MAPP: Inflation in competition with plastics salary increases

Salaries continue to rise in the plastics industry, but more than half of the raises are not keeping up with inflation.

Only 43 percent of the wages analyzed by the Manufacturers Association for Plastics Processors  increased by more than the current U.S. inflation rate of 5.4 percent, a new study sponsored by MBS Advisors shows.

The overall average salary increase covered in the report is 5.2 percent, slightly below inflation, according to MAPP's 2021 Wage and Salary Report.

"This is unsurprising, as the rate of inflation has more than tripled since January 2021 and is the highest it has been since 2008," the report states.

A total of 86 percent of all positions covered in the report are seeing higher wages, led by a 19.5 percent hike for human resources directors and managers, a 14.3 percent jump for purchasing directors and managers and a 13.9 percent jump for operations or assembly associates.

Chief inspectors, meanwhile, saw an increase of 13.4 percent and even temporary workers had salaries increase by 12.9 percent.

"The drastic growth in these salaries could be attributed to the difference in participation between the 2020 and 2021 reports," the new report states.

This year's report features greater participation by companies with more than $50 million in annual sales compared with last year as well as less participation by companies making less than $5 million per year.

While many positions saw dramatic increases in salaries, there are others that did not fare as well.

About 14 percent of the positions included in the report saw compensation reductions year over year, with the largest drops belonging to tooling engineers, down 8.04 percent; TS/QS/ISO coordinators, off by 8.03 percent; and semi-skilled technical employees, down 5.41 percent. Other notable wage losses belong to continuous improvement directors/managers with a decrease of 4.53 percent and machinists/CNC operators down 4.26 percent.

Nearly all of the companies taking part in the survey, 94 percent, indicated they expect to hire more people during the next year. That is an increase from 79 percent last year and 86 percent in 2019.

Regarding employee turnover, 18.8 percent of the respondents indicated a rate of more than 30 percent, while 4.46 percent fell within the 26-30 percent range. Another 3.47 percent of participating companies said they had turnover of less than 1 percent and 24.3 percent of companies said the rate would be 1-5 percent.

Along with tracking specific salaries across the plastics industry, the survey also has noticed the way companies are compensating employees has changed over time.

About half of the respondents from 2011 to 2014 indicated pay raises were tied to performance. That number has jumped to 81 percent during the past two years.

"Utilizing a performance-based pay increase system has become more attractive to manufacturing organizations, as the opportunity for increased pay is thought to increase employee retention, motivation and overall productivity," the report states. "However, a smaller percentage of organizations continue to grant across-the-board increases, cost of living adjustments and length of service salary increases."

Less than 1 percent of the reporting companies do not offer standard or merit annual pay increases.

This is the 19th year for the MAPP trade group's salary report, which includes data on more than 60 specific jobs. The latest report represents more than 20,000 workers in 36 states.

"Especially this year, companies need accurate and comprehensive data to ensure they make informed and data-driven decisions regarding compensation and payroll. This report allows companies across the U.S. of all sizes to benchmark positions and determine competitive market salaries to attract and retain talent," Ian Gjertson, MAPP analytics director, said in a statement.