by Luke Greiner and Mark Schultz
March 2015
Management positions provide economic opportunities that few occupations in Southwest Minnesota can match. At $36.05 the median hourly wage for management occupations is more than twice as high as the median wage for all occupations in the area and nearly $10 an hour more than architectural and engineering jobs, the next highest paying occupational category.
Why does the buck stop at the top? Managers play a crucial role in the businesses that employ them. They are typically responsible for the decision-making and resource coordination that enable organizations to accomplish their goals. The job of a manager is demanding, and not all workers have the robust skillset and personality to pull it off.
Melanie Wiegert, the Human Resources Manager for Schuneman Equipment Co., a family-owned agricultural equipment dealership with six stores in Minnesota and South Dakota, provided some insight into the job of a manager. She counted continuous learning, a willingness to handle tough conversations, empathy, setting effective priorities, and creative problem solving as the five most important skills for managers.
She also added that delegating is the most undervalued skill for new managers. "Managers, by definition, are no longer individual contributors. You are lessening your value to the organization when you don't share your knowledge and help everyone around you become better," according to Wiegert. This feeds into creative problem solving as well, since managers must learn how to involve others to set the best course of action based on available facts. While most management occupations require a bachelor's degree, Wiegert's list of important skills focuses on "soft skills" that are difficult to learn in a classroom. Instead, those skills are more often built through years of practice and experience.
The Manufacturing industry employs the largest number of managers in Southwest Minnesota, followed closely by Educational and Health Services. Manufacturing also has the highest median wage for management occupations in Southwest Minnesota at $41.54 per hour. That's more than five dollars an hour higher than the median wage across all industries, $36.05 (see Table 1).
| Table 1: Leading Industries for Management Employment | ||||
|---|---|---|---|---|
| Industry | Estimated Regional Employment 2014 | Median Hourly Wage 2014 | Share of Total Industry Employment in Management | Management Wages Relative to All Occupations |
| All Industries | 7,520 | $36.05 | 4.4% | 240% |
| Manufacturing | 1,660 | $41.54 | 4.2% | 248% |
| Educational and Health Services | 1,640 | $37.59 | 3.6% | 237% |
| Trade, Transportation, and Utilities | 1,290 | $31.59 | 3.7% | 245% |
| Professional and Business Services | 830 | $41.15 | 8.4% | 237% |
| Financial Activities | 800 | $38.96 | 8.3% | 237% |
| Public Administration | 690 | $28.11 | 4.9% | 149% |
| Construction | 250 | $34.69 | 4.4% | 193% |
| Leisure and Hospitality | 210 | $20.95 | 2.9% | 235% |
| Other Services | 120 | $29.44 | 3.0% | 243% |
| Natural Resources and Mining | 30 | $37.55 | 3.8% | 222% |
| Source: DEED, Occupational Employment Statistics (OES) program | ||||
While the Manufacturing industry employs the most managers in Southwest Minnesota, it is the Professional and Business Services industry that has the largest share of its jobs in management. Of all jobs in the Professional and Business Services industry, 8.4 percent are classified as management positions. Financial Activities also has a very high concentration of managers at 8.3 percent of total jobs.
This look at the distribution of management across different industries provides some insight into the opportunities that exist for aspiring managers still working their way up the career ladder. While the largest number of management career opportunities exists in Manufacturing from the sheer number of jobs, opportunities present themselves in less obvious ways in other industries. With a higher share of jobs in a specific industry - such as Professional and Business Services or Financial Activities - in management, employees may have increased chances of moving up into such a position if they are able to find work in the industry and prove their abilities to their employer.
Comparing management wages to the wages of all occupations in an industry sheds light on some nuances with wage relationships. When comparing median wages across all industries, managers earn about 2.4 times the median for all occupations. Remarkably, management's earning power relative to the wages of all occupations is fairly consistent throughout the major industries.
The highest wage premium for management positions can be found in the Manufacturing industry, where the median management wage is about 248 percent of the median of all jobs. The lowest premium is found in the Public Administration industry where managers have a median wage 149 percent of the median for all jobs, although it's also important to note that public administration occupations have the highest median wage ($18.91/hr) in Southwest Minnesota, which may contribute to the lower wage premium for the top paid employees.
DEED's Occupational Employment Statistics program details 30 different management occupations in Southwest Minnesota, showing just how vast and diverse the skills required in management can be. As seen in Table 2, general and operations managers account for over one-fourth of all management jobs in the region.
Not surprisingly, the highest paying management occupation is the Chief Executive with a median wage of $113,273 per year. The top 10 percent of chief executives earn a salary of more than $190,590. While this fantastic wage is far beyond what most employees take home, the CEO has a position of extreme importance to organizations, typically requiring the skillset of many different occupations combined. Southwest Minnesota is home to a higher share of chief executive jobs than the state, comprising 6.3 percent of all management jobs in the region compared to 5.5 percent statewide.
| Table 2: Distribution of Managers in Southwest Minnesota by Type | |||
|---|---|---|---|
| Manager Type | Estimated Regional Employment, 2014 | Percent of Total Management Jobs | Median Annual Wage, 2014 |
| All Managers in Southwest Minnesota | 7,520 | 100% | $74,992 |
| General and Operations Managers | 2,060 | 27.4% | $68,867 |
| Financial Managers | 610 | 8.1% | $85,948 |
| Chief Executives | 470 | 6.3% | $113,273 |
| Industrial Production Managers | 470 | 6.3% | $76,106 |
| Sales Managers | 460 | 6.1% | $77,743 |
| Managers, All Other | 400 | 5.3% | $75,338 |
| Medical and Health Services Managers | 290 | 3.9% | $76,713 |
| Administrative Services Managers | 260 | 3.5% | $79,236 |
| Computer and Information Systems Managers | 250 | 3.3% | $87,340 |
| Education Administrators, Elementary and Secondary School | 250 | 3.3% | $86,266 |
| Marketing Managers | 240 | 3.2% | $102,579 |
| Social and Community Service Managers | 190 | 2.5% | $57,733 |
| Human Resources Managers | 160 | 2.1% | $77,373 |
| Legislators | 150 | 2.0% | $17,954 |
| Engineering Managers | 130 | 1.7% | $100,552 |
| Food Service Managers | 130 | 1.7% | $42,112 |
| Construction Managers | 110 | 1.5% | $71,132 |
| Transportation, Storage, and Distribution Managers | 110 | 1.5% | $68,807 |
| Property, Real Estate, and Community Association Managers | 110 | 1.5% | $34,876 |
| Purchasing Managers | 90 | 1.2% | $75,065 |
| Postmasters and Mail Superintendents | 90 | 1.2% | $57,851 |
| Natural Sciences Managers | 50 | 0.7% | $99,682 |
| Education Administrators, All Other | 50 | 0.7% | $86,084 |
| Education Administrators, Preschool and Child Care Centers | 50 | 0.7% | $38,402 |
| Lodging Managers | 40 | 0.5% | $34,060 |
| Public Relations Managers | 30 | 0.4% | $100,460 |
| Advertising and Promotions Managers | 30 | 0.4% | $48,132 |
| Training and Development Managers | 20 | 0.3% | $95,970 |
| Compensation and Benefits Managers | 20 | 0.3% | $82,098 |
| Emergency Management Directors | 20 | 0.3% | $57,314 |
| Source: DEED, Occupational Employment Statistics (OES) program | |||
Because of the region's unique industry mix, some management occupations are in higher demand than others in Southwest Minnesota. Fourteen management specialties are currently in relatively high demand according to DEED's Occupations In Demand (OID) program.
Employees and jobseekers looking to climb the career ladder will find the most opportunity with the occupations listed in Table 3. Financial management is an especially viable option because the occupation is in high demand and more than 100 job openings are estimated for the next 10 years.
All but two of the listed management occupations in Southwest Minnesota require a four-year degree, showing that the best path to a management job starts with a college degree. However, it should be noted that most employees also will need relevant quality experience before being considered for a management position.
| Table 3. Management Occupations in Demand in Southwest Minnesota | |||||
|---|---|---|---|---|---|
| Job Title | Current Demand Ranking | 2012-2022 Projected Openings | Education Requirements | ||
| EDR 6W | EDR 8 | EDR9 | |||
| General and Operations Managers | ★★★★★ | ★ | ★★ | 540 | Bachelor's degree |
| Financial Managers | ★★★★★ | ★★★★★ | ★★★★★ | 120 | Bachelor's degree |
| Medical and Health Services Managers | ★★★ | ★★★★ | ★★★★ | 120 | Bachelor's degree |
| Sales Managers | ★★★★★ | ★★★★ | ★★★★ | 120 | Bachelor's degree |
| Industrial Production Managers | ★★ | ★★★★★ | ★★ | 70 | Bachelor's degree |
| Social and Community Service Managers | ★★ | ★★★ | ★★ | 60 | Bachelor's degree |
| Food Service Managers | ★★ | ★★ | ★ | 60 | High School or GED |
| Architectural and Engineering Managers | ★★★★★ | ★★ | ★★★ | 50 | Bachelor's degree |
| Administrative Services Managers | ★★★★ | ★★ | ★★★★ | 50 | Bachelor's degree |
| Marketing Managers | ★★★★ | ★★★ | ★★★★ | 40 | Bachelor's degree |
| Human Resources Managers | ★★★★ | ★★★★ | ★★★★★ | 20 | Bachelor's degree |
| Transportation, Storage and Distribution Managers | ★★★★ | ★★★ | ★★★ | 20 | High School or GED |
| Computer and Info. Systems Managers | ★★★ | ★★ | ★★★★ | 20 | Bachelor's degree |
| Purchasing Managers | ★★★ | ★★ | ★ | 10 | Bachelor's degree |
| Source: DEED, Occupations In Demand (OID) program | |||||
Data from DEED's most recent Job Vacancy Survey show what employers expect from jobseekers in management occupations. Three-fourths of the management vacancies require postsecondary education, including several specialties such as advertising, marketing, promotions, and public relations managers, sales managers, and medical and health services managers where 100 percent required a college degree. Perhaps more important, 81 percent of total management openings require at least one year of experience, including six specialties where all the vacancies demanded one or more years of related work experience.
In contrast, less than 10 percent of management vacancies are part-time, and none are temporary or seasonal. In comparison, nearly 40 percent of total job vacancies in the region are part-time, 42 percent require one year of experience, and just 30 percent require postsecondary education.
Because of the higher requirements, the median wage offer for management occupations was more than double the offer for all occupations, with starting wages ranging from $15.31 per hour for food service managers to $34.89 for industrial production managers (see Table 4).
| Table 4: Job Vacancies in Management Occupations - Southwest Minnesota | ||||||
|---|---|---|---|---|---|---|
| Occupation | Number of Job Vacancies | Percent Part-Time | Requiring Post-Secondary Education | Requiring 1+ Years Experience | Requiring Certificate or License | Median Wage Offer |
| Total, All Occupations | 6,429 | 38% | 30% | 42% | 45% | $12.58 |
| Management Occupations, All | 85 | 8% | 74% | 81% | 36% | $26.61 |
| Advertising, Marketing, Promotions and Public
Relations Managers |
8 | 14% | 100% | 100% | 0% | $31.53 |
| Sales Managers | 5 | 0% | 100% | 100% | 0% | $28.79 |
| Operations Specialties Managers | 40 | 0% | 58% | 60% | 3% | $30.80 |
| Computer and Information Systems Managers | 3 | n/a | n/a | n/a | n/a | n/a |
| Industrial Production Managers | 16 | 0% | 93% | 99% | 0% | $34.89 |
| Other Management Occupations | 37 | 14% | 84% | 100% | 79% | $22.66 |
| Food Service Managers | 14 | 0% | 68% | 100% | 68% | $15.31 |
| Medical and Health Services Managers | 6 | 0% | 100% | 100% | 100% | $31.19 |
| Source: DEED's Job Vacancy Survey (JVS) Data Tool | ||||||
In many career fields, including management, emphasis has been placed on high school graduates' and jobseekers' furthering their education with an Associate's or Bachelor's degree or higher. During the recent recession and even in the recovery many individuals have come into WorkForce Centers and taken advantage of the state's Dislocated Worker Program to attend a two or four year postsecondary institution.
While additional education and work experience are important, being the most productive worker is no guarantee a person will also be the most productive manager. The Peter Principle management theory states that employees are all too often promoted to their level of incompetence, based on performance in completely different jobs. Simply put, employees are rewarded for good work with promotions until they reach a position they are not capable of filling effectively. They then stop being promoted and are stuck in a job for which they are ill-suited for the remainder of their careers. This theory relates directly to management occupations because most managers are promoted to their positions only after years of experience outside management. Typically, new managers have entirely different responsibilities than they did in their previous positions, so determining who is a good fit for those positions isn't always as easy as one might think. It is up to employers to uncover those potential future managers on their staffs, and up to the future managers to demonstrate their worth.
