The State of Manufacturing: Important Trends Affecting NEO Manufacturers

Marty Mordarski, SPHR, SHRM-SCPDirector, Research & Membership at ERC

Average Actual and Projected Base Pay Increases in NEO (2005-2015)

Source: 2015-2016 ERC Wage & Salary Adjustment Survey

Average Actual Base Pay Increases at Manufacturers in NEO (2005-2015)(By Employee Group)

Production, Maintenance, and Service Positions (Non-Union)

Production, Maintenance, and Service Positions (Union)

Clerical and Technical Positions

Supervisory, Management, and Professional Positions

Executive Positions

Source: 2015-2016 ERC Wage & Salary Adjustment Survey

Percent of NEO Employers that Provided Base Pay Increases

Source: 2015-2016 ERC Wage & Salary Adjustment Survey

NEO Manufacturers that Did Not Provide Base Pay Increases (2005-2015)(By Employee Group)

Production, Maintenance, and Service Positions (Non-Union)

Production, Maintenance, and Service Positions (Union)

Clerical and Technical Positions

Supervisory, Management, and Professional Positions

Executive PositionsSource: 2015-2016 ERC Wage & Salary Adjustment Survey

Most NEO manufacturers are increasing wages.But not by much.

$13.46

$15.57

$15.96

$16.43

$18.32

$20.00

$21.57

$10.00 $15.00 $20.00 $25.00

Warehouse Worker

Shipping/Receiving Clerk

Production Worker (Senior)

Assembler (Senior)

Maintenance Worker

Inspector (Senior)

CNC Machine Set Up/Operator (Senior)

2011 2012 2013 2014 2015

Source: ERC Wage Survey (2011-2015)

Average Hourly Pay for Select Positions in NEO (2011-2015)

That’s great, thank you. But now what?

Image credit: vdHoeven/NASA/JPL-Caltech/R. Kennicutt (Univ. of Arizona)/DSS Based on observations made with the NASA/ESA Hubble Space Telescope, and obtained from the Hubble Legacy Archive, which is a collaboration between the Space Telescope Science Institute (STScI/NASA), the Space Telescope European Coordinating Facility (ST-ECF/ESA) and the Canadian Astronomy Data Centre (CADC/NRC/CSA).

Image credit: vdHoeven/NASA/JPL-Caltech/R. Kennicutt (Univ. of Arizona)/DSS Based on observations made with the NASA/ESA Hubble Space Telescope, and obtained from the Hubble Legacy Archive, which is a collaboration between the Space Telescope Science Institute (STScI/NASA), the Space Telescope European Coordinating Facility (ST-ECF/ESA) and the Canadian Astronomy Data Centre (CADC/NRC/CSA).

DANGER: Reviewing data in a vacuum

Source: ERC/Smart Business Workplace Practices Survey (2012-2015)

What is your company’s biggest challenge?

Challenging/Meaningful Work 18.5%Compensation 16.7%Job Security 11.0%Work/Life Benefits 10.6%Benefits 6.8%Autonomy 5.1%Advancement 5.0%Leadership 4.9%Career Development 4.4%Product/Service Quality 2.5%

4.9%Average base pay increase for top performers at NorthCoast 99 award-winning manufacturers

(2015 NorthCoast 99 Winners)

What is your company’s biggest challenge?

What do top performers look for?

Source: 2015 NorthCoast 99 Top Performer Engagement Survey (N=8,727)

Convenience Relevance

DANGER: Bias what’s free

DANGER: Bias data that supports preconceived ideas

Not all data are created equal

• Measures of central tendency (avg/median)• Sample size (participants, observations)• Population (industry, geography, size)• Survey method (self vs. employer reported)• Matching method (title vs. job description)• Effective date / age of data

Okay, but what should I pay?

What do you want to pay?

• Lead, lag, or match the market?• Put a premium on experience, skills, shifts?• Pay for performance?• Ranges, grades, levels?• Internal equity?• Role of benefits (“total rewards”)?

• Insurance• Paid time off• Retirement (i.e. 401k match)• Stock options

And, oh, by the way….

Proposed changes to FLSA…

• Could raise the minimum weekly pay threshold from $455/week to $970/week.

• Any employee making less than $50,440 per year could be entitled to overtime (non-exempt).

• Changes may be finalized before the end of this year and go into effect in 2016.

This is too important to get wrong.

Visit for access to this presentation’s slides, free wage and salary survey results, information about compensation consulting, and other resources.

www.yourERC.com/stateofmanufacturing