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The Comeback Kids

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LubesnGreases has completed its 2012 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 Managers

The 74 U.S. plant managers responding to LubesnGreases 2012 lubricants industry salary survey say they are paid an average of $121,400 a year. About 72 percent of these respondents work for lubricant manufacturing plants, where pay averages $124,500. The rest work for lube distributors, and report making an average $113,400 a year. (The median for these responses was $115,000 for those at lubricant manufacturers and $90,000 for those with distributors.)

Thats certainly not shabby. In fact, its quite a bounce from the compensation reported by those who took part in our last salary survey, two years ago. Back in 2010, when the industry was crawling out from under the 2008-09 recession, plant managers overall said they averaged $95,730 a year. This years respondents have reversed the downward drift, and are taking home 26 percent more than the 2010 group.

Direct comparisons from 2010 to 2012 should be avoided, however, because each biannual survey gathers data from a different pool of respondents. The number of responses also varies. In 2010, only 63 plant man-agers participated in this effort, versus 74 who answered our confidential questionnaire this time. So the survey cannot say definitively that compensation has rebounded; only that this years respondents report markedly higher average pay than those in 2010.

As well as having fatter wallets, there are other differences, too. This years group of respondents are older and can boast more years of industry experience and time on the job than the group who participated in our 2010 salary survey.

Another factor that may have contributed to the uptick is that this years respondents oversee a much larger number of workers. On average they supervise 34 people each, while those who replied in 2010 said they supervised around 22 people. That is a significant distinction, as our salary surveys have consistently shown that paycheck size correlates directly with the number supervised.

The 2012 survey echoed other patterns seen in past years, too:

Bonuses are common for both, but plant managers with distributors are far more like to receive commissions as part of their total takeaway.

Plant managers who work for lube manufacturers typically out-earn those with lubricant distributors – but the gap is narrower now than in prior surveys. The average distributor manager takes home about 90 percent of what a manufacturing plant manager does, our respondents tell us; two years ago, they earned just 80 percent. Still, the lowest compensation cited by any respondent ($38,800) came from a distributor plant manager. The lowest reported by a lubricant plant manager was $57,000.

More of the respondents with lubricant manufacturers work at bigger companies, where the pay is better than at the smaller outfits. Respondents who run plants for lubricant distributors by and large work for smaller companies.

Running the Big Dogs Plant managers at companies with 10 employees or fewer said they make an average of $96,250 a year, but only two of our respondents came from companies that small.

A much larger number of responses came from the next step up in company size, firms with 11 to 50 people on the payroll. Companies of this size were the source of 22 percent of our lube manufacturing plant managers, who reported making an average $89,000 a year; and of 62 percent of the distributor plant managers ($87,100).

At the top end of the size scale are very large companies that employee more than 500 people. Twenty-eight percent of our plant managers came from such large outfits, and they reported making an average pay of $139,500. All but one is with a manufacturer.

Besides company size, number supervised goes hand-in-hand with higher pay. Those respondents who directly supervise five or fewer employees said they make $94,400 a year. Those with six to 12 under their wing report $116,500. And when the head count goes above 13 – as it did for half the respondents to this years survey – the compensation climbed to an average $138,200.

Wheres the Money?

One-third of the responses this year came from plant managers working in the South Central region, which is not surprising since thats the heartland of the lubricants industry. These managers reported the highest average compensation, at $149,700. The mean was $140,000.

The region with the next-highest pay is the Southwest, where the average reached $121,100, and the mean $99,750. Thats not good news in this case. In fact, the Southwest was the only geographic region where the average reported compensation was lower than two years ago.

Stephen Milam, president and CEO of Lubricating Specialties Co. in Pico Rivera, Calif., was not surprised to hear that. The state is in a terrible recession now, and while its hard to get people to move here, finding qualified people is not a problem because of the unemployment rate, he said. When theres an opening we have our choice of some of the best workers, managers and administrative staff out there. Its a great time to be an employer, and staffing any job in California is not a problem right now.

LSC operates several plants California, including Pico Rivera and Vernon, and recently added another in Azusa, Calif. To run that facility, Milam did what many lube blenders say they prefer to do: promote from within. We moved someone up there to manage the plant who had been with us and had operated one of our facilities, as well as moving over someone from our lab. We prefer to teach our own.

With a workforce of around 250, LSC is always teaching and training, Milam added. Were constantly working on succession planning, not just for the top executives but for all jobs, and it never stops. You never know who may leave or retire, so we teach our own to be ready to step up. You have to encourage the growth of your people.

The first-line supervisor is the toughest job to fill, asserted Milam. Its not just their technical skills; a smart, bright guy can be taught that. Its how they deal with people, their attitude, demeanor, how they handle a crisis. When you get a good one, hang on to them. Theyre truly jewels.

Fewer Females

The 2012 survey again asked respondents their gender, and once again very few of the plant managers who responded were women. Of the 74 usable responses in this professional category, only three (4 percent) were submitted by women, all of whom work for lubricant manufacturing companies. They were evenly divided among small, medium and large size companies.

The average pay these women report, at $116,400, is about 7 percent below that of the men who manage lubricant manufacturing plants; those men average $125,000 a year.

The typical female respondent is 51 years in age, and has been in her current job for nearly 13 years. The male plant supervisors at lubricant manufacturing companies, not too differently, average 50 years in age and not quite 10 years on the job. Both men and women can boast around 22 years of relevant experience, on average.

Those similarities aside, the sexes diverge in other professional aspects. The women say they supervise an average of 11 people, while the men have an average of 40 persons reporting to them. As well, only one woman reports working for a company that has more than 200 employees; half of the male respondents from lubricant manufacturers are in that company-size bracket.

With such a limited number of women participating, it would be foolhardy to jump to any conclusions about gender from this data.

An Upward Turn?

The 2010 survey was marked by gloom. Only half the respondents said theyd received a raise that year. By contrast, 62 percent of all respondents this year say they got a raise in the last 12 months.

In another upbeat note, 68 percent of the respondents say they anticipate getting a bonus this year, and 30 percent add that theyll see profit sharing. (Only 52 per-cent of plant managers said they expected to see a bonus in 2010, and a slender 16 percent were hoping for profit sharing back then.)

Additionally, 24 percent of plant managers who work for distributors say they expect to get a commission this year, while not quite 4 percent of those at lubricant manufacturers say that will be part of their compensation package.

Incentive programs like bonuses, commissions and profit sharing need to be structured carefully, cautioned the chief executive of one mid-size lubricant company, speaking not for attribution. You need to set reasonable goals for a bonus, and then see if the person achieved them. Anyway, I dont see how you can set it up for a plant managers bonus to be sales or volume based, because they have no control of volume.

At our company, this offi-cial continued, we have an incentive program for all the workers, and its 50 percent based on how well they achieved their individual goals, which are spelled out in advance. The rest comes from the performance of the company as a whole, which everyone has a part in.

And dont overlook the incentive of being able to advance and grow, advises Mike Skuratovich, president of lubricant manufacturer and distributor Eastern Oil in Pontiac, Mich. Weve added five positions this year already, he said, and over the next five years we plan to add 12 to 17 more. That will be a big step up in size for the company, which has about 45 on staff now.

Looking Within

When looking for new staff, Skuratovich says his company may use temporary workers from agencies who can be evaluated and then become permanent hires if they work out (and sent back if they dont). Or he finds promising talent at the local college who can work part time or summers, then eventually come on full-time.

For the professional and managerial tracks however, he strongly believe its best to promote from within. Its part of our culture to develop people so they can take on these roles. Thats one reason why were changing the company structure some. Were adding a new managerial level, so as the company grows theres more opportunity to grow with the company. The idea is to have room for people to gain experience and move up the ranks from associate to senior levels.

When he cant find the right person within Easterns ranks, it triggers an extensive search, although Skuratovich says he generally has little success using head-hunters. Networking, web-based hiring channels and referrals from those inside the company are better. I especially look for the person who has the right fit with our culture, with our business model, and ability to manage; even if they dont have the exact skills yet, that ability is more important.

Asked about the employment outlook for the rest of the lubricants industry, though, hes more hesitant: When I talk with others, they say things are getting better. But theyre still cautious, and they say theyll only hire someone if they have to.

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