Pulp & Paper’s survey responses indicate that economic pressures are making the industry less attractive for long-term employment, despite salary increases

Bottom-Line Focus, Downsizing Offset Benefits of Median Salary Increase

Although many of the comments received were negative, morale numbers have not changed significantly since 1992. As Table 3 shows, job satisfaction has remained about the same throughout the 1990s—with most respondents rating morale at 3 out of 5. These numbers are probably due to several factors. First and foremost, despite the economics and politics of the industry, many employees truly enjoy what they do. “I still enjoy parts of my job,” said one respondent from a Midwestern pulp and paper mill, but “downsizing has hurt morale and increased workload at this plant.” Another reason for the steady morale numbers may be the high job satisfaction ratings of those in upper-level positions. As a research and development department employee from the Northeast noted: “Management seems blissfully unaware of just how low morale is in the lower ranks … Recent downsizing has placed a tremendous amount of stress on our workplace. There has been a sacrifice in quality and quantity of work.”

In many areas of this year’s survey, figures stayed similar to those of past years. Despite some higher numbers than for 1996, benefits (Table 2) have actually remained at a steady level since 1992. The average amount of bonuses and overtime pay has not changed from the 1996 level of $6,000. But one number that fell sharply is worth noting. When asked if they would stay in the industry when changing jobs, only 48% of this year’s respondents said “yes.” This number is down significantly from 1996, when 56% said they would stay in the industry. In 1994, that number was 59%. This finding was echoed by an upper-level manager at a Northeastern pulp and paper mill who stated: “Our most recent experience indicates that our employees leave for another industry at a far greater frequency than, say, five years ago.”

For the second time, the average age of respondents went up slightly, from 44 in 1996 to 45 in this year’s survey. Despite this increase, older employees once again complained of being unappreciated and even pressured to leave their jobs to make room for younger, lower paid—and less experienced—replacements. Their comments are supported by the figures, which show salaries at the upper levels flat since 1996 (Table 1). As one 38-year-old part-time employee said: “Right now, the newbies have taken over. If you are over 40 and not a V.P., forget it. I will really miss the experienced managers that are being forced out—and I think our stockholders will, too.”

BACKGROUND OF THE SURVEY. Pulp & Paper’s survey report is based on a questionnaire included in the March 1999 issue. Information from the returned forms was processed by an independent data-processing firm according to Pulp & Paper’s specifications. Data from the most recent survey are compared with data from previous surveys to provide readers a perspective on changes in compensation, benefits, and employee attitudes.

The survey report is designed to compare the progress of employees (specifically engineers) in the paper industry—on the supplier and consulting sides as well as manufacturing—with that of their peers in various other disciplines. In addition, the report compares the salaries of specific engineering types and functions within the paper industry.

AN OVERALL PROFILE. As Table 1 shows, salaries have increased across the board, with the exception of the upper decile. The median salary, now at $71,000, saw the highest percentage of change—up 9% from the 1996 average of $65,000. The lack of increase in salaries at the highest decile may be caused by companies striving to replace higher-earning older employees, while the rise in the median salary could be the result of efforts to keep younger engineers in the industry.

When it comes to benefits, not much has changed in the past six years. Although this year’s percentage of employees with dental insurance and bonus plans went up since the 1996 survey, the numbers are now simply closer to their early ’90s levels. In fact, most respondents felt that poor treatment by employers is one of the main reasons so many are choosing to leave the industry. Said one: “It seems the paper industry is light years behind in employee morale and human relations.”

Many expressed frustration at their employers’ criteria for raises and promotions, particularly in light of the heavy workload created by downsizing and restructuring. “I wish the criterion for salary adjustments were more clear cut, and that we had a clear, consistently administered performance appraisal system,” a Midwestern consultant said. And a Canadian respondent explained it this way: “Internal politics and poor management practices taint an otherwise satisfying job in a good industry … the past few years have seen a fairly high percentage of trained and skilled people leave to work in other industries.”

Of those who responded to this survey, a majority are engineers. The largest categories include mechanical and chemical engineers (at 16% each) as well as those holding paper science and technology degrees (15%). Respondents with business degrees make up 20% of the survey.

Other statistics for respondents include the following:

Personal.

• With no change reported since the last survey, 92% of respondents were male with only 8% female.

• Most respondents have bachelor’s degrees (54%), and 27% have advanced degrees.

• The majority of respondents work for a wood products/pulp and paper manufacturer (78%) in either production/mill operations (24%), engineering/maintenance (16%), technical service/quality control (15%), engineering design/construction (13%), or administration (11%). Eight percent work in research and development, an additional 7% in sales and marketing, 4% in consulting, and 2% in product development.

• Respondents have worked for an average of two full-time employers during their careers, marking a decrease from the last survey and indicating a less experienced workforce. Most respondents (88%) have not changed employers in the past three years.

• The average number of years with one’s current employer is 10, up from 9 in the last survey.

• The average respondent works 48 hours/week, the same number reported in the past two surveys.

• Down 1% from the last survey, 86% have some type of management responsibility. The largest number have team or unit (24%), followed by major department or division management (22%), indirect or staff (20%), project or section (15%), and corporate management (6%). The median number of people managed jumped from 14 in the last survey to 18, with most managers reporting around 10 years of management experience.

• Thirty-nine percent of respondents came to the paper industry from another industry.

Compensation. There was an average of three salary increases in the past three years.

• Respondents averaged 11 paid holidays and four weeks of paid vacation.

Most salaries are reviewed annually (91%) and are based on perfor- mance/merit (56%), cost of living (7%), or both (27%).

• More than 45% have been promoted one or more times in the past three years.

• Most respondents said promotions in their companies are based on performance/merit (69%), politics (25%), and degree/job function (14%). Only 6% of promotions were given on the basis of seniority.

• Most (82%) said their companies do not pay for overtime.

CONTINUING DISSATISFACTION. Many respondents to this year’s survey complained that downsizing and restructuring has created a larger workload for smaller staffs. “We continue to be required to do more with fewer resources,” a Midwestern respondent in technical services/quality control said, asking: “Do our leaders actually think this is a good long-term strategy?”

And despite the advances made in many other industries, women remain underrepresented in the paper industry. Once again, only 8% of respondents were women. “Women are still treated like second-class citizens,” said a female employee of a Midwest pulp and paper manufacturer. “Too much ‘good old boy’ … makes it worse. The only reason we stay is the money. But I’m leaving soon anyway, money or not.”

Despite the problems, most respondents (86%) continue to like their jobs. “If not for the swing-shift aspect of the…position, there is no better place to be,” said a shift operations manager in the Southeast. “Of course, the big factor in determining job satisfaction is your immediate supervisor. You can only be as good as they allow or support you. I have an excellent supervisor in my present position.” A Midwestern research and development employee agreed: “The paper industry is a good career choice, despite the swings in business.”

Still, the paper industry’s economic woes can be felt by employers and employees alike. “Staffing cuts and re-direction are taking a toll on all levels of employees,” commented a Midwestern respondent, “without a reduction of tasks that are to be completed each day. Some streamlining is okay, but an excessive amount is viewed as an easy way for a company to save big bucks. At the expense of its own employees, this drives down morale, eventually product reliability, and quality. People either get burned out or disgusted. Then they leave the company, causing further staffing problems and high attrition, along with a great loss of experience.” Another Midwestern pulp and paper manufacturing employee stated his frustration bluntly: “Long hours—no help, but plenty of blame when things go wrong.”

The sidebar, “Reader Opinions,” gives an indication of respondents’ attitudes toward their jobs and the pulp and paper industry.

EFFECTS ON INCOME. Figures 1 and 2 and Tables 4, 5, and 6 present survey findings on compensations compared with a number of variables, including division of wood/pulp and paper company, number of years of management experience, principal work function, supervisory management level, and educational field. Salaries are shown in all tables, and figures were obtained by adding any bonuses or additional income reported by respondents to their gross salaries.

FIGURE 1: Income and division of wood/pulp and paper company.

Figure 1 compares income by specific division of wood/pulp and paper company respondents. Respondents in corporate administration have the highest median salary, at approximately $92,000 (up slightly from $90,000 in 1996). R&D divisions saw the median salary jump from $73,000 to $81,000, and employees in pulp/paper/board divisions experienced a median increase from $65,000 to $73,000. According to the survey, those working in chemical byproducts, woodlands operations, and wood products saw median salaries actually decrease in the past two years. However, these numbers may be skewed by the small number of responses received in the three areas.

FIGURE 2: Income and number of years of management experience.

Figure 2 shows the effect of management experience on income level. Interestingly, the flat salaries for upper decile employees are mirrored here in an income downturn experienced by those with 21 to 25 years experience. This number rises again with a median income of $96,000 for employees with 31 years or more experience.

Table 4, which compares income and principal work function, illustrates that respondents in consultation have the highest median salary ($98,000). This number represents a 13% increase over 1996. Sales and marketing comes in second with a median salary of $87,000—only a 2% increase from two years ago. Production and mill/plan operation employees, with a median salary of $80,000, saw the largest increase in median salary, 14% over 1996. Consultants’ higher salaries may be indicative of the gap they fill for companies that have streamlined operations by downsizing. In addition, sales and marketing, while a generally well-paid profession, has probably not seen large increases in pay because of tight corporate economic policies.

Table 5 shows the expected salary progression as respondents move up the management ladder. Corporate managers not only have the highest median salary ($131,000) but also saw their income jump by 21% within the past two years—far surpassing the rise in income of any other management category. Major department or division heads continue to make higher salaries than project and section managers, although the gap in median salaries is closing. And while team, unit, project and section managers experienced a 15% increase in salary over the past two years, employees with no supervisory experience are making slightly less today than they did two years ago.

Table 6 compares income with educational field of respondents. Although civil and industrial engineers reported the highest median salaries and environmental science, they saw the only decrease this year, sample sizes were too small for these groups to draw any concrete conclusions. Most other respondents with engineering degrees reported similar median salaries ($77,000 to $79,000). In a break with recent surveys, those with business degrees ($76,000) no longer boast higher salaries than their engineering counterparts.

“Demands on management in this industry are intense and will require greater talent in the year 2000 and beyond,” concluded a Northwest region veteran administrator with more than 30 years industry experience. “Industry CEOs must lead change to accept and accomplish a sustainable ‘triple bottom line’—economic, environmental, and social—whether operating in North America or offshore.”

Osie Gabriel Adelfang is a freelance writer located in Huntsville, Ala.