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LubesnGreases has completed its 2010 Lubricant Industry Salary Survey, an exclusive study conducted every other year that polls the U.S. lubricants industry on compensation for key management positions. Information was gathered directly from individuals who work for lubricants manufacturers and distributors, and was compiled by an independent statistical and research firm. We present the results in this three-part series.

October: Plant Managers

November: Sales and Marketing Executives

December: Laboratory & Technical

Theres good news and bad news for lubricant industry sales and marketing managers. The good news: Those of you responding to LubesnGreases 2010 Salary Survey told us you earn an average salary of $117,197 a year.

The bad news: Thats only 5 percent higher than when we last asked, in mid-2008, and represents the weakest two-year gain seen since we began gathering data on industry salaries 10 years ago.

Another sign of softness in salary growth: Respondents who work for lubricant distributors reported average pay of $92,890 in 2010, a slight contraction from two years ago.

Those who work for lubricant manufacturers did better, and reported an average $130,044 a year. Thats better than their counterparts in 2008, but also reflects a slackening of upward momentum versus prior surveys.

Its important to note that the 2010 pool of respondents differs from those who responded in prior years. This means the responses should not be compared absolutely because of differences in the reporting groups, who offer their answers voluntarily and anonymously. But a slowdown can be seen in a number of areas. Fewer sales and marketing respondents than ever before, just 52 percent, got a raise in the past 12 months, for example. And those working for mid-size lubricant companies, with 101 to 500 employees, reported lower average salaries this year than did respondents to 2008s survey.

All this suggests that lubricant sales and marketing executives felt the dragging weight of the economic recession. That view is affirmed by Jason McAuliffe, president of the search firm Energy Recruiters Inc. in Bonita Springs, Fla., who says the nadir for the job market came when the economy stalled completely in late 2008.

The really big blip in hiring was October 2008 to March 2009. In that period you could hear a pin drop, it was so quiet, he told LubesnGreases. Thats when the lube companies were culling the herd in their sales departments, and getting rid of those who were nonproductive or non-performing.

Coming out of March 2009, companies began to look again for sales and marketing expertise, but very selectively, McAuliffe emphasized. As a result, salaries flat-lined.

One problem was that you could find unemployed people, and they often were willing to settle for less compensation just to get work. Meanwhile, the folks who were actively employed, they didnt want to move. They were sitting tight, waiting for things to improve. So the employers with jobs to offer had the power over the past two years, thanks to high unemployment, and that led to stagnant wages.

Some of that cull may still be going on now, he surmised, noting that more than one major oil company is busy downsizing its refining and marketing segment, including lubricant teams. As part of this, he expects to see lube manufacturers handing off more of their sales efforts to distributors, and then partnering closer with the top-selling distributors. So he predicts more jobs will be migrating to distributorships.

Companies, especially lube distributors, are steadily hiring right now, McAuliffe said, and theyre seeking special skill sets. Distributors are where the action is right now in lubes, and its where the transactions are being done. We see distributors wanting to field larger sales forces, and a lot of our contacts say they are seeing the majors trying to roll up the smaller distributors into larger ones.

A Stable Demographic

With 300 individuals responding to this segment of the 2010 survey, some broad generalities can be made about sales executives in this industry. Those who responded to the 2010 Salary Survey averaged 49 years of age, and had 20 years of relevant work experience, including 12 with their current employer. Theyve held their present position for 7 years on average. A little over 5 percent are women. These demographics closely resemble those from our salary surveys conducted in 2008 and 2006.

Sixty-five percent of the current respondents work for companies that manufacture lubricants, and the rest work for lubricant distributors, a vital distinction. No other factor – not tenure or geographic location, company size or gender – has such a strong impact on the heft of our respondents paychecks. As noted above, those working for lubricant manufacturers report average annual salaries of $130,000, while those who work for lubricant distributors average $92,900 a year, almost 40 percent less.

No one should be surprised by this difference, commented ERIs McAuliffe. The type of person who succeeds working at a distributorship is different than the one wholl succeed at a manufacturer. Lube manufacturers tend to want a savvy person who manages sales to distributors, often a pedigreed professional, and that costs more. The lube distributor, on the other hand, often wants a sales manager who, like his staff, is sharply focused on immediate results. Unfortunately, jumping from one side of this divide to the other isnt easy, he added.

When people come from a major with 15 or 20 years of experience, they can be hard to match up with a distributor because theyve grown use to the larger culture and better payscale. It can be challenging. And a lot of distributors dont want to hire from the majors. They think youll need too much support structure.

Even so, those from oil majors shouldnt rule out working for distributors, he advised. When youre with a lube distributor, you get to see the results of your work on the companys bottom line. Its not like with a multi-billion-dollar integrated oil company, where lube sales are just 0.001 percent of revenues. You can make a difference, bring a higher level of thinking, and get listened to. What you do will drive revenue, and professionally that can be very rewarding.

Location, CLS, Gender

What else plays a role in compensation? Geography certainly does. Average salaries reported by sales and marketing pros in the U.S. Northeast and Southeast were $114,400 and $115,600, respectively, while those in the Southwest were close to $129,000. That was followed pretty narrowly by the Southcentral U.S. at $127,100.

Salaries reported in the Northwest were the lowest, averaging $105,000, but that region also was the only one where more respondents said they work for distributors than for lube manufacturers. Every region saw an uptick in salaries from those reported in the prior survey in 2008, except for the Northcentral U.S. where salaries softened to about $107,000. Thats a dip of $1,000 from the average reported by the 2008 respondents.

Do Certified Lubrication Specialist credentials from the Society of Tribologists & Lubrication Engineers make a difference? STLE was glad to help answer this, providing a database of CLS individuals; those in the appropriate job designations were invited to participate anonymously in the survey.

Forty percent of all sales and marketing execs (121 individuals) responding to the 2010 survey said they hold CLS credentials, and their average salary was $123,500 a year. By contrast, respondents without CLS said they average $112,900, roughly 9 percent less. Those with CLS were slightly more likely to have gotten a raise in the past 12 months (56 percent) than the non-CLS group (50 percent), and to expect a bonus this year (65 percent versus 60 percent, respectively).

Why such differences? The two groups of respondents have a lot in common, including average age (49 for CLS, 48 for non-CLS) and tenure with current employer (average: seven years). Seventy-four percent of those with CLS, however, said they work for lube manufacturers, where salaries are usually higher; only 59 percent of the non-CLS respondents work for lube manufacturers.

Also, 55 percent of CLS-holders said theyre with companies having 500+ employees; only 33 percent of those without CLS work for such large companies. So having CLS may open doors to jobs or advancement with large companies and/or lube manufacturers, both of which generally pay better.

Six percent of the respondents in sales and marketing were women, and these 17 individuals reported an average salary of $107,400 a year. Thats $10,000 less than their male compatriots. The gender/wage gap narrowed significantly when those working for distributors were eliminated from the calculations, however. Looking only at those working for lube manufacturers, female respondents earned an average 127,400 a year, while male respondents averaged $130,200. Conversely, if only those working for lube distributors are considered, men are way ahead with average salaries of $94,600, versus $59,400 for women.

The reasons for these gaps cannot be defined from the small number of female respondents, but some signal differences stand out. First, women respondents tended to be younger, with an average age of 40, while the men averaged 50 years old. Female participants had less experience, 15 years of relevant experience versus 20 for the males. And on average, women said theyd held their current job for not quite four years, while the male respondents averaged 7.5 years.

Altogether, all sales and marketing participants in the 2010 survey said they saw fewer gains last year, with just 52 percent saying they got a raise in the past 12 months. Those at lube manufacturers, by the way, were twice as likely to have gotten a raise than those with distributors.

The picture brightens a little looking ahead, though. Sixty-two percent of respondents expect to get a bonus this year – same as in mid-2008, when the lubricants industry was riding high.

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