Plant pay takes a hike in 2010

It’s been a rough couple of years for manufacturers but management-level pay rose almost 4% in 2010 after a dismal 0.76% increase in 2009, according to Canadian PLANT survey of Canadian companies.

December 21, 2010   by JOE TERRETT, PLANT EDITOR

Survey respondents are generally happy with their pay but they took on more responsibilities following the economic downturn.

Photo: iStockphoto

It’s been a rough couple of years for manufacturers but management-level pay in the sector dominated by small and medium-sized enterprises (SMEs) rose almost 4% in 2010 after a dismal 0.76% increase in 2009, according to the preliminary results of a new national survey of Canadian companies.

This first salary survey conducted by the Excellence in Manufacturing Consortium (EMC) and Canadian PLANT magazine gathered 605 responses from executives and managers at companies across Canada, many of whom (42%) noted some change in employment status following the economic downturn. Nonetheless, they are satisfied with their job security, compensation and work-life balance.

“This is consistent with what we’re hearing from manufacturers,” said Al Diggins, president and general manager of EMC, a not-for-profit consortium of Canadian manufacturers. “A lot of it speaks to what’s happening inside the buildings where people are saying they’ve had to take on more responsibilities following lay offs and cutbacks.”

Most respondents (72%) had a management role in their companies, while 18% identified themselves as having an ownership stake. Their businesses cover a range of interests from fabricated metals to sophisticated electronics with 15% identifying their organizations as large (more than 500 employees) and the rest falling under the SME category. Sixth-five per cent of plants are not unionized, 29% are.

The average salary for all titles is $96,600, which represents a 3.98% increase over 2009 for the manufacturing sector and as of October, it’s ahead of the 2.4% inflation rate in the 12 months preceding October.

Predictably, the big money is going to owners, senior executives and plant managers who all weighed in at more than $100,000 a year. CEOs and presidents are at the top of the salary hierarchy averaging $153,700, followed by owners/partners ($141,400), vice-presidents ($136,000), directors ($111,500) and plant managers ($101,000).

Engineers average $81,700, while many of the other categories, including administrative management, purchasing/supply management, maintenance managers, and technician/technologists earn between $75,000 and $77,000. Materials managers average just under $70,000.

A bit less than half the respondents report a portion of their salary made up of bonuses and incentives, with those showing the highest percentage (20% or more) averaging $169,000. Among the perks or extras are profit sharing for 27%, a vehicle of some kind for 19%, stock options for 6% and club memberships for 5%.

(Download a pdf of Manufacturing salaries by title, Bonuses and incentives and Level of education.)

The typical respondent’s age is just shy of 48 with 21.8 years of experience in manufacturing. Forty-one percent have a university degree, 41% have a college or trade/technical school diploma and 13% have a high school education or less. They’re a hard-working lot, too. The average workweek is 47.6 hours.

A competitive salary and a healthy work life balance top the job importance list for 94% of manufacturers, with 73% and 78% (respectively) pronouncing themselves satisfied. Ninety-one percent want a healthy benefits package and 76% said they have one. Job security is key for 89% and 84% do feel secure. Vacation time is important for 89% and 78% are satisfied with their time off. Bottom of the list is career development for 80% with 67% declaring themselves satisfied.

They were also asked what it takes to do their jobs and people skills ranked most important by a landslide, according to 44% of those surveyed. Following well behind are industry specific technical skills (10%), productivity/continuous improvement (8%), financial and project management (both 7%) and analysis (6%).

Diggins views the focus on people skills, somewhat taken for granted in the past, as prudent. With ongoing shortages of skilled people and impending retirements among baby boomers, he said companies need to do the best the can with the people they have. There will be much more head hunting going on. “Keeping the right people will depend on keeping people happy.”

Many of the companies (45%) said revenues were up from 2009, 16% said they were the same while 18% reported a decrease. And they are optimistic about the future. Over the next five years 64% plan to invest in new production equipment and processes, 58% will be hiring more employees, 33% will be entering new geographic markets and the same number will be adding new lines of business.

There are some issues that concern respondents. First for 59% of them is cost control followed by skills shortages (43%), reorganization (30%), technology upgrades (29%), supplier relationship management (25%) and capacity shortages (23%).

These are all areas EMC has been addressing, said Scott McNeil-Smith, EMC’s director of marketing and development. “But one of the most asked questions from members has to do with how to benchmark salaries. The results of this survey will help them access that important information.”

The survey, fielded in late November and early December, has a +/-3.3% margin of error, 18 times out of 20.

Watch for more in-depth analysis of the survey results in the January/February issue of Canadian PLANT.

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