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Sales Managers: Hot Property


Sales Managers: Hot Property

The words a sellers market should sound sweet to lubricant sales and marketing managers contemplating their own career prospects. Facing the lowest unemployment levels the United States has seen in 49 years, lubricant company chiefs say they must redouble their efforts to land and retain these key professionals. Recruiters advise that the best candidates expect an offer to include higher pay, an appealing workplace and kid-glove treatment.

Its not enough to paint a picture of future opportunity, that wont move a candidate now, said Loren Perez of the executive search firm Energy Recruiters Inc., in Atlanta. Previously, the candidate had to sell his or herself-today, the employer has to sell itself. We see employers listening more and taking care of their employees to keep them. Still, there are lots of folks retiring and new people moving in, so opportunities are out there.

Search expert Ken Pelczarski, of Pelichem Associates in Downers Grove, Illinois, said hiring by lubricant and additive companies has picked up significantly, with a positive impact on pay for all, from hourly workers through upper level managers. Hes even seeing workers talk their own companies into a pay raise, rather than risk losing them.

We had four successful placements in just the past couple weeks, Pelczarski said in late September. Things have been trending this way for a while. Last year also was strong, but Id say this year is definitely stronger.

Weve seen a dramatic shift in the job market in the past two years, commented Patrick Walsh, president of Texas Refinery Corp. in Fort Worth, Texas. Down here in Texas theres always an ebb and flow of oil patch work, every eight to 10 years. But now the job market is as tight as Ive ever seen it. A young man can get a job driving an oilfield truck for $100,000 a year, and a $10,000 signing bonus is not unheard of. Thats having a ripple effect on pay throughout the region, he said.

Against this bustling backdrop, over 200 sales and marketing managers responded to LubesnGreases exclusive 2018 Lubricants Industry Salary Survey. They reported taking home an average of $150,429 a year-7 percent more than the $140,413 shown in our 2016 survey.

With the top response weighing in at $390,000, a few highly compensated individuals may have lifted the 2018 average. So heres another data point from our 221 qualified participants: Their median pay is $133,000, meaning half of the respondents earn more than that and half make less. The median reported in 2016 was $131,000.

Readers should keep in mind that each biennial survey taps a fresh pool of participants who differ from the prior time, so no direct up-down comparison should be made. If the findings go up, it does not prove that compensation has climbed for everyone. It just means that this years cohort report making more than 2016s group.

Profiles in Sales

What sort of person will you find running a sales team at a lube company? The typical sales and marketing manager who answered this years survey is 52 years old and has over 22 years of industry experience, including almost 13 with their current employer. This years sales and marketing respondents included 18 women (8 percent of the participants).

Sixty-one percent of all respondents are individuals working for lubricant manufacturing companies, the rest for lube distributors. Sales managers with manufacturers said theyve held their current position for an average of six years and supervise eight people; its 10 years of tenure and nine direct-reports for those with lube distributors.

Tenure is under pressure now, believes Walsh. Trying to find qualified applicants and keep good people is a top concern, he said. We use a recruiter to bring in sales staff, and also to help our five sales managers to train and motivate their staff. Sales are up, and were having one of our best years in the past 20, but even so, Id say weve lost 4 to 5 percent of our people in the last couple years, usually because they went elsewhere for more money. The whole Dallas-Fort Worth region is short on manpower, and folks see that jobs are easy to come by. Theres no stigma anymore for job-hopping, so its easy to move.

Higher pay alone cant combat turnover, he continued. Were also taking special care to listen and be attentive to all our employees. I wouldnt say were walking on eggshells, but we know we have to be alert to their needs. I cant afford to be dismissive of any complaint or grumble-I pay close attention and address any problems immediately. Thats important to communicating the culture and philosophy of this family-owned business.

Manufacturings Edge

The pay gap between lubricant manufacturing companies and lubricant distributors has been observed in past salary surveys, and this year repeated the trend. The median pay for respondents who work for lubricant manufacturers was almost $150,000, but $115,000 for those at lube distributors.

That difference is due in part to who youre calling on, suggested Curt Knapp, chief operating officer in Omaha, Nebraska, for Warren Distribution, one of the countrys largest lubricant manufacturers with four blending plants and around 765 employees. Generally, lube blending companies are calling directly on the principals of large organizations, while distributors tend to have fewer large accounts and their people are calling on the mom-and-pop outfits up and down the street.

Definitely, both have been increasing pay over the last couple years, remarked Perez, but typically we see blenders offering a larger base salary plus a bonus, while distributors more often offer their salespeople a smaller base salary plus commission on gross profit. Still, its not unusual to see a distributor sales rep get $90,000 plus bonus, while the sales manager makes $150,000 plus bonus.

The compensation we see offered by distributors typically is about 10 to 20 percent behind what lube manufacturers offer, stated Pelczarski. Distributors usually are working on tighter budgets, and they have more of a customer-facing role. So on money alone, they cannot compete with the blenders or additive or base oil companies for the top candidates. Those kinds of companies demand a broader skill set and greater technical knowledge, so a less experienced person may hesitate to go that way. But they still can do very well on the distribution side.

More to Consider

What else makes a difference on payday? These factors do, the survey found:

Employer Size. Simply put, pay rises with company size, as shown in the graphics above.

Number Supervised. As youd expect, both lubricant manufacturers and distributors reward more richly their managers overseeing a larger staff. Sales and marketing managers with five or fewer people under them made $145,100 at manufacturing companies and $99,800 at distributorships. That rose to a respective $181,800 and $142,900 for managers with six to 12 direct reports, and topped out at $204,800 and $180,000, respectively, for supervising more than 12 people.

Geographic Area. Pay for sales and marketing managers is competitive everywhere, as the map on page 26 shows. But for a shot at the top tier of pay, you may want to head to the Southwest. The average reported there was $167,500 a year (median: $155,000).

That the Southwest ranks first doesnt surprise Tyler Jark, vice president of sales at contract blender Lubricating Specialties Co. in Pico Rivera, California. Its a very competitive, tight job market here, and that has reverberated across all industries, he said. In California, wages are going up, and that hurts on the plant side of our operations. Virtually all our sales managers and staff have to come from outside the industry, because its tough to find local people on the West Coast with experience in lubricants.

With a staff of around 220 employees in the Los Angeles area and Jamaica, LSC sometimes uses recruiters to fill key positions, but more often relies on industry word-of-mouth and local networking, Jark said. When looking, we put out the word and that usually results in quite a few inquiries. I may also try LinkedIn next time, he added.

All regions are feeling the worker shortage, said Knapp at Warren Distribution. Everywhere we operate around the country, were seeing the same competition for hiring in manufacturing and distribution. Its particularly tough in the Omaha metro area, where unemployment is virtually nothing. In West Virginia, the job market is impacted by the fracking industries, and that puts pressure on hiring. In Alabama, were a little insulated because our plant is in a more remote area, about an hour and a half from Birmingham, so that works in our favor. But in Houston we have the same challenges as everyone.

It helps that were consistently spending to grow and reinvesting in the business, Knapp went on. Thats appealing for employees to see. Look at our new Houston blending plant, which began operating this year. Its the Taj Mahal of blending plants, a state-of-the-art plant where people can see that weve invested heavily, and they are excited to come to work there.

The CLS Factor

The survey also asked managers if they hold Certified Lubrication Specialist credentials from the Society of Tribologists & Lubrication Engineers. Forty-six participants (21 percent) said yes. These individuals report markedly higher earnings than other sales and marketing pros. Those with CLS said they made an average of $156,800 a year, a 5 percent premium over their non-CLS peers.

Some suggest that individuals who get CLS are already motivated, well-trained and engaged in their careers, and they would be high-earners in any case. Yet, many lube companies put great store in CLS, as well as the National Lubricating Grease Institutes CLGS program for grease experts, said Texas Refinerys Walsh.

We urge all our employees on the sales side to get certified, he commented. When calling on manufacturing clients, CLS or CLGS is good to show that you have the foundation needed to know what youre talking about.

And a lack of CLS is no deal-breaker, assured LSCs Jark. Any professional certification would be fantastic and preferred-but were certainly not requiring that, he said. For us, its more important that the person be able to understand our company and our products and packaging.

More to Come?

Asked if theyd received a pay raise in the past 12 months, two-thirds of respondents with lubricant manufacturers said yes, but only 46 percent of those with distributors. Optimistically, 68 percent of all respondents say they expect to pocket a bonus this year. And a bit more than one-third say that commissions are part of their pay packet.

Its critical to structure bonuses and commissions correctly, said the head of a company who oversees multiple U.S. blending plants. Typically, our salespeoples compensation is structured with 70 to 80 percent in base pay, and the rest is incentives based on their performance and the company performance.

Chief Operating Officer Darrin Ward of Coolants Plus in Hamilton, Ohio, also relies on these incentives to build sales. Launched in 2001 with four people and now having 75 on staff, the company is emphasizing two key pieces of business: its Starfire lubricants brand for distributors; and a private-label blending arm called Pennstar, which operates a plant in Pennsylvania. To accelerate their growth, the company shares out bonuses liberally.

Our sales professionals earn a nice base salary, Ward said, plus a bonus incentive based on the gross profits of their deals, not on gallons sold or deal volumes. The firms monthly profit goal also is shared companywide to spur teamwork. All have a financial stake in the outcome, including warehouse workers and hourly employees. They all get the monthly bonus if we hit our gross profit goal.

The bonus schedule at TRC has been fine-tuned, too, said Walsh. His companys sales managers direct an army of independent reps. Before, the bonus was paid annually, but now its monthly. Awarding it more frequently means we can incent quickly or use it to promote special programs. The sales team is getting rewarded faster, and I think were seeing a little better sales performance, too.

Landing the Big Catch

As hes working to fill several sales leadership roles now, Perez at ERI is finding the best candidates are often already employed and happy in their positions, so they dont want or need to move. Its a tight, tight job market.

Ward agreed. Fact is, people who are good at selling lubes get treated very well by their companies, so they are not willing to move. If someone is seeking to make a move, it may be a sign that theyre not as good as you thought they were. Whats his favorite source of fresh talent? We like to hire young folks straight out of college, then they can learn our company and our core culture from the bottom up, Ward replied.

When interviewing, time is of the essence, Pelichems Pelczarski emphasized. Companies always have had to move quickly on good candidates, who can be lost to another company if you take too much time anyways, but now its especially so. Theres upward pressure on compensation, too, and because everyone is dealing within this very tight market, you have to be competitive on pay. You expect higher compensation-more money-to go along with any job search, but candidates are looking for a total package and a good fit. Still, all else being equal, if one company makes a little better offer than another, theyre going to accept the better one.

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