2013 IW Salary Survey: Salaries Remain Upward Bound

It is all about forward momentum when it comes to salaries and pay raises for manufacturing management, according to the 2013 IndustryWeek Salary Survey. Or perhaps the better description is "upward momentum."

As a whole, the average salary for manufacturing management increased over the past year, and raises were the rule rather than the exception. Such findings are in line with the responses IndustryWeek received from its 2012 inquiry into the earnings of its management-level subscribers but a stark contrast to the dismal results of 2010, when salaries were static at best, down for a significant percentage of managers and pay raises were hard to come by.

The relative health of manufacturing in 2012 was surely a factor in the continued forward momentum of salaries. The manufacturing industry as a whole expanded in eight of the 12 months of 2012 and grew again in January and February 2013, according to the Institute for Supply Management. The overall economy grew for the 45th consecutive month in February.

Nevertheless, despite the gains in base pay, strong concerns remain among this group of manufacturers, most of whom are happy with their career choices and jobs. The talent crisis and lack of skilled workers have only increased as a worry since last year's survey, when they vied with the economy as the biggest challenge facing manufacturers. Remarked one survey respondent, a purchasing and procurement manager in the construction and building equipment industry: "We need to develop new talent. We have had three openings and cannot fill them with qualified candidates."

Government regulation has also moved to the forefront of challenges for many IW subscribers. For example, "Governments -- local and state and federal -- do everything they can to get in the way of cost-effective business growth," said a corporate executive in the metals industry. "If you look at the fees and restrictions on manufacturing 30 years ago compared to now, you see what the most difficult challenges are."

With that as a backdrop, let's look at the numbers from the 2013 IW Salary Survey: Manufacturing managers earned an average salary of $103,613, up nearly 4% over last year's survey and marking the first time the average has breached the $100,000 level since 2008, when managers earned an average of $105,581. In last year's survey, the average was $99,643. The median salary in the current survey is $93,250, compared with $86,000 last year.

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Who received raises? Fully 67% of IW subscribers reported that their base pay grew over the previous year; for 11% the increase exceeded 5%. At the other extreme, 5% actually saw their base pay decline.

Additionally, nearly 60% of the managers reported earning a bonus. The average bonus among manufacturers who earned a discrete amount (versus variable pay) was $25,000. However, bonuses varied wildly, from less than $1,000 to several hundred thousand dollars.

Individual Results May Vary

While base salaries rose for most manufacturing managers, the pay earned by individual verticals were as diverse as the products they produce. For example, managers in medical devices and lab equipment earned the highest base salary, at $118,328. At the other end of the spectrum, managers in the wood products and furniture industry earned the least, at $81,470.

For the second consecutive year, management in paper, printing and publishing -- who earned an average salary of $99,989 -- expressed concern about the future of their industry. "Salary has stalled out due to falling demand in print on paper as we convert to a digital world. We can't catch up to the falling demand with our cost structure, which means plant closures and job losses," wrote an operations manager in the paper, printing and publishing industry with 26-plus years of experience, living in the North Central region and earning $45,000.

Manufacturing managers in the aerospace and defense vertical earned an average salary of $110,180. One survey respondent predicted a very different future for his industry.

"The aviation industry is on the verge of major changes in how customers interface with their suppliers and sub-tier suppliers. While it may not be as extreme as the automotive industry, there will be considerable lessons-learned applications developed from the automotive industry," wrote a quality manager in the aerospace and defense industry with 26-plus years of experience, living in the North Central region and earning $105,000. "With outsourcing and system integration becoming the norm, supplier control will be a hot topic in aviation for many years. People who can operate in these changing environs will be in high demand."

Base salary also varies widely by factors other than industry sector. Manufacturing management is overwhelmingly male, at 93% of all survey respondents, and their pay is equally disproportionate compared with women: Males earned an average of $105,238, compared with $80,011 for women.

The ethnic make-up of manufacturing management also is overwhelming white/Caucasian. At 93% of the management population, they earned an average base salary of $103,932. Asian/Pacific Islanders, who represent 2% of the survey population, earned the highest average at $111,365, while black/African American managers, representing 1% of the survey populace, earned the least, at $85,333. Asian/Pacific Islanders also had the highest average salary in last year's salary; black/African American managers had the second highest.

Some Things Never Change

What has never changed among IW subscribers is the satisfaction manufacturing management attaches to their career choice and, with slightly less vigor, to their current job. Indeed, 85% of IW subscribers reported they were "satisfied" to "very satisfied" with manufacturing as a career.

Interestingly, the high level of career satisfaction is not a product of a good economy or pay raises. IW subscribers have remained steadily positive about manufacturing as a career choice even during difficult economic times and static pay.

"I have been very satisfied with my career in manufacturing. Both of my sons are pursuing careers in engineering and manufacturing," says the director of purchasing, procurement and sourcing in the electronics/high-tech/telecom equipment industry. He speaks from experience, having 21 to 25 years in manufacturing and earning $98,000.

The high level of satisfaction doesn't surprise Steve Clingan, president of family-owned Clingan Steel. He has 55 years of experience in the manufacturing industry. "There are a lot of opportunities. The problem with many jobs today in the service industry is they kind of grind you down. [In manufacturing] there are so many new things happening," he says. "That's true in almost everything we do in metal, which is my business."

A Sense of Accomplishment

"People involved in manufacturing absolutely love it. There's a sense of accomplishment every day," adds Herb Bradshaw, a former plant manager at 2005 IW Best Plants winner Thomas & Betts in Athens, Tenn.

The level of satisfaction expressed by manufacturing management -- not to mention the pay potential--begs the question: Why aren't more people entering manufacturing? Just 8% of the salary survey respondents are age 39 or less. Only 1% of the survey population is younger than 30.

The fact that management-level positions typically require some degree of experience explains the low percentages of younger managers, at least in part. But it has been spelled out clearly in the pages of IndustryWeek and elsewhere that skilled positions in manufacturing management and on the production floor are going unfilled.

"Manufacturing as a viable career path needs a better PR firm. It's not seen as an attractive option for most people," says the vice president of operations in the consumer goods/durables industry. He has 26-plus years of experience, lives in the Pacific region and earns $230,000.

Kevin J. Klapcic, owner of Midwest Machine Service, sees the challenges manufacturers have in finding skilled positions, particularly in equipment maintenance. In fact, his Cleveland firm benefits from it. While Midwest Machine builds some equipment, Klapcic earns a significant percentage of his income from rebuilding or assisting manufacturers who do not have the in-house talent to repair their machinery.

He can outline the required skill sets in his work. They include mechanical ability, as well as the ability to be both team player and a self-starter. He adds, "Troubleshooting and problem-solving skills. Those are huge."

Many manufacturers have either introduced or stepped up efforts to bridge that skills gap. The Raymond Corp. is one example. "As a manufacturer in the material handling business for almost 100 years, we've realized it's equally as important to help shape the talent pool entering the industry as it is to maintain it," says Chuck Pascarelli, president of sales and marketing. "The relationships we've established with engineering programs through local universities, colleges and tech schools have ensured high-quality talent at the gate. In some instances, we've even helped to shape the curriculum or create placement programs for these organizations. We also understand that learning doesn't stop there. We've made it a priority to offer exclusive training programs and continuing education for many of our employees."

As in previous years' surveys, most manufacturing management identified job stability and base salary as the factors that matter in their jobs. Fully 25% of IW subscribers identified job stability as their No. 1 concern.

That concern is echoed in a warning by a vice president of manufacturing: "The push to outsource manufacturing severely impacts job security, pay, bonuses and job opportunities within the manufacturing industries, which makes it a very undesirable career choice for young people. This is going to be a major problem for our country in the future as we lose our ability to manufacture the goods we need."

Methodology

The IndustryWeek 2013 Salary Survey was conducted online via e-mailed invitations to subscribers. The survey took place in November 2012-January 2013. A total of 909 people responded to the survey. After the data were cleaned (removing largely incomplete surveys and a handful of non-U.S. subscribers, primarily) 893 people turned in responses from the 2013 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.