I find it difficult to manage my somewhat heavy workload, and management has made it known that adding more personnel to help in this regard is not currently an option. In jumping from one urgent task to the next, some do not get as much attention as they deserve or as I would like." environmental, health and safety manager in the petroleum and coal industry with 16 to 20 years of experience, living in the Mountain region and earning $92,000

"As most people do nowadays, I wear multiple hats and have an enormous responsibility. My pay is not commensurate with the accountability." quality manager in the metals industry with 26-plus years of experience, living in the South Atlantic region and earning $69,500

"Enjoyed the diverse opportunities I have had in my job to work in different countries, different projects. Especially enjoy the mix of supplier development and some equipment-design work that I am able to do." engineering manager in the petroleum and coal industry with 26-plus years of experience, living in the South Central region and earning $164,000

"Our company is in a small town; it is difficult to find people to work. My biggest challenge is to keep the plant manned." human resources manager in the plastics and rubber products industry with 16 to 20 years of experience, living in the South Central region and earning $53,000

Engage the Young with the Young

Career satisfaction is an enticing message to spread about manufacturing. It also presents a challenge, says the SME's Tomlinson. The message must be multigenerational, not delivered solely by older, white males "like me," Tomlinson says.

A younger population within manufacturing is difficult to find, at least according to IndustryWeek's 2012 salary survey. The profile of the average salary-survey respondent is overwhelmingly male and white, age 50 or more, and with 26-plus years of experience in manufacturing. While the skew toward older respondents can be explained in part by experience typically being a requirement for management-level positions, attracting younger talent requires messaging from younger talent, Tomlinson suggests.

"We need to get some positive messages from the 32-year-old in the first tier of management, or running their first [work] cell," Tomlinson says. "Those are the kinds of messages we need to get out."

The Society of Manufacturing Engineers is aiding the messaging effort. The SME's Education Foundation, for example, recently has partnered with the Edge Factor (www.edgefactor.com), a video series designed to both change the public perception of manufacturing and attract new talent into the field by showcasing "real people using extreme technology to create the world we see all around us." For example, one episode highlighted Center Rock Inc., whose technology was used to reach the trapped miners in the 2010 Chilean mine disaster.

A message to attract younger talent is one that can't be sent, or heard, soon enough. Not only are IW's survey respondents saying it, they also are showing it. To wit: only 11% of IW's 2012 survey respondents are 39 years old or younger, and just 2% are 21 to 29 years old. Even more worrisome, both figures are down from the 2010 survey, when 15% were 39 or younger, and 3% were 21 to 29 years old.

The Talent Trap


Many salary-survey respondents can't find talented employees. Others are challenged to retain them.

"Manufacturing has a non-appealing image to young people." manufacturing/production manager in the industrial machinery industry with 26-plus years of experience, living in the South Central region and earning $108,000

"Younger engineers are less 'practical' than my generation. We worked on cars -- they don't/can't. They are almost afraid to take apart a leaking pump to determine what happened to it." engineering manager in the consumer goods/durables industry with 26-plus years of experience, living in the Middle Atlantic region and earning $165,000

"The manufacturing industry needs to increase employee benefits, which will help in attracting and keeping quality individuals (it potentially will encourage the youth of tomorrow to be employed in this sector). This will lead those companies to success in the future. The manufacturing sector HAS to tell their story of importance to the U.S. economy. They have sat idle too long! Finally the sector HAS to convey the importance of technical/trade skills to the schools and government. The U.S. is looking at a huge skilled-labor shortage that needs to be looked upon as an opportunity to invest in the future success of manufacturing within the U.S.A. The educational system needs to invest in technical programs with the knowledge that the manufacturing industry will be there supporting those programs." purchasing/procurement/sourcing manager in the metals industry with 16 to 20 years of experience, living in the Pacific region and earning $46,000

"Challenge is retaining talent. Flat, geographically dispersed, functional organizations make it challenging to create opportunities for high performers to stretch and grow." sales/marketing manager in the automotive/transportation vehicles and equipment industry with 26-plus years of experience, living in the North Central region and earning $210,000

Methodology
The IndustryWeek 2012 Salary Survey was conducted online via e-mailed invitations to subscribers. The survey took place in December 2011-January 2012. A total of 1,001 people responded to the survey. After the data were cleaned (removing non-U.S. manufacturers or largely incomplete surveys, primarily), 906 people turned in completed responses from the 2012 survey. Respondents were not compensated but were offered the chance to provide candid comments regarding their salaries, occupations and employers. The candid comments may have been lightly edited, primarily for spelling. All responses were anonymous.

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