How highly regarded is the biannual cross-industry compensation and benefits study among ASA distributor members looking to stay on top of the ever-challenging labor market?
“The biannual compensation report is the ‘Bible of the plumbing and PVF world,’” said Jack Bell, president and CEO of Louisville, Kentucky-based Masters’ Supply. “We utilize the compensation report for all positions in our company from a driver and warehouse employee to the president and CEO position. We compare our company in the different silos, including all firms, ASA members, private firms, sales in our range, our region and our territory. This allows us to create a good compensation package for current and new employees. I would recommend any ASA member to use the data from this report.”
The just-released 2022 study, sponsored by the Association Education Alliance, features data from 959 distribution companies representing more than 10,000 locations. ASA is one of 22 distribution-related associations that took part in the survey.
The study provides a detailed analysis of key compensation and benefits-related statistics for the distribution industry, including compensation benchmarks for more than 45 positions/job functions.
“The cross industry compensation report provides us with all the information we need to stay competitive in the industry when hiring and promoting employees,” said Reed White, president and managing principal of Operations at Denver, Colorado-based George T. Sanders Co. “We regularly check the industry benchmarks in the report to make sure we are compensating our employees well.”
The 63-page report is produced for ASA and the other distribution-related associations that took part in the massive study by Industry Insights, ASA’s long-time business intelligence partner.
“We have spent a lot of time analyzing the report to understand how we compare in all categories,” said John Howe, CEO of Birmingham, Alabama-based American Pipe & Supply. “While we compare favorably in most areas, we will be tweaking a few of our offerings to improve our competitiveness. It is a very useful report.”
The 2022 installment has some interesting findings as it relates to labor force participation rate, which tracks the percentage of the population that is either employed or actively seeking employment.
From 2002-2008, Industry Insights noted the labor force participation rate was around 66%. From 2014-2019, those numbers dipped to between 62-63%, the lowest since the 1970s. In the peak of the pandemic, those numbers dropped below 61%. April 2022 showed a rebound to 62.2%, which was still below the pre-pandemic level of 63.4% in February 2020.
“Post-pandemic, the demand for labor has far outpaced labor supply, which has created an environment of increased wage pressures,” Industry Insights wrote in the report’s Executive Summary.
In 2021, quit rates ballooned to 32.7% nationally in what many termed the “Great Resignation.” For this 2022 survey, the average reported turnover was at 20.6% and the quit rate was 14.8% for non-management employees. For non-management positions, half the respondents reported an average time to fill of 24 to 60 days, Industry Insights noted.
“As the recovery has accelerated faster than most had thought it would, strong demand continues to put an enormous strain on the supply chain and labor markets,” Industry Insights wrote.
That’s one of many key statistical nuggets contained in the report, which is free to ASA member distributor companies that contributed data, and can be purchased by both ASA members and non-members that did not participate in the survey.
“The ASA biannual cross industry compensation and benefits report is a reliable and comprehensive compensation tool that gives us a wealth of information for our company to analyze,” said Matt Laiolo, president of Oakland, California-based Rubenstein Supply. “We can review and evaluate our compensation levels and compare them to other companies in our industry. It forces us to look internally and evaluate ourselves.”
Industry Insights noted staffing pressures and inflation have been two of the most pressing issues facing most industries over the last 12-18 months. This was echoed by survey respondents. The top three concerns/issues reported were finding qualified employees (73%), retaining employees (48%) and increased operating costs (36%). As the size of company increased, retaining employees increased in its importance to survey respondents. This was reinforced by the fact larger firms reported much higher turnover and quit rates than the smaller companies, Industry Insights reported.
Other key items contained in the report include: the top five major concerns/issues related to the labor market; top methods used to successfully fill open positions; percentage of insurance premiums paid by the company for full-time employees; types of retirement plans offered; top 10 other benefits provided to employees; capping mechanisms used to limit incentive pay for salespeople; when commissions are typically paid; the most common method used to provide salespeople with automobiles; and the five most common compensation methods for outside salespeople.
Referrals were reported as one of the top methods used to successfully fill open positions. Of the respondents utilizing referrals, 70% compensate the referring employee — on average between $500 and $1,000.
Industry Insights added that in an effort to keep up with inflationary pressures and to attract and retain employees, most respondents reported strong base salary adjustments (4%+) and are planning for additional increases for 2022 of 4% or more.
“Participating in the compensation surveys allows us to receive reliable benchmark information for comparing salaries and benefits in our industry based on company size, geographic location and comparison to our competitors,” said Mike Abeling, chairman of Fontana, California-based Consumers Pipe & Supply.
Rick Schweinberg, chief financial officer at Addison, Illinois-based Porter Pipe & Supply, added: “The compensation report assists us in benchmarking our pay structures throughout the organization vs. what is being paid in our marketplace. It is also used in hiring new employees and what type of pay range we need to be in to attract top talent. Great job by ASA.”
As Masters’ Supply’s Bell noted the report also gives detailed average compensation and benefits levels for positions such as president/CEO, COO, CMO, HR, IT, purchasing, director of sales, counter, warehouse, drivers, branch managers, outside sales, inside sales, showroom and more.
“At PHW, it is important for us to know that our compensation levels are competitive both regionally and nationally,” said Mike Plasier, CEO of Sioux Center, Iowa-based Plumbing & Heating Wholesale. “The ASA compensation report is one of the tools we leverage to gauge our place in the market. The report also provides some good insight into trends that are developing for attracting new employees and employee retention tools. We are thankful that ASA provides this service and will plan to continue to participate.”
To purchase the compensation and benefits report, click here.
If you need assistance with your MyASA log in, contact Jen Hatta at email@example.com.