Manufacturing Industry Hiring Practices
Executive benefit packages for small- to medium-sized companies typically include the care benefits offered to most employees with additional supplemental benefits including executive medical and life insurance, executive retirement plan, club memberships, use of a company vehicle, college tuition for children, golden parachute provisions, extra or unlimited PTO, and termination or severance provisions.
Benefit Packages Overview
- Economics and Statistics Administration data shows manufacturers offer some of the best benefits packages.
- Benefits packages often add 60% to a job's value monetarily.
- Family-friendly benefits such as paid sabbaticals, vacation, flexible schedules, compressed work weeks, and childcare supplements and parental leave attract quality employees.
- Employers are focused on employee and workplace wellness, including stress reduction.
- Employees are most interested in health care, retirement, workplace flexibility, wellness programs, and tuition reimbursement benefits.
- Employers can offer a defined-structure benefits package with specific benefits or offer employees a “budget” to customize their benefits based on the choices provided.
- Most employee benefits are non-negotiable, but executive benefits are often supplemental to general offerings.
- Supplemental executive benefits can include (excluding any compensation related) executive medical and life insurance, executive retirement plan, club memberships, company car, college tuition for children, golden parachute provisions, extra PTO, use of a company vehicle, and termination (or severance) provisions.
- Executive job seekers are encouraged to research similar size and type companies to compare benefit offerings.
- Manufacturers typically provide major medical, dental, life, vision, and disability benefits.
- While large companies often cover 100% of employee premiums and 50% of dependent premiums, small companies have the options of voluntary benefits and supplemental health insurance options.
- For example, Connectrac offers a “comprehensive medical, dental and vision insurance”.
- Economics and Statistics Administrative data shows 32% of manufacturing jobs provide some type of defined benefit plan including 401(k) plans.
- Connectrac offers a 401k savings plan “with generous company match”.
Paid Time Off (PTO)
- A recent trend is to offer unlimited PTO to executive-level employees.
- Executives are not likely to abuse unlimited PTO and require the flexibility of this type of unlimited leave program offers.
- Since executives often delay taking time off, employers might require that a minimum number of hours are required to be taken annually.
- Requiring an approval process ensures full transparency.
- Connectrac offers generous PTO.
- A severance clause protects the new executive if they are fired without good cause.
- Legally, if employed at-will, an employee can be terminated at any time and for any reason.
- Contracted executives have more power to negotiate contingent on the terms of the contract.
- Executives are encouraged to request a severance clause in an employment agreement or offer letter.
- If a severance clause is not included in an employment agreement or offer letter, the executive has no right to severance pay, but it is not uncommon for employers to offer severance in situations including downsizing, closing a manufacturing facility, merger or acquisition, encourage early retirement, or to avoid a lawsuit.
- Severance clauses are likely voided for gross misconduct, embezzlement, or dereliction of duties.
- Severance contracts typically include a definition of the cause if the termination is due to cause.
- Commonly, a severance agreement typically includes a non-compete clause and a release of claims waiver.
- 87% of large companies in all industries offer severance packages to senior executives.
- 89% of large manufacturing companies offer severance to senior executives.
- Executive level severance can include health insurance continuation, retirement benefits, bonus payout, outplacement services, life insurance continuation, financial planning services, the continuation of stock options, short- and/or long-term disability, and education and retraining.
A careful review of available human resource, manufacturing-specific, government literature and market research did not produce information specific to businesses of 50-65 employees. We included advanced research into case studies and academic journals and did not find the specific information requested.
We did find that manufacturing companies tend to offer some of the best benefits packages but this information was not specific to executives.
Next, we expanded our search to include all executive-level jobs in all industry to get an overview of current trends. We expanded our search to include all c-suite and executive level jobs to get a general overview of the benefit offerings in the executive market. An economic report indicated the unemployment rate for management and professionals. Because of the tight labor market, we felt it necessary to expand the search to provide an overview of benefits trends for executives and management as larger manufacturing companies are competing for the same labor pool.
Then we attempted to narrow the search by reviewing Fortune Magazine's 2018 list of small and medium-sized companies to identify similarly sized (employee count and/or revenue) manufacturing companies to try to determine the benefit packages offered and severance clauses in employment offerings. This search produced one manufacturing company, Connectrac, manufacturer of building materials with 53 employees. A review of the Connectrac website did not reveal useful information so we expanded our search to include other sources, including LinkedIn and Glassdoor.
We found a current position posting on Glassdoor for a Chief Operating Officer for Connectrac that also provides the benefits offered. The benefits provided were basic and did not include severance information. LinkedIn did not provide current job postings or any detail on benefits packages.
Next, we focused on severance packages. While there is no specific information for small- to medium-sized companies we found that severance clauses and packages are increasingly common and new executives are encouraged to request one.
Finally, we included data from a market report that is global in nature and limits the pool of data to companies with more than 500 employees, the data is insightful and does provide important information on trends in manufacturing employment.