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Is Lab Manager Pay Shrinking?


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

Laboratory and technical managers with U.S. lubricant manufacturing companies take home average compensation of $112,845 a year, according to the 2010 Lubricants Industry Salary Survey. Thats about $1,200 below the average reported two years ago, in the 2008 Salary Survey. The median compensation for these respondents stands at $102,000 (that is, half the respondents make more than $102,000, and half make less). Thats down 5 percent from the median of $107,600 found by the prior survey.

Those declines suggest that the recession has not been easy on those in charge of the research labs, quality control and product-development teams at lube companies. The situation led the recently hired technical director at one Southeastern lubricant blender to confide, I believe that there is still opportunity for employment in the lubricant industry, however the opportunities are shrinking. Employers are more [selective] about who they hire, based on what short-term value can they deliver.

It is important to emphasize that direct comparisons from 2008 to 2010 cannot be made because each biannual survey hears from a different pool of respondents. This means the survey cannot be used to say definitively that compensation is lower now – just that this years group of respondents report lower average pay than did the 2008 group.

There may be a number of reasons for this. For example, in 2010, 5 percent of the respondents said they had more than 12 employees under their supervision. In 2008, far more of the respondents could say the same (11 percent). Since compensation rises with the number supervised – and the bigger the fiefdom, the bigger the rewards – this difference could have made an impact. Another variance: There was a 10-point spike in the percentage of women responding to this years query versus 2008.

Besides these factors though, the groups responding in 2008 and 2010 are similar in many aspects. They had similar age and experience, and come from roughly the same geographic areas. Each group also comprised roughly the same percentages from small, mid-size and large companies.

A Closer Look

As before, all of the respondents in this professional category of our three-part survey work for lubricant manufacturers, and none for lube distributors. This is to be expected, since lube distributors dont require the formulation, research and product development skills that are the lifes blood of lubricant manufacturing firms.

What does a typical laboratory and technical manager in the lube industry look like? The 85 individuals in that job who participated in our 2010 survey display several common traits. They are seasoned professionals, averaging just under 50 years in age and carrying 22 years of relevant industry experience. They have been an average 13 years with their current employer, spending half that time in their present job. Almost one-quarter of the respondents were female, the highest percentage of women replying in any of the surveys three job categories.

Our lab and technical managers also told us they supervise an average of four people. (The median was two people supervised.) And theres definitely a linear relationship between compensation and size of staff supervised. Eighty percent of the respondents have five or fewer people reporting to them, and they average $107,300 in yearly compensation (the median was $92,500). These numbers take a hearty jump when staff size rises to between six and 12 individuals supervised: The average nears $124,200 and the median is $125,000.

Five percent of the respondents are in the top tier, managing over 12 people, and they report an average $170,100 in compensation. The median for this cross-section, however, is a much-lower $135,300 (which hints that an outlier possibly skewed the average).

Counting Heads

Responses in the surveys other job categories proved the truism that pay tends to swell with the size of company, and it generally is true for laboratory and technical managers as well.

Forty-two percent of these individuals said they work for companies with 100 or fewer employees. Of those, respondents working for companies with 11 to 50 employees said they make an average $83,100, and those at companies having 51 to 100 employees were in the same ballpark at $81,200.

Eighteen percent of the respondents labor for mid-size companies having 101 to 500 workers, and they enjoyed a substantial pay premium over the first group. At companies totalling 101 to 200 employees, laboratory and technical managers averaged $105,900, and at companies with 201 to 500 employees, they reported making an average $98,800.

The remaining 40 percent of responses came from lab and technical managers with major-size companies – and these topped the scale. For the participants with companies having over 500 souls on the payroll, compensation averaged $150,200.

Geography and Gender

Geography makes a strong difference, too. The top paychecks are written in the Southwest, but the U.S. strongholds for lubricant manufacturing are the Northcentral and Southcentral states, and thats where the 60 percent of these technical professionals chimed in from. Answers from these regions came in at an average of $98,800 a year for Northcentral, and $101,800 for Southcentral. The medians for these two regions were $90,000 and $93,500, respectively.

The next largest group of responses came from the Northeast states, with 21 percent, followed by the Southeast with 15 percent of the replies. The former said they average $119,900 a year, with a median of $118,500. In the latter region, the average was $140,100 (the median: $123,000).

The rest of the responses originated from lab and technical managers in the Southwest, who averaged $157,800. Here, the median was $153,500. No replies were received from Northwestern states.

The 20 female lab managers who responded to our survey reported average pay of $89,350 (median: $80,500). That was substantially below than their male counterparts, whose average was $120,100 (median: $115,600). But there were a number of significant differences between the two groups of respondents, which may account for this gap. The women respondents were a bit younger, with an average 46 years of age versus 51 for the men. Women had an average of 16 years of experience; men averaged 24 years experience.

Another telling factor: Forty-six percent of the men who responded to the 2010 survey are with large companies, with 500+ employees, where pay scales tend to be better, while only 20 percent of the female respondents were drawn from companies of this size. In fact, two-thirds of the women who replied said they were with small companies with 100 or fewer total employees.

Finally, while the male respondents said they supervised an average of 4.3 other workers, females averaged 2.75 under their supervision. (Both groups supervise a median of 2.0 employees).

The Bonus Questions

Sixty-nine percent of these executives said theyd received a raise in the 12 months prior to the survey, which was taken in late July and early August. Thats a big difference from 2008, when 88 percent of respondents said theyd received a raise that year, and from the 87 percent who replied positively in 2006.

However, it may be that lube manufacturers opened their purses a little more in this department than in the sales wing or on the plant floor. Comparing only those respondents working for lubricant manufacturing companies (not for distributors), just 51 percent of plant managers and 64 percent of sales/marketing executives said theyd received a raise in the 12 months preceding the 2010 survey.

The majority of the compensation for laboratory and technical managers appears to come in the form of salary, with commissions playing a minimal role in their incenting. A mere 1 percent of the 2010 respondents say they get a commission as part of their compensation. Significantly greater numbers say they expect profit sharing (19 percent) and company stock or equity (14 percent).

As well, bonuses are very much on the table. Sixty-seven percent of the participants said they expect to get a bonus this year, which is pretty much the same as those in the 2008 survey.

Finally, LubesnGreases Salary Survey asks mostly simple, objective questions, but one query does demand a subjective answer: How much job security do you feel you have, on a scale of 1 to 5 (with 1 being the worst and 5 the best)?

We wondered, would the past two years of economic recession and weak lubricant sales leave U.S. laboratory and technical managers feeling disheartened? In fact, our respondents in 2010 rated their job security at an average of 3.8 – exactly the same high score they gave it 2008, and in 2006 as well.

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