Manufacturers Get Into High Gear with Growth and Compensation
Having just conducted our biennial Manufacturing Compensation & Benefits Benchmarking Study, we can confirm that local growth has certainly followed national trends. There were 70 participating companies with a near even split among the “Over 100 Employees” and “Under 100 Employees” categories with 38 and 32, respectively.
Growth in the local manufacturing industry has translated into a 65% of the participating companies experiencing an increase in overall employee levels (as compared to 49% increase in 2013).
Remaining competitive in the manufacturing industry and increasing sales is accomplished by keeping the right people employed, and doing so requires offering employees comparable compensation and benefits. These increases and corresponding growth are noted across the board but more pronounced in the results of the smaller manufacturers. Based on a survey of 72 companies in the manufacturing industry in the Cincinnati region, pay increases have been on a steady incline since 2012. In 2014, for companies with less than 100 employees, pay increased 5.2% with anticipated increases of 5.7% during 2015. For companies with over 100 employees, the increase was far slighter as noted in the included graph.
One reason to explain the larger pay increases is the Gross Margin per FTE. A growing workforce, coupled with process efficiencies showed a substantial 56.5% increase in Gross Margin per FTE among companies with less than 100 employees. By returning a portion of this increase to employees, these companies will likely benefit from increased retention and work efficiencies. This margin shrunk 16% for companies with over 100 employees demonstrating that larger companies must continually remain diligent with product costs and lean efficiencies.
For more insights into how manufacturers are remaining competitive, you can request a copy of the 2015 Manufacturing Compensation & Benefits Benchmarking Study by clicking here.