inexperienced chemists is running at 36.2% up from 30.6% last year. This rise in employment was accompanied by a sharp drop in the unemployment r a t e - 5 . 3 % to 2.8%. When the employment rate is broken down by degree level, it can be seen that the strongest gains were made at the B.S. level. For inexperienced B.S. chemists the employment rate rose
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J Fringe " | Benefits Review
from 15.5% in 1972 to 29.8% in 1973. It school decreased by 8% this year. The went from 42.7% to 45.9% at the M.S. percentage of Ph.D.'s accepting postlevel and from 42.1% to 49.3% for doctoral appointments also dropped by Ph.D.'s. Thus the increase in employ- 5% this year over last. About 17% of ment fairly well accounts for the de- the new chemists who are going to graduate school are choosing a field crease in the unemployment rate. This tendency of more college gradu- other than chemistry. Medicine draws ates to enter the job market is borne about half of this number. The second out by the fact that the percentage of most popular field is business adminisnew B.S. chemists going to graduate tration.
BENEFITS OUTGROW SALARIES
accidental-death and dismemberment insurance, vacations, holidays, thrift plans, profit-sharing plans, stock-purchase plans, educational-assistance programs, leaves of absence, severance pay, company-paid attendance at scientific meetings, and so forth. One of the newer employee benefits is company-supported dental insurance. In recent years, a few firms have begun to offer their employees personal automoPeople often speak of them as fringe bile insurance and also home insurance benefits. Experts in the field much .at reduced cost. Recognizing the importance of emprefer to call them employee benefits. The principal reason is that these ben- ployee benefits, the American Chemiefits, usually quite substantial, are far cal Society, as part of the Professional Enhancement Program (PEP), is curfrom fringy. According to the latest survey of the rently making a detailed survey of emU.S. Chamber of Commerce, the em- ployee benefits offered by companies ployee benefits of 533 American manu- that employ chemists and chemical enfacturers in 1971 averaged 30.6% ofgineers. Some of the findings of this aspayroll. On the basis of a much smaller yet-incomplete study will be described sampling of 39 companies in the chem- in this article. A more detailed reicals and allied products industry, the porting of that survey will be published employee benefits in this industry in in C&EN at a later date. Both the ACS survey and this article 1971 averaged 34.3% of payroll. In other words, the indirect mone- focus on employee benefits offered by tary rewards that an employee receives industry. In general, similar benefits in addition to his direct compensation are also provided by academic, governare considerable. Often, however, their mental, and other nonindustrial emsignificance is not adequately appre- ployers. In the past 25' to 30 years, employee ciated by professional employees. The value of a specific employee benefit benefits have come a long way. Accordmay loom large in the mind of a pro- ing to a study by Fred D. Lindsey, a fessional worker only when he is faced statistician at the U.S. Chamber of with major surgery that would force Commerce, the employee benefits ofhim to pay sizable hospital and surgi- fered to industrial (manufacturing) cal bills if it were not for his company's workers have increased from 13.1% of health insurance program, or when he payroll in 1947 to 23.6% in 1965 and to is approaching retirement and would 30.6% in 1971. Although all of the soon be plagued by serious financial Chamber of Commerce figures cited problems if it were not for his compa- here are based on studies primarily of nonexempt (hourly) workers, they reny's retirement plan. The types of employee benefits of- flect the similar trends among exempt fered these days are immensely varied employees, which include most chemand continually growing. In addition to ists and chemical engineers. While employee benefits as a perhealth insurance and retirement plans, these benefits include life insurance, centage of wages have been going up, sick leave, long-term disability plans, so have wages themselves. As a result,
Employee benefits offered to chemicals and allied products workers currently average more than 30% of payroll
16
C&EN Oct. 8, 1973
employee benefits have increased on a dollar basis much more dramatically than the above-quoted percentages would suggest. As Mr. Lindsey points out, annual employee benefits for industrial workers have risen from an average of $377 in 1947 to $1437 in 1965
Employee benefits push upward Average employee benefits as % of p a y r o l l a
40
1961
1971
Average employee benefit payments in $ per year per employee
a
3000
2000
1000
1951
1961
1971
a The average benefits of the 137 companies included in each of the three years' surveys are higher than those reported by the U.S. Chamber of Commerce in its survey of 533 manufacturers, because many of the 137 companies are rather large and they established many of their benefit programs earlier than other companies. Source: U.S. Chamber of Commerce
OLE: s are in demand* To do what? Some recent experiences:
B.S.Ch.E., University of Nebraska 7 3
B.S.Ch.E., Lehigh University 73
He picked the Kodak Research Laboratories. Why research? Answer: ' T h e challenge of studying the unknown/' Translation: "Science and engineering are different. In this spot I think I'll be able to go either way. Or both."
He picked industrial engineering. Why industrial engineering? Answer: "Gives me a chance to utilize my background working with people." Translation: "There is more to life than thermodynamics."
B.S.Ch.E., Worcester Polytechnic Institute 73 He picked product development. Why product development? Answer: "A good product which the cus tomer appreciates fulfills the Product De velopment Engineer's need for satisfaction in his work." Translation: "After two weeks of my Kodak career, the future looks good."
B.S.Ch.E., Oklahoma State University 7 2
She picked manufacturing staff. Why manufacturing staff? Answer: "Offers a chance to work closely with operations in the field of pollution control." Translation: "Those power plant stacks are now my stacks."
B.S.Ch.E., Carnegie-Mellon 72 He picked process development. Why process development? Answer: "Challenge and creativity." Translation: "Actually, I'm already spend ing half my time on product development. Keep loose and you do O.K."
B.S.Ch.E., Virginia Tech 73
He picked sales. Why sales? Answer: "Because it is a career of travel and change, and because sales utilizes an entire person. A sales representative uses not only his intellect but all his powers of communication and persuasion to further his career." Translation not required. Engineers who talk like that ought to be in sales.
Engineers are not hired for talent in vivid writ ing. If you'd like to be an engineer at Kodak, tell your Placement Office or notify Business and Technical Personnel, Eastman Kodak Company, Rochester, Ν. Υ. 14650. Most of the actual open ings are in Rochester, N.Y., or in Kingsport, Tenn., but not, by any means, all of them.
Kodak An equal-opportunity
employer
m/f
*So are other engineers. These are inter disciplinary times. But you have to show you have mastered the old basics, what ever else you've mastered. Otherwise you won't understand the language spoken here. Oct. 8, 1 9 7 3 C & E N
17
and to $2482 in 1971. He also points out that, whereas the annual earnings of industrial workers went up an average of 87% between 1955 and 1971, employee benefits in the same period increased by 210%— in other words, more than twice as fast. In the coming years, industrial employee benefits are expected to continue to grow. In some European countries, says Mr. Lindsey, they already average between 40 and 50% of payroll. He adds, "Obviously, employee benefits have been making phenomenal advances, particularly considering the fact that they amounted to only about 3% of payroll in the U.S. back in 1929." Why have employee benefits risen so strikingly in recent decades? One reason has been the growing security consciousness of U.S. workers and their intensified demand for programs that
ued to press for expanded employee benefits—with notable success. The gains they have won have helped not only their members but other company employees as well. In union negotiations with management, the expansion of employee benefits has been a particularly attractive target. Of course, if a union can win an increase in direct compensation, that is obviously advantageous to its members. Any wage increase, however, is reduced by federal and state personal income taxes. On the other hand, if a worker receives a greater employee benefit (for example, if the company agrees to pay 100% rather than 50% of the cost of health insurance for himself and his family), his direct compensation is not increased, and thus his taxes are also not increased. Another advantage of improved employee benefits is that they enable a
Chemical industry ranks high in employee benefits A v e r a g e emiployee b e n e f i t s as % of payroll in 1971
Manufacturing industrya
Chemicals and allied products Electrical machinery, equipment, and supplies Fabricated metal products, excluding machinery and transportation equipment Food, beverages, and tobacco Machinery, excluding electrical Petroleum Primary metals Printing and publishing Pulp, paper, lumber, and furniture Rubber, leather, and plastic products Stone, clay, and glass products Textile products and apparel Transportation equipment Miscellaneous manufacturing industries Manufacturers in all industries
34.3% 29.6 28.7 33.1 30.1 35.7 34.8 27.4 28.4 30.4 31.3 23.6 35.0 31.0 30.6
a The number of companies surveyed in each in u s t r y v a r i e s f r o m 12 t o 90. Source: U.S. C h a m ber of Commerce
will protect them against sudden financial hardships, such as large medical expenses, and will also provide other vital benefits. Also contributing to the growth in employee benefits has been the mounting recognition by companies that they have a social responsibility to ensure the economic well-being of their workers and to improve their general conditions of employment in other ways. Companies also recognize that employees who are not burdened by severe financial worries and other personal problems are better, more productive workers. In some cases, companies improve their benefit programs strictly for competitive reasons. Companies may also liberalize their programs because they are required to do so by law. Sometimes, firms are motivated to provide better programs because of significantly increased company profits. Highly important in this entire development has been the role of unions. In recent decades, unions have contin18
C&EN Oct. 8, 1973
company to make working for it more attractive in times of government-enforced wage freezes. When required by the Government to keep its direct compensation of employees constant, the company can still raise their indirect compensation (within government-set limits now, although not previously). For this reason, major upward surges in employee benefits occurred during the wage freezes of World War II and the Korean War. But, even without wartime wage controls, employee benefits have continued upward. According to the preliminary results of the recent ACS survey on industrial employee benefits, the total benefits provided to salaried employees, including chemists and chemical engineers, range today from an almost unbelievable low of 13% of salary reported by one company to a remarkable high of 49% reported by another. Most of the firms responding to the ACS questionnaire on employee benefits indicate that their benefits range from 20 to 40% of salary.
Clearly, the extent of employee benefits varies markedly from company to company. As one industrial spokesman emphasizes, however, the fact that one company spends 35% of its payroll on employee benefits whereas another company spends 32% of its payroll on such benefits does not necessarily mean that the latter company is less generous in its benefit programs. The real reason may be that the average employee in the latter firm is younger, healthier, and less likely to have accidents. Thus, his company is able to pay less per employee to insurance companies for its life insurance plan, pension plan, health insurance plan, disability plan, and so on—even though both companies may provide their employees with exactly the same benefit coverage. For this and other reasons, it is sometimes difficult to decide which of two companies that an applicant may be considering actually has the better overall employee-benefit package. What can greatly complicate the situation is the fact that one company may have generous life insurance and health insurance plans but may have a poor vacation policy and an inferior retirement program. In another company, the situation may be reversed. Conceivably, only an expert could decide which company has the better overall employee-benefit program. Some companies, on the other hand, are notably generous in almost all of their benefit practices, and these companies are unquestionably outstanding. Well worth stressing is the fact that certainly no company should be judged for suitability as an employer solely on the basis of its employee-benefit practices. Other considerations may be equally as important, if not more so. Among these are: • Direct compensation. • Nature of the work. • Location of employment. • Research and development facilities available. • Opportunities for advancement. • Compatibility with coworkers. • Growth potential and integrity of the company. Despite the enormous significance of these other factors, the extent of a company's employee benefits is still a major variable to be taken into account when evaluating a potential employer. For the job candidate, there is often the touchy question of deciding how much attention should properly be given during a job interview to the subject of employee benefits. Fifteen or 20 years ago, it was common for job counselors and industrial spokesmen to advise candidates to devote very little time during a job interview to discussing benefit programs. The reasoning was that, if the candidate gave more than fleeting attention to this subject, he was immediately judged to be hopelessly obsessed with job security, not sufficiently concerned about the
from A C T I N I U M to Z I R C O N I U M -or any way you figure it You should investigate a Sherwin-Williams career. The key reason is our diversification of technical activities. Chemical research and development, technical service and quality control are being conducted in our 45 laboratories located throughout the U.S. while engineering concepts of all types are being applied in 33 principal manufacturing facilities. You, as a member of our technical team, would have the oppor tunity to contribute to the development of our broad range
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of coatings, chemicals, containers and allied products. We provide you with the basics. Where you go from there depends mainly on you. Your first step - send us a resume. Joseph P. Cristiano, Manager Corporate Recruitment and Placement The Sherwin-Williams Company 101 Prospect Avenue Cleveland, Ohio 44115
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