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The State of Manufacturing

Early in my career at PayScale, I worked with a manufacturing company that had recently done some merging. In fact, they had four different regions in the U.S. and another three in Canada, each on their own HRIS systems and even worse, each on their own payroll systems. Identifying the current pay for all employees across the organization was a beast. Finding out whether that pay was right or not was even harder when they had a bunch of instances where jobs were called the same thing but were at different levels. The inverse was also true, where they had in some cases dozens of unique titles for the same exact job.

Working with an HR leader who had full executive support, we scrapped all their internal titles and rebuilt their new organization job by job and level by level. At the end of the day, they found out that they were off in some areas, but mostly right on par with the market. The HR leader was thrilled because now he could finally tell the story of how well they were paying at their organization.

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This story may sound familiar to many manufacturing organizations out there. According to the most recent PayScale Q1 2017 Index, manufacturing industry wages continue to trend up on par with U.S. national trends, indicating some strength in the area.

It turns out this scale of merger and acquisition (M&A) activity is not unheard of for manufacturing organizations in the face of consistent growth. In the 2017 Compensation Best Practices Report, we found that 17 percent of manufacturing organizations engaged in M&A activity last year (vs. 14 percent of all organizations). In the same report with 7,700 respondents, we asked upward of a hundred questions of all types of industries. We gathered the 600+ manufacturing industry results together in this Manufacturing Industry Fact Sheet.

The manufacturing industry followed the trends in a lot of cases, with a few key departures. For example:

  • We found that the manufacturing industry, on the whole, tends to employ fewer millennials than other industries.
  • Manufacturing companies are more likely to pay for performance than other industries. This is especially true with variable pay.
  • The manufacturing industry was more likely to feel the impact of minimum wage changes, and the changes impacted compensation strategies in 2016.
  • More than in other industries, manufacturing companies have identified location as a barrier to filling competitive jobs.

We’ve gathered tons of compensation best practices carried out by your manufacturing peers. We hope you’ll find them useful. Check it out here.

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Do you see these trends in your organization? We want to hear from you. Tell us your story in the comments.

Mykkah Herner
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