LubesnGreases has completed its Lubricants Industry Salary Survey, an exclusive study conducted every other year that polls the U.S. industry on compensation for key management positions. Information was gathered directly from individuals who work for lubricant 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 & Marketing Executives
December: Laboratory & Technical
What do sales and marketing managers at lubricant companies earn? According to the 220 individuals in those jobs who answered our exclusive 2016 Lubricants Industry Salary Survey, its an average of $140,400 a year. Thats almost $7,000 more than was reported in 2014, the last time we conducted our biennial survey.
Median pay in the sales and marketing suite also took a leap, from $125,000 in 2014 to $131,000 now. The median means half of the respondents earn less than that amount and half make more.
Those numbers tell only part of the story, though. As every survey going back to 2000 has heard, the watershed factor for compensation in this industry boils down to whether your employer manufactures lubricants or only distributes them. Those on the manufacturing side tend to reap far more, this years survey again confirmed. Other influences play a role, too-like geographic location, company scale and professional credentials.
Survey participants in this job category in 2016 included 128 individuals who work for lubricant manufacturing companies and 92 with companies that market or distribute the products.
Those working for lubricant distributors told LubesnGreases they pocket an average of $127,600 a year, while their median compensation is $120,000. Two years ago, the average compensation reported from those with lubricant distributors was only $109,700 (median: $100,000). So theyve made some appreciable strides in the intervening time.
By contrast, their compatriots at lubricant blending companies are at a standstill versus 2014. Back then, such participants averaged a bit over $149,000 a year, with a median compensation of $140,000. This years crop of managers with lube manufacturers average $149,700, and their median remains stuck at that same $140,000.
In looking at these figures, though, readers should keep in mind that this years responses came from a different pool of individuals than our prior survey, so direct comparisons and up/down assumptions should not be made. Where the figures are higher, it does not mean that everyone got a raise; it simply underscores the variables between this group and those who replied in 2014.
The 220 sales and marketing managers who answered this years survey have spent decades getting to where they are. Their average age is 51 years, although the median age skews closer to 54. Our average respondent has 22 years of relevant work experience and has been with their present employer for 11 to 12 years, including seven years in this current position.
What else can we tell you about these individuals, who are assured that no personal details will be disclosed?
Nineteen of the sales and marketing respondents are female, around one in 11. Twelve of these women are managers at lubricant manufacturing companies, and the rest are with distributors.
Geographically speaking, our survey-takers are all over the map, with every region represented. Youll find the largest share of sales and marketing participants (24 percent) and best average pay ($154,600 a year) in the South Central states. The Northwest, on the other hand, generated the fewest responses (just 5 percent) and also the lowest average pay ($92,200).
Overall, our sales and marketing managers said they supervise an average of seven people (median: four people). Those who have five or fewer people reporting to them average $129,300 a year, which rises to $150,750 as staff size climbs into the six-to-12-person range. Sixteen percent of the respondents said they are responsible for more than a dozen staffers, and these executives top the scale at a gratifying $162,200 a year.
Another interesting fact about our sales and marketing respondents is how many of them have settled in for the long haul. The majority, 55 percent, have been in their current position for five years or more, and the median pay for that kind of longevity is $135,000 a year.
Those levels of pay and tenure may be one reason why Ken Pelczarski, of the executive search firm Pelichem Associates in Downers Grove, Ill., says the job market is tight right now for lube companies that are trying to hire. People arent as willing to make a change, or dont need to. Theyre being more picky, more careful about where they go. Meanwhile, we also see lubricant companies trying very hard to take care of the people they have, to keep them happy and on board.
In Pelczarskis experience, most sales and marketing executives wont change jobs unless theyre unhappy for some reason. Money alone isnt reason enough to move, he said. It comes down to how they feel theyve been treated. What people really want is to improve themselves. Or maybe the company isnt growing, or theyre not seeing it progress in the right direction.
Treating people well begins with corporate culture, agreed Dennis Parks, executive vice president of Texas Refinery Corp. in Fort Worth, Texas. And that attitude is mirrored in the sales and marketing managers.
In our lubes division we work with hundreds of salespeople, and the majority of them are independent contractors who are paid straight commission, Parks said. A lot of people think being a manager means you crack the whip, but you dont crack the whip with these folks-theyre their own boss. We make sure they get lots of in-house support, attention and recognition, and a doggone good commission. So the role of our regional sales managers is to help these people be as successful as they can be.
A manager has to be able to work with the salespeople in the field, to train them and provide face-to-face support. Its the managers job to generate enthusiasm and energy, and motivate their people, he declared.
A similar mindset is seen at Hydrotex Inc., in Farmers Branch, Texas. All of our sales vice presidents are organized by specific industry and are salaried, related John Cummins, vice president of product technology. We work together to develop our budgets and plans and forecasts, and then they go on to manage their salespeople in the field. They travel or do whatever it takes to produce the most benefit.
Company size also carries weight in determining compensation for sales and marketing managers, who indicate that pay is best at companies having more than 500 employees (which would include major oil companies and nationally prominent independents). One-quarter of our 2016 respondents say they work for such companies, and theyre raking in $159,500 a year on average. Most of these participants (86 percent) say they are with lubricant manufacturers rather than distributors.
As company size goes down, so does the average pay, to $143,400 for those working at companies having 200 to 500 employees; $132,500 at companies with 101 to 200 employees; and $125,200 when the company size drops into the 50-to-100 range.
Just six of the 220 participants said they work for the smallest companies (10 or fewer employees), and these lucky half-dozen report earning an average $147,200 a year (median: $137,500). This may be an aberration due to the shallow pool of respondents with such tiny companies, because otherwise compensation tends to progress in an orderly fashion up the ladder of company size.
Raises and Bonuses
Overall, around 56 percent of sales and marketing respondents said they had received a raise in the prior 12 months, and one-quarter receive commissions. Commissions remain more common at distributor companies than at lube manufacturers (32 percent versus 20 percent), while raises were handed out more frequently at manufacturers (63 percent) than distributors (47 percent).
As well, Dennis Parks at Texas Refinery Corp. said hes a big fan of using bonuses to incent salespeople. If you meet the companys goals, if you do that extra effort, you should get a bonus, even if youre already making salary or commission, he said.
Our survey respondents would applaud that notion. Eighty percent of the sales and marketing managers with lubricant manufacturing companies said they expect to get a bonus this year, and 70 percent of those with distributors said likewise. Although 29 percent of respondents confirm they get profit sharing, those who are compensated with company stock or equity are still a rarity (8 percent).
Hydrotex is one of the rare companies that puts stock on the table when wooing talented employees, revealed John Cummins. Of course, we also have to offer benefits and a salary thats competitive here in the Dallas area. But what really makes us stand out is that 30 percent of the company is an ESOP [Employee Stock Ownership Program]. So our employees know they can have a piece of ownership in the company, which is big.
The opportunity for corporate ownership is a really good recruiting tool, he emphasized.
CLS Pays Off
Fifty-nine of the 220 sales and marketing professionals who participated in this years survey said they are Certified Lubrication Specialists, credentialed by the Society of Tribologists and Lubrication Engineers. These respondents say they earn an average $144,400 a year, versus $139,000 reported by those participants who lack the imprimatur. Similarly, the median compensation for the two groups is $135,000 with CLS, $130,000 without. Other differences and similarities are sketched out in the table on page 30.
When you look at these data, clearly the yearly salary alone is not so much a big thing, observed Robert Gresham, STLE director of professional development. But if you look at whether a person got a bonus or not, earns commission or not, there is a significant increase in expectations for those who have the CLS. CLS holders also have more people working for them, he pointed out, with an average of 11 direct reports, versus seven answering to managers without CLS.
Whats most impressive is the gap in who gets bonuses, he reiterated. Whats implicit in this data for sales and marketing managers is that those with CLS are more successful, and have higher expectation for pay and bonuses. Over the years of a career, that can really add up.
We do look for CLS certification when hiring, said the vice president of sales for a large lubricant distributor in the Midwest, who spoke on condition of anonymity. And theres a lot of competition for those hires. Its a challenging and arduous certification, so the guys and gals who have it are in highest demand.
Pelichems Pelczarski concurred. Most potential employers consider CLS a plus, a bonus they get with the hire, he commented. So it helps you in getting the position, and then it helps you on the job by bolstering your status with the company and with customers, too. All else being equal, it can mean a preference when hiring, and a little more money, and in field service it brings more credibility to the technical sales role.
New Year, New Job?
As this year draws to a close, Pelczarski anticipates hiring activity will perk up, after a slow but steady summer. There are always some opportunities, but recruiting activity seems to be just holding steady now, not growing. However, a number of companies have said they want to start interviewing after the first of the year-or even right after Thanksgiving-to fill openings they plan on having next year.
The best firms know to start this process early, he added. If you know a senior sales person will be retiring in the second half of the year, you should plan to hire by the first quarter next year so you have time to train that replacement and transition him or her into the position.
While a successful search used to take two to four months, Pelczarski said the average now is longer, three to five months or more. Companies are finding it may not happen in the first series of interviews, and they need to look longer.
The job market really favors those seeking work now, echoed the anonymous Midwestern sales v.p. Manufacturing was on a long, slow decline for several decades, but now were seeing manufacturing infrastructure coming back to the U.S. and growing need for lubricants in plastic extrusion molding, steel mills and the robust automotive industry. Theres great opportunity, and thats causing lubricant companies like us to bring folks in, to serve that growth.
For those in a hiring mode, Cummins at Hydrotex added this search hint: Some of our best hires on the sales side have come from our customers. We keep our ear to the ground, and often well hear that someone working for a customer wants to make a change. They can come to work for us, get a piece of the action, and have more fun.
Does he view Hydrotexs vendors sales reps with the same acquisitive eye? Not really, he laughed. If theyre doing a good job for us, I have a selfish reason to keep them where they are.