Manufacturing Compensation Benchmarking | OH | KY | IN

How The Future of Compensation and Benefits will Impact Manufacturers

Published on by Michael O'Hara in Benefit Plan Audits, Manufacturing

How The Future of Compensation and Benefits will Impact Manufacturers

Barnes Dennig, USI Insurance and Custom Design Benefits recently released the biennial edition of the Manufacturing Compensation and Benefits Benchmarking Study. The study was summarized based on the 85 manufacturing companies that participated with 47% having more than 100 employees (large company) and the remaining 53% having less than 100 employees (small company).

Compensation Trends

The highest percentage increase in pay from 2015 to 2017 was for the  President/CEO’s position with an increase of 15% for large companies and 27% for small companies. Division Manager/GM’s salary had an increase of 37% for large companies, but a slight decrease of 3% for small companies. It should be noted that while there was a slight decrease for small companies this is looking at only salary not all compensation. When including bonuses, the position’s compensation was up overall from 2015 to 2017. Overall, compensation is on the rise from 2015 to 2017 which is in line with what is being experienced by clients throughout Cincinnati and Northern Kentucky.

While companies are still experiencing increases in compensation, the rate of compensation increase has decreased since 2015.  This is in line with the statistics that the economy is still growing, but not at the rate of growth in 2015.  This is supported with the expected pay increases expected by study participants. Large companies expect their annual pay increases to decrease a small percentage from 2016 (4.30%) to 2017 (4.20%), and small companies expect a decrease from 2016 (4.20%) to 2017 (3.70%).

Personnel Issues - OH | KY | IN
Table 1

Top Personnel Issues

Recruiting and retaining has been labeled as the number one issue. To the left are the recruiting and retaining strategies used by manufacturers. Table 1. shows the recruiting strategies and Table 2. shows the strategies for retaining employees.

The second issue is healthcare costs. The total cost of premiums has risen for singles and family plans and decreased for employee/spouse and employee/children plans. While the total cost has not increased in every category, the cost to the employee has increased for each of the four categories.

Manufacturing Roundtable Recap - Manufacturing CPA
Table 2

It is interesting to note that these issues were the same top issues in the 2015 survey. Companies across Cincinnati and Northern have found they have to think outside the box of the normal compensation package to differentiate themselves.


Popular Health Plans

The two most popular health plans are the Preferred Provider Organization (PPO) and Health Savings Accounts (HSA). A PPO is a plan that contracts with medical providers so employees pay less when they visit these providers versus a medical provider outside of this contract. HSA’s are plans were the employee and/or employer put away money from each pay period to use towards medical bills in the future. HSA’s are tax-advantaged because they are not subject to federal income tax.


The Future

  1. Alternative Plan Funding
    • Long-term savings with self-funding plans compared to fully insured plans
  2. Referenced Based Pricing & Direct Contracting
    • Employers adopting plans designed to focus on reducing overall plan costs by reducing reimbursement rates
  3. Pharmacy Expense
    • Fastest growing segment for employer health plans
    • Medication prices have grown by an average of 127% every 5 years since 2010
    • Work on reducing these prices

 Contact Us

If you are interested in learning more about our compensation and benefits benchmarking study, and would like to receive a copy, please contact us here.


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