Careers and Workforce

2016 Salary Survey Results: Haves and Have-Nots

Food Processing's 2016 Salary Survey unveils a growing group of professionals being left behind.

By Kevin T. Higgins, Managing Editor

At first blush, feedback from food and beverage professionals to Food Processing’s 10th annual Salary & Job Satisfaction Survey suggests an industry on the march, with surging performance raising salaries and benefits across the board.

Would that it were true.

Pay hikes averaged 3.26 percent last year, the most bullish bump in at least five years. Compensation levels averaged $93,883, with a median salary of $85,000 — down slightly from last year’s responses due to a younger respondent skew, but still enough to keep the home fires burning and the wolves at bay.

But anyone with a passing familiarity with the food and beverage business knows these are turbulent times. True, some of the largest corporations managed to increase profitability last year, but it came as a consequence of cost cutting that also impacted many employees. Fully one-quarter of survey respondents indicated they did not receive a pay increase, while the top wage gainers — paced by the Three Percenters, with 15 percent-plus hikes — drove up the overall average.

Not surprisingly, pay and job satisfaction levels differ markedly between those getting a double-digit pay increase and those getting bupkis.

Average wages are 18 percent higher in the first group, where more than two-thirds report being somewhat satisfied or very satisfied with their jobs. One quarter of the second group is somewhat dissatisfied or very dissatisfied, and given the opportunity to vent, they did.

“Lack of clear communication from directors and CEO to managers. Lack of communication across departments. No appreciation or regard for hard work done. Doing more than outlined in job description. Company culture lacking in honesty,” one disaffected R&D professional wrote — and she considers herself only somewhat dissatisfied.

“No reviews, and decreased my salary for the same job. Only offered telecommuting and flex time for compensation,” a more disgruntled worker complained. “Removal of benefits, no reviews or pay increases, more project demands,” chipped in a third.

Education levels and job classifications were similar between the two groups, though the Haves were more likely to be engineers and less likely to be in plant operations. Surprisingly, the better-rewarded group tended to feel less secure about their jobs, though they were far more likely to receive stock options, profit sharing or both. What really set the groups apart, however, were new and interesting challenges.

While almost half of the top wage-gainers indicate they are provided new and interesting challenges, only one-fourth of no-raise workers agree. Differences were even more significant when it came to opportunities for advancement and career development.

“Challenge” is a word that comes up repeatedly in comments from the Haves and is notable only in its lack-thereof for the Have-Nots. “The job is challenging and personally rewarding,” a woman who received a 10 percent pay hike wrote. “The pay and incentives could be better, but the lifestyle quality makes it hard to look outside.”

Filling roster spots

Challenging work consistently ranks as the most important factor in job satisfaction in this annual survey, though the gap in importance between work challenges and salary & benefits narrowed considerably this year. Only 3 percent more professionals ranked it above financial aspects, compared to the more typical 11 percentage last year.

The satisfaction trend is subtle but unmistakable: While almost two-thirds two years ago indicated they were somewhat or very satisfied, 60.6 percent put themselves in that category last year and only 58 percent this year. Conversely, the proportion of food professionals who are somewhat or very dissatisfied is trending upward, with almost one quarter  placing themselves in those categories, up from 20.1 percent two years ago.

For corporations, a growing challenge will be recruitment and retention of the talent required to operate a modern food company. Compounding the challenge is the earlier exit of older employees. The proportion of workers 66 and older is slowly dwindling, and the ones who remain in the workforce are earning less. For them, work may be its own reward. A quality assurance professional over 65 with a salary well below the median wrote, “Enjoy what I am doing, and it keeps me mentally active at my age.”

Whether they find work stimulating or drudgery, they are inching toward the exit door. The retirement age population will increase by 31 million over the next 20 years, according to the U.S. Social Security Administration, and more than a few of them will be ex-food professionals. The exodus of millions of baby boomers from the American workforce is creating panic in many quarters over a looming shortage of skilled workers. In the food industry, the reaction is more muted.

Given multiple action plans to describe how older workers’ retirements were impacting compensation strategies at their firms, three-quarters of respondents say no adjustments are being made. Entry-level salaries are being increased at 14.4 percent of companies, while recruitment bonuses, enhanced benefit plans and across the board pay and bonus increases are in effect at 4 percent or fewer.

Pay scales in food traditionally have trailed other industries. A recent study by economic development authorities in Northeast Indiana pegged food workers’ wages at 71.2 cents to every dollar earned in other manufacturing sectors. Better benefits may be the antidote. Topping survey respondents’ benefits wish list is extended or enhanced health care.

Confusion and misinformation swirled around the introduction of the Affordable Care Act, popularly known as Obamacare. Full roll out was completed in 2014, so this year’s survey seemed an opportune time to ask how Obamacare impacted out-of-pocket medical costs last year, compared to 2014.

Almost half indicated copays, deductibles and insurance premiums were the same or lower in 2015. A slight majority reported higher out-of-pocket costs, though in some cases it was the result of a serious illness. Most of the rest purchased private insurance through a health insurance exchange. Less than 1 percent indicated their employer’s group policy was cancelled.

Asked, “What benefits would you like your employer to offer?” one in eight answered new or better medical, dental, vision and hearing coverage. Flex time or the option to work at home also were highly desired. A sales and marketing professional in her 20s specified flex time as a positive counterpoint to substandard pay and a somewhat dissatisfied job evaluation.

Pension plans and a 401(k) with an employer match are other in-demand benefits, followed by fitness memberships. One maintenance professional took wellness care to the next level, suggesting bicycle tune-ups as an added benefit. A quality assurance worker who praised her employer commented, “Another benefit (not listed) which I appreciate … is compensation for community service.”

Show me the money

The pay envelope tops the benefits list for many, however. A quality assurance professional with a compensation package north of $250,000 complained, “Actually give raises and quit cutting bonus amounts for reasons that have nothing to do with your job.”

His experience is the exception. By and large, respondents who didn’t get a raise — the Have Nots — are younger and skew female. That’s a volatile combination, given the growing presence of women in the ranks of food professionals. Workers under 40 constituted a quarter of this year’s survey pool, and a majority of them were women.

Low or no raises may be a calculated move. “We are hiring young, inexperienced people at lower salaries and replacing our highly experienced, highly compensated employees,” a corporate manager at a protein-processing firm wrote.

On the other hand, well-motivated young professionals could be the antidote to the exodus of older workers. “Company is progressive,” wrote one respondent. “Founded by retirees in their 60s and 70s, they are building the company's tech and future programs using young and well-educated employees to carry the ball and, at the same time, build its future.”

Hopefully, their efforts will push them into the Haves column.