Hiring the best people is not all about compensation, but that is a significant piece of it. This article is targeted to those who are seeing some (or all) of the following:
- It is getting harder to find top performers that are open to making a job change.
- If you do find them, they have multiple offers or get a counteroffer, so you are in a bidding war.
- You must choose between “paying up” and maintaining internal equity.
If you are a hiring manager, HR manager, or in a similar position, and are experiencing what seems like salary inflation within the plastics industry, I can explain: There is salary inflation happening within the plastics industry.
For us, this is mostly anecdotal right now, but will show out in subsequent surveys. Surveys are always backward looking. The norm right now for candidates we are placing is about 10 to 15% above the compensation target that the company originally is targeting, with overall increases typically in the 20 to 30% range. If you just said, “Wow,” I agree.
But there is another factor that is not new, and that many companies either are not consciously aware of or are in a bit of denial. It can be summed up like this:
- There is always a wide range of compensation for any role, depending on factors like company size, cost of living at that location, degrees and skillsets required, years of experience, and so on.
- The top performers are typically compensated at least in the top 25% of that range.
- Companies are sometimes unwilling or unable to pay someone at that level, and hence may need to face the reality that they should not be trying to recruit those people.
Picture a simple bell curve for compensation for all polymer chemists with a master’s degree and seven-plus years of experience. The mid-point of that range is about $121,600, per salary.com (they call it Chemist IV). Looking at this, you might reasonably establish a hiring target in the $113K to 130K range, based on the midpoint plus or minus about 7%.
While that seems reasonable at first, the compensation at the 75th percentile is $133,750, and at the 90th percentile, $144,800. This means that the top performers will currently be in the $125K to 140K range, and anybody you hire will be expecting at least a 10 to 15% bump in this market.
About the author
Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].