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Researchers Develop High Pay


Researchers Develop High Pay

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 and Marketing Executives

December: Laboratory & Technical

Lubricants require an expert hand to bring together all of the components that make up a product. As the industry continues to cultivate oils that increase durability and performance, research and development and technical managers will pave the way for better formulations and can expect to be rewarded accordingly.

Sixty-four laboratory and technical managers offered a glimpse into their compensation for the 2018 LubesnGreases Lubricants Industry Salary Survey. They reported earning an average of $140,025 and a median (where half make more and half earn less than that amount) of $140,000. All of the respondents work at lubricant manufacturers, since distributors do not develop formulations.

Direct comparisons cant be drawn against the data from 2016, since the pool of respondents is different in every biennial survey. Its worth noting, however, that 2018s cohort makes close to $6,300 more on average and $2,000 more in median compensation than what was reported two years ago. Similarly, the highest compensation was $310,000 this year-a 31 percent hike over the highest reported income in the previous survey.

The portion of respondents who reported receiving a raise in the past 12 months was essentially the same as two years ago at 77 percent. But other types of compensation (save for stock or equity, which was lower than 2016s total at 9 percent) tilted upward, including bonus expectation at 73 percent, commission at nearly 5 percent and profit sharing at close to 30 percent.

Surging Market

These generous figures indicate that working for a lube manufacturer, or the lubricant division of an oil major, is a good career path for those with a technical background. A May 26 article from the Wall Street Journal found that some of the highest median employee salaries in 2017 were in large energy companies, including oil and gas drillers as well as refiners.

After reviewing the financial statements that publicly held United States-based companies had to disclose this year under the Dodd-Frank Act of 2010, reporters Kelsey Gee and Theo Francis noted that median pay reported at oil companies like Valero, Phillips 66 and ExxonMobil was well over $150,000 per year. In ExxonMobils specific case, the typical worker earns $161,562 annually.

The opportunities seem to be there for the taking, according to several recruiters who spoke to LubesnGreases. Ken Pelczarski, principal at executive recruitment company Pelichem Associates in Downers Grove, Illinois, which focuses on the lubricants and additives industries, said that about 40 percent of his placements are on the R&D side, which includes technical support, quality management and analytical chemistry roles. Favorable business conditions, consumer confidence and job growth are all having a positive impact on the current job market, leading to fast-paced hiring for positions, he noted.

Commenting on the findings in the Wall Street Journal article, Pelczarski said that median salaries in the oil industry have historically been high, especially at large manufacturers. Oil companies often have regular hiring going on annually for advanced-degreed candidates from some of the top schools in the country, Pelczarski told LubesnGreases. He added that oil majors often have the resources to train individuals for a longer period of time and determine who has long-range potential to expand their skillset in a technical role.

Loren Perez, an executive recruiter with Energy Recruiters Inc. in Atlanta, concurred that hiring has been on the rise in the last 12 months. Theres been a hiring pickup, and lots of roles have opened up in the lubricants and additives business. We see it in every sector, from the majors to distributors to the [independent] blenders, and specifically on the metalworking fluids and industrial lubricants side.

Julie Schiller, executive recruiter at Dallas-based Milani Group, agreed that the market is busier than it has been in a while. In my process of recruiting for some of my clients, Ive talked to people in hiring positions for other companies in the industry who have indicated that they are hiring or intend to be in the near term.

She added that some companies are looking to fill technical positions, whether it be engineering positions or specialist positions to bring knowledge specific to the manufacturing of each product.

A Closer Look

Technical managers in 2018 look pretty similar to those who responded to the 2016 survey. They are an average of 50 years old, tout 22 years of industry experience and supervise around 5 workers. This years lab managers have spent more time with their current employer (14 years versus 13), but less time in their current role (6 years compared to nearly 8 years).

For 72 percent of lab managers, who supervise five or fewer employees, compensation sits at close to $131,000 on average, with a median of $129,500. That rises steadily with more people supervised; 20 percent of respondents reported a mean of almost $147,000 and a median of $145,000 when overseeing six to 12 people. The remaining 8 percent of lab managers earn an average of almost $206,000 and a median of $190,000 for supervising more than 12 employees.

Contrary to what was seen for plant managers and sales executives this year, laboratory and technical managers saw their compensation rise based on longevity. The average salary for the 45 percent of respondents who have been in their role for less than five years is around $132,000, with a median of $135,000. For the remaining 55 percent who have spent five years or longer in their roles, average pay jumps to almost $147,000 and a median of $145,000.

What is surprising this year is the difference in pay for lab managers who hold a Certified Lubrication Specialist credential from the Society of Tribologists and Lubrication Engineers and those who do not. The average pay for a CLS-bearing lab manager is $135,000 against the almost $142,000 for someone without CLS, with medians of $130,000 and $148,000, respectively. In 2016, CLS credentialed managers reported an average of $146,900, while those not certified made $130,000.

As for raises, the survey found that 80 percent of non-CLS credentialed managers obtained a bump in their salaries compared with 67 percent of CLS lab managers. The expectation of a bonus also favored non-CLS managers, with 74 percent being confident of receiving extra money at the end of the year against 72 percent of those with CLS credentials.

Where CLS managers skew higher than their non-CLS counterparts is in lowest compensation reported ($70,000 vs. $47,000), commission (6 percent expect some against 4 percent) and profit sharing (39 percent vs. 26 percent). But Pelczarski noted that a CLS credential makes a candidate more desirable even if it doesnt necessarily translate to higher pay.

The desirability of a candidate is whats most influenced when you have a certification, because its a little more proof of having that practical knowledge, Pelczarski expanded. Certification also means a lot in the eyes of a customer, as far as the credibility of who theyre dealing with in sales or in technical support.

The Bigger Picture

The size of a company can be a contributing factor to higher wages. Forty-four percent of lab managers that responded to this years survey reported average salaries from $115,000 at companies with 11 to 50 employees to almost $151,000 at companies with 101 to 200 employees, and median pay of $110,000 to $160,000, respectively.

Compensation does dip for 8 percent of respondents working at lube manufacturers with 201 to 500 employees, where the average salary is $132,000 with a median of $110,000, but it climbs up to a mean of $155,000 and a median of $154,000 for 47 percent of lab managers, who are at the largest oil companies-those with over 500 employees on payroll.

Geography also influences paychecks. Forty-two respondents who work for lube manufacturers in the Central region of the U.S. reported mean earnings of $126,000 to $135,000. Companies in the Eastern part of the country hold the upper hand, with 20 lab managers averaging salaries of $143,000 in the Northeast and $172,000 in the Southeast. By far, however, the two respondents in the Southwest topped the rest at $186,500 on average.

Getting the Right Talent

When asked to rate how much job security they feel on a one-to-five scale (one being the least confident and five being the most), lab managers responded with a nearly 4.0 rating. By company size, the ones who work at the largest oil companies had the highest rating of all respondents, with 4.1 on average.

But lube manufacturers have to be able to attract the right talent before they can concentrate on keeping them. Wherever you are now, the hiring company has to be engaged with the candidate, and you cant space out interviews and call back someone after thinking it over for a few weeks. You need to make a job offer quickly, or someone else will snatch them up, said Perez. In this market, [candidates] can afford to be picky.

He added that getting Millennials with technical backgrounds to work in the oil industry is especially difficult, since many choose to work at large technology companies. The article from The Wall Street Journal reported that the technology sector had the second-highest median wages in 2018, but was outpaced by pharmaceuticals-which hires plenty of workers with R&D experience.

Theres certainly a stigma that people have about the [oil] industry, said Schiller of Milani Group. People who are graduating with chemistry or engineering degrees might be looking to go other routes and missing out on some really great opportunities.

The best thing companies can do is work on self-branding and on selling themselves to the best candidates, who are often the ones who arent looking to switch jobs, she advised. When youre talking about new grads or early-career professionals who maybe arent in the industry but have the skills and the knowledge to contribute, its got to be almost like a branding effort to say, Heres our company, heres our industry, and heres why its important.

The R&D aspect, for example, she highlighted. What could be more interesting than developing new products that are going to be able to be used through the change of the future?

Lisa Tocci contributed to this story.

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