November: Sales and Marketing Executives

December: Laboratory & Technical

Rewards Flow to Lab, R&D Pros

By Lisa Tocci

Do you hear a soft humming when you pass by your companys laboratory or enter its research and development suite? It could be the whirring of a rotary viscometer or a benchtop stirrer – but it just might be the satisfied buzz of well-paid lab, technical and R&D managers.

These professionals have a lot to sing about. As a group, their average pay is comfortably in the six-figure range. Eighty-five percent of them say they got a pay raise in the past year. And three-quarters of them are confident of receiving a bonus this year.

Seventy-nine managers in the lab/R&D/technical area responded to our confidential 2014 Lubricants Industry Salary Survey. All of them work in lubricant manufacturing; none work for distributors that do not make lubes.

For 2014, the participants report a total compensation averaging $129,400, and median compensation of $120,000. Those numbers are 7 percent and 5 percent higher than what lab/R&D/­technical managers reported in 2012, the last time LubesnGreases conducted the survey.

Does that prove that lubricant manufacturing companies have stepped up their compensation levels? Not at all. In fact, such direct comparisons of the results from year to year should be avoided, because each biennial survey goes out to and hears back from a different pool of respondents.

However, competition for laboratory and R&D managers is quite intense and 2014 has seen strong hiring in this field, according to Ken Pelczarski of Pelichem Associates, a recruiting firm that specializes in the lubricant and chemical industries. Last year was very strong for hiring, and this year has been almost as good, he said last month. Weve seen a number of top-level chemical and lab management jobs filled, especially in the first half of the year. Were seeing some companies expand, and then expand again, such as one company that hired a new lab manager in August. Things have gone so well that theyre now back to find a senior chemist.

These are not simple jobs to fill, added Pelczarski, who is based in Downers Grove, Ill. The search for a laboratory manager or senior formulating chemist might only take a few months if youre lucky, but its not uncommon to spend six months to a year to find the right person. Youre also competing for personnel with other companies and industries. With forecasters expecting R&D funding to continue growing 4 to 7 percent annually, as they have for the past few years, in industries as varied as life sciences, materials, energy and others, this market wont cool off soon, he believes.

In the lubricants industry specifically, Pelczarski is seeing a need for R&D and technical talent at the highest levels. Such jobs typically carry six-figure salaries, and up to $200,000 in some cases, he said.

Those figures dovetail with what LubesnGreases heard in its latest salary survey, but remember, thats only part of the story. We also heard from individual managers who reported making just $47,000 – and at the top of the pyramid, $280,000.

Overall, the average respondent to this years survey is just under 50 years old, with 22 years of experience. He or she has spent 14-and-a-half years with the current employer – seven and a half of them at this job – and supervises an average of five people. The median number supervised is four people.

What most seems to determine compensation? Survey responses point to a variety of factors:

Company Size. Pay correlates directly with company size, the survey shows, with each step up the scale adding more dough to lab and R&D paychecks. Looking at median pay, lab/R&D managers working for companies with 11 to 50 employees said they make $82,000 in yearly compensation, and the median for those with companies of 51 to 200 employees is $110,000. That jumps to $130,000 when the company has 201 to 500 on the payroll, and again to a median of $140,000 at the largest companies (500+ employees). Thirty-seven percent of respondents in 2014 said they work for enterprises at that top end of the scale, roughly the same share who did in 2012.

Number Supervised. Yes, here too, bigger is better. For those supervising five or fewer in the lab/R&D/technical area, median compensation is $95,500, the 2014 survey finds. When the number supervised rises to between six and 12 workers, median compensation goes up to $156,000. And for those who have more than 12 employees under their supervision, the median is $170,000.

Geography. Lab/R&D managers who responded to the 2014 survey are located in every U.S. region – except the Northwest; perhaps thats no surprise since that area has sparse lubricant manufacturing. The biggest cluster of respondents (62 percent) is located in the industry-heavy North Central and South Central states, averaging $121,400 and $131,900 in compensation, respectively. Twenty-five percent of the respondents are based in the Northeast, making an average $120,000 a year.

The Southeast, where reported pay averages $102,200, garnered a bit over 6 percent of the replies, and the same share came from the U.S. Southwest. These last participants are at the top of the game, reaping an average of $216,000.

LubesnGreases also made a point of asking participants if they hold Certified Lubrication Specialist credentials from the Society of Tribologists & Lubrication Engineers, and 15 percent of lab/R&D managers answered in the affirmative. How does this affect their compensation? Those with CLS report average pay of $145,600 a year, and a median of $140,000. The 85 percent of respondents who do not have CLS say they average $126,500 a year (their median is $117,000). In many ways, the two groups seem like peers – roughly 49 years old on average; each supervising five or six people; 22 years of experience; geographically diffused. So whats behind this almost $20,000 chasm between CLS haves and have-nots?

CLS is a sure way for employees to stand out, asserts Maureen Hunter, who was recently elected president of STLE. We live in a world where people recognize value in specialization, and they look for the letters behind your name, she said. While STLE offers several other certifications – Certified Oil Monitoring Analyst I and II, and Certified Metalworking Fluids Specialist – CLS is the most longstanding of its certifications and the one with the largest enrollment and recognition.

Hunter, who is with lubricant additives supplier King Industries in Norwalk, Conn., sees more companies and professions requiring continuing education or re-certification, and said that CLS fulfills this need in the lubricants industry. We need to treat ourselves like our own best equipment – like our companys most valuable asset, she urged. Certification is an opportunity for lifelong learning. Its an opportunity to continually sharpen our knowledge and to keep up to date with current market trends and new technologies.

STLE Certification is often recommended to an employee by his supervisor as a way to groom him or her for advancement or promotion, Hunter continued. Certification is a recognized measurement of someones knowledge in a particular field. It enhances your value within your company and your credibility in the marketplace, and it improves your ability to compete in a global business environment. An increase in your value will translate into increased compensation. I say to any lubrication scientist: Get certified. Its an excellent return on your investment.

The survey finds that a gender gap remains in this profession, however. Twelve women working in lab/R&D management responded to the 2014 survey, for a 15 percent sample share. Their average reported pay is $101,700 a year, and the median is $84,900. By contrast, the 67 male respondents said they average $134,300 in yearly compensation (median: $130,000). There are clear differences between the groups, too: Average age of the female respondents is 46; the men average 50. The women have an average of 4.5 people reporting to them; the men supervise an average staff of 5.3 people. Most of the men (63 percent) have accrued greater than five years in their current positions, and so have three quarters of the women.

Other factors further cloud the picture. Half of the women respondents work for companies with greater than 500 total employees, where pay normally appears to be strongest. Only one-third of the male respondents were at companies of that size. On the other hand, none of the women respondents were from the U.S. Southwest, the region where the highest overall compensation is reported, but five of the men were.

Could these and other anomalies have skewed the results? Its not possible to say. The only thing we can determine from this sample is average compensation for our women respondents falls almost $33,000 short of the mens.

As mentioned earlier, 85 percent of lab/R&D/technical managers who participated in the 2014 survey said they received a raise in pay in the past year, and 76 percent said they expect a bonus this year. Its useful to compare that to the responses from two years ago: Only 65 percent of the respondents back in 2012 said they had received a raise in the prior 12 months, and just 67 percent were expecting a bonus.

Other forms of compensation are on the table for our respondents, too. Almost 17 percent expect theyll receive stock or equity in their company, and 29 percent expect profit sharing. Commissions, however, remain a rarity in the technology suite: Just 2.5 percent of all respondents in lab/R&D management say they earn commissions.

Looking ahead, Ken Pelczarski observes that there seems to be a cycle in hiring, with companies alternating between adding sales and marketing professionals, then beefing up their R&D teams, then going back to find more sales and marketing managers. The sales and marketing needs have been foremost in this years final quarter, which suggests to him that the pendulum may next swing back to the lab and R&D side.

In looking at candidates, the common denominator I see at the most successful companies is that they are willing to hold out for what they want, even if the need is urgent. That doesnt mean they only look at those with lubricants background; you need to be flexible and keep an open mind. I have to applaud those companies who look for solid employees, with a history of success, and who have demonstrated that they can learn new concepts and new technologies quickly. You also want the person to fit well with your companys culture, and who is likely to become productive in the long run.

Wrapping up, he observed that December may seem quiet for hiring, but the holidays often mask an undercurrent of activity. We often see companies planning, finalizing their budgets and doing quiet interviews, looking to begin the year with new hires, Pelczarski said.

METHODOLOGY

With guidance from experienced specialists in both surveying and personnel issues, LubesnGreases designed a salary questionnaire for key job functions at U.S. lubricant suppliers. The main objective was to investigate compensation for three professional career paths (manufacturing/production; sales and marketing; and laboratory/technical). A second objective was to determine whether companies which manufacture lubes offer higher or lower salaries than those which distribute lubes only. A third objective was to track salary trends over time.

On July 21, 2014, questionnaires were e-mailed to 1,848 professionals drawn from the LubesnGreases and STLE databases, in the job categories under study; a reminder e-mail was sent in each of the following three weeks. A total of 465 usable surveys were returned, for a 25 percent response rate. Participants responded directly to Charles R. Mann Associates Inc. of Washington, D.C., an independent statistical survey firm, which compiled the results in mid-August. No one at LNG Publishing or LubesnGreases magazine saw any individual data or any of the returned forms.

The respondents to the 2014 survey included 90 plant managers; 296 individuals in sales and/or marketing; and 79 in laboratory/R&D/technical management.

The complete 2014 Lubricants Industry Salary Survey is available for download in digital .pdf format for $125. As well, the data set for each professional category (plant manager; sales & marketing; lab/technical) may be purchased for only $50 each. To order, visit www.LubesnGreases.com/SalarySurvey/orderform.cfm.