A booming economy means better wages, more buying power and increased optimism, right?
Not necessarily.
According to responses from the 2018 IndustryWeek Salary Survey, the average salary for a manufacturing manager in the past year was $118,500—down about 6% from the previous year. By comparison, wage growth overall for private industry was 2.8% year-over-year at the end of the second quarter of 2018, according to the U.S. Bureau of Labor Statistics.
Still, satisfaction was high, with 69% of respondents saying they were “satisfied” or “very satisfied” with their current job (72% in 2017, 74% in 2015).
At the same time, manufacturing leaders bemoan the lack of skilled workers and the number of positions gone unfilled at their companies. Few are considering apprenticeship programs as a training option.
The Fine Print
We received more than 700 responses to our survey, conducted in spring 2018 online via e-mailed invitations to subscribers. Just over 600 managers, supervisors and executives completed the full questionnaire. Respondents were not compensated but were offered the chance to provide candid comments regarding their salaries, occupations and employers. All responses were anonymous.
By the Numbers
The highest-paid managerial position was vice president of manufacturing, with a salary of $187,100.
The largest companies (over $20 Billion) paid the highest salaries--$136,000, on average.
The medical device industry had the highest average salary, at $142,500. Apparel/textiles saw the biggest decrease in salaries (-29%), and petroleum/coal, the largest increase (22.5%).
Seniority paid off, with those with 26+ years experience earning the highest average salary: $127,500.
Manufacturing managers in the South Central United States earned the highest average salary, at $125,000. The lowest average salaries were in the southwest, at $104,000.
Pay and Perception
A stagnation in managerial pay—whether due to pressure from stockholders, wait-and-see attitudes from trade and political uncertainty, or an overabundance of caution left over from the Great Recession—did not go unremarked on by our respondents.
- Companies just don't give salary bumps anymore ... They just play games with performance evaluations and may or may not give you a bonus.
- Over the years, salaries have not moved upwards.
Some of respondents’ comments reflect a perception, at least, that people at the very top—owners, shareholders—are reaping all the rewards of the economic boom, while the rest see business as usual.
- I really like our corporation, but I think employees are weary of stockholders getting all the money when we do all the work with very little increase in pay.
- Unfortunately, we've had senior leaders make decisions against our core values, which destroyed the bonus plan for over 100 team members in our organization during 2017. Fortunately for those making the decisions, their salary was only enhanced, while others took the ding. Many team members noticed, and it sent a different message about our core values and whether they are shared.
For some managers, pay is an issue that has them looking elsewhere for work, either within or outside of manufacturing.
- Lack of salary increases has led to higher turnover as the economy improves and people leave for higher-paying or better-benefit positions.
- The salary affords a reasonable living. But, the new construction and new cars in this area make me think that a lot of people make more money for a lot less effort.
Bright Spot
Being paid well is important to our respondents, but it wasn’t the most important factor in their job satisfaction. Manufacturing managers thrive on problem-solving, human interaction, and hands-on work.
For our survey question, "What matters most to you about your job?" the most frequent answers were:
1. Challenging Work (158 responses)
2. Base Salary (93)
3. Job stability (87)
- I am constantly offered more money by headhunters, but I enjoy the creativity that my current job requires. I don't want to take a job where I design variations of one or two products.
- I love my job; I was hired right out of college. I wasn't even looking for a job at the time. An offer was given, I accepted, and here I am. What I still like is that I create items with my hands, using pencil and grid sheets for drawings, "L" squares and calibrated rules for measurements.
- I have been in operations roles, business development roles and senior leadership positions in electronics contract manufacturing since my college graduation in 1989. Salaries and job stability in this field have lagged most other professions, but I enjoy the professional challenges and comrades I’ve worked with. I sense that manufacturing is on a major upswing under the current administration, but it may be too late, as so few young people seem to have an interest in operations careers.
The Skills Gap Persists
Overwhelmingly, the No. 1 challenge for respondents was finding qualified people to fill positions. They also repeatedly mentioned issues with meeting government regulations and leadership struggling to understand technology and integrate it into operations.
For the question, "What is manufacturing’s greatest challenge?" the most frequent answers were:
1. Finding skilled labor: 262 responses
Concerns include:
- Lack of skilled help, due to our scholastic system preaching the need for a college degree for the last two generations of workers.
- Finding enough competent and qualified people to fill open positions, from the factory floor through engineering and middle management.
- With more of the older workforce retiring, one of the biggest challenges is being able to pass on the experience to younger workers.
2. Technology: 32 responses
Concerns include:
- Rapid changes to the value propositions driven by technology and competitive forces, in low-margin, formerly stable sectors.
- Transition to an electric vehicle platform. Rapidly changing technology [and the capital it requires], biasing competition to mega-suppliers.
3. (tie) Leadership lacking: 23 responses
- [We face] the same challenges that [management guru W. Edwards] Deming faced 50 years ago: getting management to understand the processes and tools they insist on are responsible for 80% of the production problems.
- [We need] leadership skills to deal with generational gaps.
- Companies are so anxious to increase profits that they keep creating changes without thinking them through before implementation. This often makes things worse. As a result, people are treated like pawns, and when management doesn't respect the employees, the employees become apathetic.
3. (tie) Foreign competition: 23 responses
Concerns include:
- Remaining competitive with the influx of foreign-made equipment.
- Decision-makers [not] understanding the risks of offshoring jobs and considering the comparable costs from purchase to sale versus considering cost into inventory.
5. Government regulations: 21 responses
- The manufacturing sector, like so many sectors, is facing increasing regulation and compliance measures. Everything from health and safety to waste management is surrounded in red tape. While it is undeniable some regulations are essential, other can be a massive burden to manufacturing companies – particularly when they vary from country to country.
Other challenges mentioned include aging infrastructure, inadequate compensation, rising costs of materials, inadequate resources devoted to safety and market/political uncertainty.
And …
- Nostalgia. The manufacturing of the '70s isn't coming back and we are better off for that, but we shouldn't cling to the nostalgia and miss the opportunities to embrace change.
- Having cool things to manufacture. Manufacturing, like any industry of knowledge workers, should follow Cynefin (a decision-making chart) and stay in the top two quadrants (Complex and Complicated vs. Obvious), or maybe even the bottom left (Chaotic).
- [Lack of] available time for preventative and predictive maintenance.
- Ensuring we have the right amount of work compared to the number of employees we have.
- Our senior executives don't understand planning and execution of the operations and supply chain management. Most of them are finance managers or engineers with no formal training in this emerging and challenging field.
Leaders Have Their Say
For our final question, we let respondents have the last word on their salary, job situation, the state of the manufacturing industry and professional challenges. They were an opinionated group, on topics ranging from the tariffs to who should educate our next generation of manufacturing workers in the job skills they'll need.
Better Vocational Training
- In order for U.S. manufacturing to thrive, we need local, state and federal changes to our education system to implement vocational programs in our schools starting in middle school. Our youth are being denied any insight into promising careers in manufacturing and are being sold on the four-year-degree path for success.
Things Are Looking Up
- Manufacturing has been under a "not in my backyard" and "dirty work" cloak for some time, and the current administration in the USA is changing that. I love manufacturing and the stability it brings to our economy. It's what grew this country, and it has to stay vibrant to support the lifestyles we all cherish. It provides a hands-on "I made that" pride in a workforce that becomes vibrant and innovative when supported.
- I believe the state of the manufacturing industry in the United States is the best it has been in years, with a very optimistic outlook in the future.
- It's nice to be able to say that after so many people predicted its demise in the ‘80s and ‘90s, that manufacturing in America is alive and well. I think that wage stagnation has created challenges for us, but with a robust economy and low unemployment, I am optimistic that we will see a change in the next few years. I am definitely opposed to tariffs and other protectionist policies as I see them as being extremely counter-productive to the long-term health of industry.
Faulty Supply Chain Thinking
- I just don't understand the reason our MBA programs don't emphasize on Operations and Supply Chain Management. Also, the Department of the Defense (DOD) has novel ways to design and execute logistics planning and execution to support the war-fighter on the battlefield. Why can't we adapt DOD's model for planning and execution of our operations and supply chains to achieve low cost, superior quality and on-time deliveries to customers? I just don't understand the rationale behind it!
- Product costs consist of raw materials, direct labor and overhead costs. When our senior executives want to reduce product costs, they always think about reducing the labor costs, and "maybe" raw materials cost. How about reducing the overhead costs (OC)? I don't hear much about the OC? Why is it so? I am so thankful to President Trump for forcing us to rethink these issues. We don't need to close down our factories and move them to Mexico or China anymore. We don't need to listen to the economists who don't know what they are talking about.
More training resources
- Training budgets continue to be cut. If we want to be the top whatever at our game, training should be a higher priority—sharpen the saw, learn new tech stuff, ‘cause what we run with now may be obsolete in five years or less.
Finally, our readers had some strong opinions on manufacturing's place in a changing world:
- There are a number of key challenges facing manufacturers. 1. Difficult to attract qualified candidates in most positions. 2. Too much government regulation is helping to make us uncompetitive when working on overseas projects. 3. Overall, I think the salary and benefits are good. 4. Too much over-analysis of financial numbers and decision-making by financial people who know nothing about the business and markets we serve.
- The USA manufacturing model is broken and since the 1980's has been a sliding ramp to zero; the next generation is not as energized about making anything, only playing on a PC/tablet or phone. If manufacturing survives in the USA, our entire vision of these roles will need to be overhauled not a sector level but as a nation, from elementary to colleges. The country should be focused on manufacturing—not only for products, but national security and standard of living.
