CHEMICAL & ENGINEERING
NEWS
FEBRUARY
7,
1966
Industry Paying More for Sales Trainees Recruiters offered new men 4% more last year than in 1964 Industrial recruiters and training directors are making a concentrated effort to sign up sales trainees, and the price is going up, the National Industrial Conference Board says in a survey released last week in New York City. Campus recruiters last year raised their bids for new salesmen by more than 4% over 1964. The median of the average hiring rates for industrial chemical sales forces in 1964 was $7300 a year—the highest among 16 industry groups surveyed by NICB. Education is important in determining starting salaries. But it doesn't necessarily govern earnings potential. Sales trainees in manufacturing industries vary considerably in academic attainment; the majority are not college graduates. NICB finds that a trainee uses several reference points to evaluate his starting salary. The absolute starting amount is important; if it is too low to meet his current needs he will look elsewhere. Other questions: • How does the rate he is offered compare on the basis of his educational level? • How much more can he earn when he joins the ranks of experienced salesmen? • What type of arrangement will he work under eventually—salary only, commission only, or a combination of salary, commission, and bonus? Because trainees use these reference points to evaluate their starting salaries, managers have shown increasing interest in the relationship between hiring rates and these other points. To study the relationship, NICB collected data on 1964 average hiring rates for sales trainees in 376 companies covering 16 industry groups.
Chemical Sales Trainees Draw Top Salaries
Product Group
Number of Sales Forces
Per Cent of Sales Forces Median Requiring 1964 Average Hiring Rate Technical Degree
Chemicals*
20
$7300
Machinery**
15
7000
40
Machine tools
24
7000
17
Electrical machinery!
16
7000
50
Fabricated metalsft
15
6600
40
Primary metals
28
6600
7
Paper
33
6500
0
Lumber
12
6300
0
Professional and scientific instruments
17
6200
18
Transportation eq uipment
13
6000
15
Variety consumer goods
16
6000
0
Petroleum
17
6000
8
Printing
12
6000
8
Textiles
17
6000
12
Apparel
19
5800
0
Food
18
5600
0
376
$6300
ALL SALES FORCES
50%
14%
* Excluding pharmaceuticals and paints and varnishes. ** Excluding electrical machinery, machine tools, and business machines. f Excluding household appliances. f t Excluding machinery, transportation equipment, hardware, and tools. Source: National Industrial Conference Board (1964 data).
FEB.
7, 196 6 C & E N
31
A recruit with a bachelor's degree in some scientific or technical area, says NICB, has the edge in starting salary. The median annual starting salary for such trainees in 1964 was $7200. This was 20% more than the rate for trainees who had not com pleted college, and 13% more than the rate for trainees with degrees in general business or the humanities. Average hiring rates vary consider ably among the major industry groups. The $7300 median average hiring rate for industrial chemical salesmen com pares with $5600 for the food sales force. The difference in starting sal aries may result from certain industry characteristics. For example, while 50% of the sales forces in the indus trial chemicals group require a techni cal degree, none of the food sales forces require one. The difference be tween their median average starting rates also reflects a basic difference in the type of selling activity involved. The sales engineer of the chemical company deals almost exclusively with other engineers and technical people, both within his own company and among his customers. The food sales trainee's customers, however, are re tailers and chain-store buyers. The difference between the starting rate and the earnings of experienced salesmen can be looked at from two angles. The trainee may view the dif ferential as a measure of his ultimate potential, and thus it may influence his decision on whether to accept the job. The salary administrator, how ever, may use his knowledge of the differentials to help estimate the ef fects of increasing his offers to pros pective trainees. NICB finds that the sales trainee generally is not paid under the same type of arrangement as the experi enced salesmen in his company. Most trainees are paid a straight salary during training. Training offered to recruits is not standardized either. Many trainees get formal training, but a large number work as apprentice salesmen. In some sales forces, train ees merely service accounts and have no assigned territory. Others work in the field, building sales volume until they gain enough experience to work a full territory. The median starting salary for train ees who ultimately will work on com mission is slightly less than for all trainees of comparable education. But their earnings potential is much greater than for salaried salesmen. 32
C&EN
FEB.
7,
1966
M. A. Wright
C. E. Ε. Reistle, Jr.
M. A. Wright will succeed Carl E. Reistle, Jr., as chairman of the board and chief executive officer of Humble Oil & Refining Co., Houston, Tex. Civil engineer Wright is now executive vice president and director of Standard Oil (N.J.). He will be elected to Humble's board of directors on May 18 and will assume his responsibilities as chairman of the board on June 1. Mr. Reistle, who has reached the company's mandatory retirement age, will retire June 1. Humble Oil is Jersey Standard's principal domestic affiliate.
Commerce Wants New Oil Import Data U.S. petrochemical producers may be asked shortly to try to project the im pact of feedstock import allowances on their balance of payments, prob ably through 1970. A proposed De partment of Commerce questionnaire would ask primary producers for spe cific projections based on the 1966 level of petrochemical feedstock im ports and on some hypothetical, and no doubt much higher, level which the producers feel will most improve the industry's already favorable balance of payments. "We need to have convincing docu mentation that a clear ratio can be shown between an increase in feed stock quotas for the petrochemical in dustry and a relative improvement in the balance of payments over the next three to five years," Deputy Assistant Secretary of Commerce for Resources Stanley Nehmer told the midwinter conference of the Chemical Buyers Group, National Association of Pur chasing Agents, in New York City. In confirming persistent rumors that such a questionnaire was in the works, Mr. Nehmer focused new attention on the struggle within the Administra tion over feedstock import quotas for petrochemical producers.
Over the protest of the petroleum industry, nonrefinery-based petro chemical producers were brought into the oil import control program for the first time this year (C&EN, Dec. 20, 1965, page 18). But nobody seems too happy with the program as it now stands. Nonrefiners complain that they still must buy nearly 90% of their petrochemical feedstock needs from U.S. oil refiners at nearly twice the world price (8 cents a gallon for naphtha domestically vs. about 4.5 cents ). Companies which both refine oil and produce petrochemicals gener ally opposed import quotas for their nonrefinery-based competitors and now are howling that they're being shortchanged to make room for chem ical companies. And domestic oil producers would like to see an end to imports of low-cost foreign crude. The Commerce Department favors higher import quotas for petrochemi cal producers in general. It fears that if U.S. producers cannot bring in lowcost naphtha, they will build new plants abroad, and the industry's fa vorable balance of trade (a remarka ble $600 million surplus of exports over imports in 1964) will deteriorate rapidly. On the other hand, the Inte-
