How Manufacturers Use Compensation to Spark Improvement
Published on by Jessica Doremus in Manufacturing
Barnes Dennig, North Side Bank, and USI Insurance recently revealed the results of their 2019 Manufacturing Compensation & Benefits Benchmarking Study that surveyed regional manufacturing companies in Ohio, Kentucky, and Indiana. Of the 97 companies that participated, 48 companies had over 100 employees (large companies) and 49 companies had under 100 employees (small companies). The report findings were covered at a roundtable event, where we teamed up with a group of expert panelists to cover key trends in manufacturing compensation and benefits.
In May of 2019, the manufacturing industry’s purchasing manager’s index (PMI) was 57.8. A PMI above 50 points indicates economic growth. The manufacturing sector has continued to grow for the past twenty-five months. According to the Bureau of Labor Statistics, in April 2019 the manufacturing industry employed roughly 12.8 million workers, and that number is projected to continue to grow.
Of the 97 companies surveyed, the average pay increases received for 2018 were 5% for large companies and 4.6% for small companies, which is consistent with the average increase of 4.4% increase expected by manufacturers surveyed for 2019. With manufacturing on a hot streak, over half of the employers that participated in the survey noted that they have or are planning to increase employment. Voluntary quits in manufacturing have nearly doubled over the past few years. About 60% of separations are voluntary which speaks to the competitive landscape and importance of having top notch and competitive benefits.
Compensation Structure Keeps You Competitive
Presidents/CEOs saw an increase in base salary for larger organizations with bonuses of 25%-30%. Executive/Senior VPs saw an increase in total compensation in larger organizations. COOs and CFOs in larger companies held steady compensation, but in smaller companies, they saw a slight decline from 2017. Division/General Manager’s in larger companies reported a decrease in compensation versus smaller companies who saw an increase in compensation compared to 2017. Larger and smaller companies are making a higher percentage of compensation related to bonuses. Companies are doing this as an incentive for workers, and to make their companies more competitive with others in their industry.
As the manufacturing industry continues to grow, manufacturers continue to look for ways to become more competitive and retain employees.
These statistics were pulled from the extensive report created by Barnes Dennig, North Side Bank, and USI Insurance. You can request a copy of the full report here.
We recently covered the findings at an in-depth roundtable event. For more information, a recording of the presentation, and findings, please visit our website here.
If you have questions about this report or wish to know how your company can be better positioned to compete in 2019 and beyond, have a member of our Manufacturing team contact you at no charge here, or by calling 513-241-8313