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MANAGEMENT: Headhunters Weigh In On Hiring and Compensation
Industry companies attracting and retaining key industry players with more than just salary, recruiters say
By Christina Lewellen
June 2007
Some of the biggest window and door manufacturers have had a rough year. The downturn in the residential housing market has led to layoffs, pushes to streamline operations and slicing of employees’ work hours. But this is not why the headhunters who specialize in the residential fenestration industry are busier this year than ever. Recruiters are not scrambling to find work for displaced employees—they’re scrambling to fill positions for the up-and-coming window manufacturers that are growing successfully, despite the market conditions.
“We are unusually busy for the down market that people are talking about,” says Don Hall, founder of Don Hall & Associates, based in Waco, Texas. “We have more companies searching for candidates right now than we’ve had in our history. The economy is certainly down on the lower-income housing range—the track development—and that’s affecting a lot of manufacturers. But the middle- to upper-end market is still strong, and I think very strong.”
It’s also the replacement market that’s keeping the job market stable, adds Carlyn Burns, account executive for Management Recruiters of Lancaster County, Fort Mill, S.C. “I’m going to tell you something you may not be expecting, but as a recruiter, I’ve been busier than ever,” she says. “The replacement window side of things, versus new construction, is booming—skyrocketing even. It’s where the market is right now.”
Burns, who specializes in recruiting for both manufacturers and dealers and distributors, says small and mid-sized retailers, especially in the replacement side of the business, are seeking qualified candidates to keep their growing companies on the right track. Manufacturers—especially those who fall into the bottom categories of Window & Door’s Top 100 list and below, she notes—are looking for successful leaders for management roles and innovative thinkers for their design and engineering teams. “Companies are still trying to stay ahead of the competition and be innovative, so those are exactly the positions that are keeping me busy,” she says. “A lot of companies are going lean but the fact of the matter is that new product development is so critical to getting ahead. That’s why those positions are so hot right now.”
What’s not particularly hot right now is the market for sales positions, Burns says. Some companies are scaling back on their sales force while the market goes through its correction. Still, Hall says there’s always a need for specialized sales personnel, regardless of the pace of sales. “You can’t just be an ordinary salesman anymore,” he says. “You have to be a specialist in a certain product line. There seems to be an increasing level of specialization, in what the distributor carries and what the dealer stocks, and even what the manufacturer makes.”
For the most part, salaries and compensation packages in the industry are on the upward trend. Referring back to a compensation article he contributed to Window & Door in 2000, Norm McKibben, a senior partner with Aspen International Group Inc., says the past seven years and the construction boom that marked the period have had positive effects on base salaries and benefits. “You have to remember that in the period of time between 2000 and 2007, we went through a complete business cycle,” he notes. “Companies were making money hand-over-fist. They had to step up to get the good people, and that raises the whole salary and incentive level up two pegs.”
And when the market cooled, bonuses might have receded but salaries stayed put, he adds. “The downturn of this year and last year is only going to affect the bonuses because now their figures are way off,” he says. “In general, the salary levels are maintained at that same level, which is pretty high up because of the good times we just went through.”
SHOW ME THE MONEY
McKibben pointed out seven years ago that the consolidation and influx of investors in the industry meant that a growing number of top executives were getting in on a “piece of the action” with equity stake in a company. That hasn’t changed, he says, and may be an even more significant compensation consideration today. “The equity situation is still true,” he explains. “A larger group of managers have had exposure to equity primarily because investment groups like to feel that their managers are invested. They want them to feel more like owners rather than employees.”
Executives’ base salaries have increased from about $150,000 annually in 2000 to upwards of $250,000 (Table 1). What has changed even more dramatically, McKibben points out, is the structure of the bonus system. Company CEOs and presidents often have the carrot of a bonus dangled in front of them, but they can also earn “super bonuses” for exceeding the parameters of the baseline bonus. With the current downturn in the market, bonuses might not be too impressive this year, but the incentive will still be in place when business starts picking up, he notes. “This is not going to be a good year for the bonus side,” he says. “But [executives] can make a lot of money in the best of times.”
Plant managers and sales managers are also bringing home more money than they did in 2000, due in large part to the fact that the companies for which they work and their list of responsibilities continue to grow, McKibben says. Plant managers can make anywhere from $90,000 to $120,000 annually, and sales managers generally fall into the $80,000 to $110,000 range (Table 2). Like executives, these positions also have opportunities for bonuses on top of the baseline salary.
McKibben says one area that hasn’t seen much in the way of salary growth is marketing professionals working in the industry. Some of the bigger corporations have recognized the importance of having a strong marketing team, but the growing window and door companies are slow to get on board with investing in employees who can take their branding and Web presence to the next level, he observes. “The [leaders] in the entrepreneurial companies might be afraid of that high-tech communication and they don’t really put a lot of money into it,” he says. “It really hasn’t been pushed, but it is a growth area because the bigger corporations have it.”
McKibben says marketing professionals probably fall into the $80,000 to $100,000 salary range, which is about the same level as 2000.
Burns adds that marketing professionals are not often industry-specific. “Regardless of the down- or upswing of the industry, usually a marketing person can come from any industry, sort of like a financial person,” she says.
Another growth opportunity within the industry is among supervisors and managers of field or production crews, McKibben says. Companies are placing a premium on supervisors who are bilingual—communicating effectively with crews—and can keep the quality of workmanship consistent despite blue collar turnover. “Supervisors are getting paid handsomely to manage the crews,” he says, adding that managers can sometimes creep above the six-digit salary line.
QUALITY OF LIFE INCENTIVES
Salaries and titles are a “given”—people generally change jobs because they want to make more money and have more responsibility. But our panel of recruiters warns companies to not underestimate the importance of “quality of life” incentives when it comes to recruiting and retaining key industry employees. “I just placed a plant manager who left a big company to go to a smaller company,” Burns explains. “What sold him was not just the money but the whole package. I think smaller and mid-sized companies have the opportunity to cater the package to the individual.”
Burns cites as examples companies offering car and travel allowances, on-site daycare and health care services and even lunch break dry cleaning and car wash services. “It sounds silly but it really adds up,” she says. “You ultimately get that closer knit feel, that family environment.”
Four-day workweeks and flexible vacation packages are also a draw for busy executives trying to juggle work and home responsibilities, Hall adds.
For sales people, a category of employee that is still primarily money-driven, Burns says some companies have turned to sign-on bonuses as a way to draw in the top candidates. “Sales people are out there to earn money,” she says. “That sign-on bonus generally puts them over the edge.”
Regional considerations are also sometimes categorized as a perk, with some candidates seeking a position that will take them to a warmer climate or away from a high cost-of-living area. “There are certain parts of the country that are almost impossible to move somebody into because of the economics,” Hall explains. “If you move somebody from Texas to California, they might find it hard to pay the taxes or get an affordable mortgage. It’s easier the other way around.”
Despite the setbacks in the market, headhunters reiterate that it is a candidate-driven market right now and companies are moving quickly and aggressively to snag good employees when they become available. The companies that are the most successful are the ones that have something besides dollars to attract the attention of potential workers, Burns says. “I don’t think most companies realize that you’ve got to grab good candidates quickly,” she says. “The companies that move fast are at an advantage. The ones that are hiring actively know they have to have something above and beyond a good salary package to get them and keep them on board.”
THE NEXT GENERATION
Knowing that not many children aspire to enter the window and door business when they grow up, companies are putting more effort towards recruiting young workers into the industry, recruiters note. As the Baby Boomer generation moves toward retirement, a new generation of leaders will have to be primed to take over the increasingly complex fenestration businesses. “I think more companies are starting to see the value and power of hiring college kids,” Burns says. “A lot of my clients have a specific person who goes around the country and targets college career fairs.”
There are some challenges, however, in attracting young and/or non-industry workers. Just like seasoned employees, younger new hires don’t always come at a bargain to companies. According to a survey conducted by the Employee Relocation Council, organizations may find themselves competing for new hires in the areas of offers from other companies, cost-of-living and relocation expenses, and the general lack of qualified candidates.
The payoff, however, for fighting for fresh workers could be a stronger work force down the road, recruiters say. “I think you’ll see a lot more companies gearing toward the younger, just-out-of-college workers to build up a strong work force,” Burns notes. “The problem is that they’re going to have to woo them and give them a reason to stay loyal.”
Like many industry professionals who stumbled into their first window and door job and ended up making a career of it, Burns expects the same type of relationship-building will work with the incoming generation of employees as well. “The products may not be that sexy but it’s the company that can draw them initially,” she says. “Once they’re here, it’s the people that keep them here.”
