The housing market plays a crucial role in career moves. As it becomes more expensive to find affordable housing, employees are less likely to take on job changes or accept nominal raises. Companies are realizing the need to address this issue and its impact on talent retention.
In this episode of The Chemical Show, we delve into the fascinating intersection between the chemical industry employment and housing costs. Join host Victoria Meyer as she interviews Adam Krueger, Vice President of Sun Recruiting, who provides invaluable insights and analysis. Discover how changes in the housing market impact job mobility, compensation trends, and talent retention in the chemical industry. Uncover the challenges faced by professionals and gain actionable strategies to navigate these complex dynamics.
Join us to learn more about the following this week:
- “Weird” 4th Quarter job market in the chemical industry
- How is the housing market affecting the chemical industry job market
- Key trends in talent and recruiting in the chemical industry
- Expanding the chemical sector’s talent pool
- The cost of keeping employee verses replacing them
- Hybrid work critical driver in employee decisions
- The rise of Gen Z in the workforce
- Advice to chemical companies looking to fill roles
- Advice to candidates looking to land chemical company jobs
Victoria and Adam also discuss the challenge of attracting and retaining talent in a talent war due to the retirement of experienced professionals. Additionally, Adam highlights the importance of salary competitiveness, remote work opportunities, and the evolving social skills of Gen Z employees. Whether you’re a job seeker navigating the industry or an employer looking to adapt to changing trends, this episode offers valuable perspectives on the state of the chemical industry job market.
Salary Survey: https://www.sunrecruiting.com/report-results23/
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Watch the Interview with Adam Krueger on Youtube Here:
Listen to Victoria’s Conversation With Adam Krueger Here:
The Housing Industry’s Influence on Jobs in Chemical Sector with Adam Krueger of Sun Recruiting
Hi, this is Victoria Meyer. Welcome back to The Chemical Show. I am here with Adam Krueger, who is the VP of Sun Recruiting. Adam specializes in placing chemical engineers into chemical manufacturing companies. Their main focus with Sun Recruiting is professional engineering and operations roles at all levels. They’ve worked with companies large and small throughout the country. When not in the office, Adam is busy with his family of five, bass guitar lessons, which I do want to know a little bit more about, and running which I don’t really want to know more about. Adam and I actually originally recorded this episode several months ago. So we’re starting out with an update and then we’ll continue on with the rest of the interview. Adam, glad to have you here, welcome back to the Chemical Show.
Thanks, Victoria. Thanks for having me.
Absolutely. So let’s just jump in really quick. What I really want people to hear is, we’re sitting here in 4th quarter of 2023. So, what’s your assessment of the current job market, what’s happening and where it’s going as we head into 2024.
Sure. We just recently sent out an update that we normally send out every quarter, cluing people into what’s going on in the job market for the chemical industry specifically. To describe it in one word, it’s weird. What I mean by that is just, there’s so many different factors bearing down on the job market overall in the economy, but certainly the chemical industry is included in that. I think as it relates to the chemical industry specifically, the UAW strike that’s happening right now, that’s relatively new. It still is either already having an impact or is going to have an impact on the chemical industry because the automobile industry uses so many chemicals. I think there’s about $3,000 worth of chemistry in every car. So that’s going to have an effect.
You’ve obviously got all of the geopolitical things happening, which has really blown up in the last week. The last time we talked, it was just Ukraine and Russia. Now it’s the entire Middle East, which doesn’t necessarily have a direct impact on the chemical industry, but it’s uncertainty unrest. How does that affect supply chains? Are there raw material sources that are affected by what’s going on? Then I say, finally, the housing industry continues to have its effect in a variety of different ways. But I think when you look at housing start numbers, and I just checked in this morning, the numbers are still solid. There’s such low inventory, but if prices were to drop and suddenly there was more inventory, housing start numbers would go down. Again, that directly affects the chemical industry because of how much chemistry and materials goes into that industry.
I’m still getting calls from clients who need help finding people. So that’s positive. But then I flip on the news and I’m like, “Oh, you know, I don’t know how all of that is going to affect the job market.” So that’s why I feel it’s weird.
I just read this week in The Wall Street Journal, they said for MBA graduates, most of whom don’t come into the chemical industry, although I am one. But consulting and banking tend to be big on hiring enterprises or businesses that MBAs go into, and that a lot of them are slowing down their recruiting, delaying offers, and not making offers. So I think everybody’s in a bit of a watch and wait mode at the moment, especially as it relates to employment.
Yeah, I definitely agree with that. I’ve talked to companies and several sub sectors in the industry. Some are relatively stable year over year. Some are down 20 to 30 percent year over year. But keep in mind, last year for a lot of people was a great year, maybe their best year ever. So you’re down 20 percent from your best year ever. It’s probably more like it was pre-pandemic.
So I think that’s a reason we haven’t seen a whole lot of widespread layoffs, but if projections start to go down the next year over year, you might start seeing a few more of the bigger layoffs, like we’ve seen in 2015 or 2008.
Yeah, that’s helpful. So far you’re saying it’s solid but weird, to use your word, not knowing where it’s going. From the executives I’ve spoken to, I think everybody’s figuring out what the plan is for next year. Everybody’s obviously in their end of year close out and then planning for 2024. And there’s a lot of uncertainty on the horizon.
Now, let’s get into your origin story. What got you interested in chemicals and ultimately into recruiting?
I would say it was mostly by accident. I think that’s the story you’ll hear from almost every recruiter out there. I got out of school and it was a winding path in school. I started out as a cello performance major and pretty quickly realized that wasn’t for me and then switched to psychology. I found out that it was more of a side passion, but ended up graduating with that degree and coming out of school, not knowing really at all what I wanted to do with my life. I got a job with State Farm Insurance right out of school, and I didn’t like that, so one day I threw my resume out there on Monster, and I got a call from a guy named John Peterson, who said he recruited chemical engineers, and he needed a research assistant. I was like, “Anything’s better than what I have now. I’ll take it.” This was in late 2006, so I started with him and basically a year later, the economy fell apart.
2007 was John’s best year ever, then 2008 and 2009 were his worst two years ever. So, I basically hung on to my job, tried to make myself valuable, and by the time we were on the other side of that, I knew a lot about the business. John and I had gotten to know each other really well. We were a good team. At that point, we decided to start our own company, which happened in late 2011. I’ve been recruiting since then. So I would say this industry found me more than me finding this industry. But it’s been a wonderful experience.
On my part, I talked to a lot of other recruiters who are in other spaces and I can’t relate to some of their stories because by and large chemical engineers are very professional people, very bright, intelligent. That’s the type of people I get to work with every day. V!! That’s really cool. So tell us a little bit about Sun Recruiting. !! Sun Recruiting is, from a practical standpoint, it’s placing chemical engineering professionals. But I would say I realize that not everybody’s looking for a job all the time. So, I view myself as kind of a hub of resources within the industry and I’m looking to build relationships. A lot of times I’ll meet somebody, talk to them for that 1st time and then it’s another 1, 2, 5 years before anything comes together.
But I have that knowledge of what they would want to see from a job standpoint. Eventually, when that comes across my desk, I can make that connection. But we basically work any level role. So it could be entry level engineer at a plant, up to a VP or even a presidential president position at a manufacturing company, but it tends to be confined to that chemical manufacturing space. We’ve done some work outside of that, whether it’s a consultancy that touches manufacturing or an EPC type firm, but it tends to center around chemical processing.
Awesome. So let’s talk about what’s going on today in talent and recruiting. What are the key trends that you’re seeing?
I think for at least the last two years, it’s been an all out talent war. I think there’s a bunch of reasons for that. One of the biggest reasons in chemical engineering is just that for a couple of decades now, there’s been a lot more people retiring than coming out of school. So it’s slowly created that talent vacuum. That is mostly affecting the middle to senior level ranks. You will always have that availability of entry level engineers because they’re coming out of school looking for jobs, obviously. Getting those 5 to 25 year people to move and make a change when there are so many good options out there and so many good companies, that’s becoming more and more difficult and then you compound that with now we have high housing prices and high interest rates.
People are less mobile than they were even a year ago. A lot of the talent pools now are local, because to move somebody unless you have a really urgent reason, it’s just not going to happen. So I think those are probably the two biggest things that are contributing to a very low level candidate pool.
Your point about the cost of living and how certainly today when interest rates are 6+ percent if you’re looking to get a mortgage and I know rental rates are high. It’s a much harder case to sell your house and then buy in elsewhere, are companies compensating for that? Are they making adjustments to their recruitment packages and their hiring packages to accommodate the higher cost of living? Is that what you guys see?
It’s slowly happening, not as fast as I’d like to see it for sure. I think that’s going to become the talking point over the next year. Your relocation offering, if you want a larger candidate pool, is going to have to be substantially more because someone moving from an interest rate in the 2s or the 3s to something in the 6s or 7s. On an average house, that’s another 1000 dollars a month. So yeah, that alone is a huge cost plus just higher cost of living overall.
I think that’s going to become something that if companies haven’t already started to take a look at that, they will be forced to. It is most directly felt with what has been referred to over the years as kind of that passive candidate or the person who’s not really looking, but would make a change for something better. Whereas before it was not a big deal to make a move. When housing was relatively stable and your interest rate from one house to another wasn’t going to change, or maybe it was going to go down. That made it a lot easier to make that career move or maybe a title or a nominal raise.
I’ve got one anecdotal story of a company in the Midwest that’s offering a $50,000 loan to help with housing costs. Then over a 5 year period, that loan goes down, and if you stay with that company for 5 years, the loan is completely forgiven. That’s a long clawback clause and certainly not traditional, but I appreciate the creativity there. Recognizing that relocation is going to be a big deal, especially for a company that’s not near a city and doesn’t have a huge local talent pool. Where relocation is almost the only way you’re going to get somebody. It’s those companies that really have to get creative.
Yeah. It’s kind of an alternative to the traditional sign on bonus, and maybe it’s done in addition to a sign on bonus, who knows. If I was the candidate, I would like both. But it certainly provides a bit of that long term stability for both parties.
Right. That’s the only company I’ve heard of so far that’s doing something out of the norm.
Out of curiosity, is it a privately held or publicly held company?
It’s a privately held company. We’ve been seeing bigger lump sums and companies doing more on the sign on bonuses that they’re like, “Hey, maybe you should use some of that for relocation.” I think it’s going to take more creativity than that to really move the needle for some people, because again, we’re talking about a lot of money, it’s not just a few thousand dollars, it’s more expensive.
I think it’s a great story, and as you say we need to see more creativity in the markets and hopefully we will. Other than looking at local candidate pools, how do you expand the candidate pool? That’s always a challenge when there’s a limited number of candidates. There’s people obviously still interested in hiring despite some of the challenges we’re seeing across our economies. How do you expand that talent pool?
We’re always thinking about that. I think a lot of companies say they want somebody with that mid level range of experience, oftentimes they’re having to expand that to maybe, taking somebody with only a year or two. So being flexible on that end of things. A lot of times it comes down to compensation. Many of the people that I work with that end up getting offers, have multiple offers at the end of their search. So you have to be competitive. There’s so much salary compression going on. I think that companies have to look at their current workforce and what they’re paying them and look at trends to try to get information about what’s going on.
If there’s an adjustment that needs to be made there that’s not related to performance, it might have to happen. I did a poll back in January, and I had 700 people respond. My question was, have you gotten a non merit based compensation increase in the last 12 months? So something unrelated to your performance or company performance. About 30 percent of people that responded said they had gotten something like that. So that’s already starting and I think that more companies are going to have to look at that.
Right, and I think it’s a hard thing for a company. This has always been the case, but when salary inflation is occurring, let’s just say the employees that are staying at the company are getting squeezed on a comparative basis. So companies need to recognize that. If they’re willing to hire in somebody at salary X, they better be willing to adjust their own employees in an appropriate manner. Interesting, but it’s hard. That’s a hard one to do. As a corporate executive, those are hard cases and numbers to make.
I’ve thought about this quite a bit because I’ve done a lot of salary work in this industry, but how much does it cost to replace an employee versus paying your current employees a little bit more? I would think the cost of replacing somebody, with the knowledge and experience they have, knowing they’re a culture fit already. Versus bringing somebody in who’s an unknown quantity, having to train them, having to develop them, there’s a cost of that too. By not increasing and staying competitive with the industry, your chances of losing your own people grow and then that has a cost with it. That plays a role when I think about this issue and how to address it, especially if you’re a larger company that has a sizeable engineering force.
Yeah, absolutely. I’ve seen some data that says it’s effectively 6 months worth of salary to replace that person. Not necessarily just from recruiting costs, which is one thing, but it’s also the time loss and the training. So if it’s 6 to 12 months, you can afford to nudge your existing employees a little bit.
So Adam, we hear a lot about going back to work and hybrid working. Obviously hybrid working has been going on forever, but it became very popular during the pandemic. We hear about this driving a reluctance to work at specific companies. I’ve always assumed that employees in the chemical industry, particularly those that are working in manufacturing sites, understand that those roles are typically onsite and close to the assets. Needless to say though, is this aspect of being fully remote, being partially remote, and having hybrid options, is that a critical driver in employment decisions today with candidates you’re talking to?
It’s definitely the number one question I get. Do I have any remote work jobs? So I know people are thinking about it. I don’t know if it’s necessarily preventing a company from having that candidate pool they want, but I would say, in terms of motivators for certain people I will talk to them and we’ll go through everything. Then I’ll say, “Hey, tell me more about what kind of working conditions you want or schedule.” And they say, “The only change that I’ll make is for a remote position.” So they’re not otherwise looking unless that opportunity comes around.
Again, viewing myself as a resource, I always try to educate people. There’s not a lot of those jobs in chemical manufacturing. Certainly in the sales ranks, corporate ranks, and maybe even design type positions where it’s more desk work than actually being out in a plant. So, I steer people maybe to look at those types of roles> With the sales and corporate side, the trade off is that you’re typically going to be traveling a ton for that type of business. You might be able to work from home, but you’re going to be traveling 50-70 percent of the time. So I think the industry is getting more flexible, I see hybrid work certainly has increased 9/80 schedules. Basically an 80 hour work schedule compressed into nine days. So you get every other Friday off.
I think that’s gaining a lot of popularity.
Do you see that growing, the 9/80 schedules? I would have thought that was going to go away at some point.
It used to be that only gulf coast companies were doing that, but now I see it almost everywhere. I think the Northeast has been a little bit slow to catch on, but it’s pretty common here in the Midwest. I’ve seen a lot more companies do that. Knowing that there isn’t a whole lot you can do when working remotely, and companies doing that sort of thing shows flexibility, it shows willingness to work with people. There’s been an appreciation or at least a demand for that sort of thing among people who don’t have those options.
Yeah, when I worked for Shell we had 9/80 and it was a significant benefit having those extra Fridays. So when we think about this and we start tying into challenges and changes that the pandemic brought about, a recent article on Harvard Business Review, which I’ll link into the show notes, stated that organizations must address workforce wide erosion of social skills. It particularly pointed out Gen Z. So the most recent grad saying 51 percent of Gen Z employees state that their education has not prepared them to enter the workforce and that the pandemic means that these employees have had fewer in person opportunities to observe norms, determine what’s appropriate, and really just figure out how to really integrate into the organization and the culture. Does that resonate with you? Are you seeing and hearing this with your clients?
That is a very interesting question. Thinking about the conversations I’ve had, especially over the last 5 years or so as that generation has entered the workforce, I definitely think it’s real. I used to get calls from the parents of students who are graduating from university.
You really did? So you’ve experienced this helicopter parenting?
Several times, or even like aunts and uncles. I couldn’t believe it, but that’s died down some I would say I don’t get those calls very much anymore. But I’ve had other more senior level people saying, “I don’t understand this generation.” I think there’s an opportunity there actually, perhaps from a career coaching standpoint for people to step in and bring the generations together. At least help them understand each other. I think companies are doing a good job with mentorship programs, especially larger ones that have bigger work and bigger engineering forces. I think that sort of thing should probably continue to grow.
That could help with the different generations understanding each other. And then, I think a little bit of the onus is also on the Gen Z people themselves, if you are someone who struggles socially and you recognize that there are a lot of resources out there to help you, especially from that career coaching standpoint. We’ve made attempts to partner with several career coaches that are all listed on our website, and they all have different areas of specialty, but some of them help people map out their career. Like, where are you now? Where do you want to get to? What are the stepping stones that you would need to take to get there? Working with somebody like that can help with the developing your own social skill set, learning how to navigate the workforce, learning how to navigate conflict, that sort of thing. If you’re someone who identifies with struggling in that area, then I would definitely seek out those resources. They’re not very expensive and they could end up having a huge benefit for you.
I also think one of the things that strikes me is that Gen Z in many ways are digital natives, right? They grew up in a digital world. They’re used to connecting and communicating, but differently. So I sometimes think to say they don’t have the same social skills but I think generation to generation, they’ve never had the same social skills. There’s always been differences in evolutions. As the industry becomes more digital, it seems like it should create opportunity for people with different skills. I think it maybe will even ultimately encourage different skills, whether it be hard skills, or the soft skills and social skills that are required.
Yeah One of the trends we’ve seen, maybe you’ve seen this too, it’s just the use of big data and manufacturing and data analytics. I mean, those are two small sub categories of engineering that are very much on the cutting edge, and they’re starting to be degree programs at some of the universities that specifically are about data analytics, big data using that manufacturing settings. So that could be the marrying of the IT world with chemical manufacturing.
Are you starting to see more of that? More companies looking for really robust data analytics as it relates to manufacturing.
Yeah. It’s mostly with the very large companies right now, because they’re the ones that have the resources to pursue this. But a ChemE with a data analytics masters, that’s going to be valuable. Controls engineering is the hottest thing out there right now, and that’s going to be the next thing out there. In my opinion, it’s just somebody who can look at a chemical manufacturing process. Who’s also got that computer knowledge or the software knowledge that big data has, and then being able to bring those two things together. That’s where this industry is going to head. That’s my opinion.
I think that’s true. I go back to my time in manufacturing, and data analytics were important then. But at that time it was statistical process control. We were looking at DCS systems and the people that could understand the programming behind it and manipulate it were it was really beneficial, but we’ve grown leaps and bounds since then. In terms of, the technology and the data that the industry is applying to manufacturing into its sites.
Having people that have that skill set and continue to grow in that skill set I could see is really critical. So if you could give one piece of advice to chemical companies looking to fill open roles, what would it be?
I was thinking about this, if you’re a small company and you don’t hire engineers very often, I think there’s a lot of education probably that needs to happen. First, before you dive in, things have changed so quickly especially on the compensation front over the last year or 2. So knowing what a competitive salary is for a chemical engineer right now, versus 3 years ago is going to be a big deal. Just knowing the landscape overall, it’s difficult to hire a chemical engineer, especially if you’re in a location that’s less in demand. That’s going to be a longer process. If you do hire a lot of engineers, and you already have that knowledge of where the industry is at, it’s sort of going back to what we talked about earlier, being flexible on your relocation package. That’s going to be a big deal and an increasingly big deal because basically what’s happened now is all of your homeowners are stuck. So it’s more difficult to move and change.
Whereas a renter is probably much more flexible. But even on that side of things. Renting is much more expensive right now. So being able to help somebody from that side of things will increase the size of your candidate pool. Then being flexible from a work schedule standpoint, maybe that’s implementing a 9/80 schedule. I’ve talked to a few clients who are looking at that. Or offering your people some sort of hybrid schedule. Maybe they’re able to work from home one day a week when they’ve got a lot of computer work to do.
I think just offering little perks like that is a way to increase your talent pool, fill your job more quickly and just help people feel desired. We always talk about. In this market, people want to feel wanted, people always want to feel wanted, but especially when there’s a ton of people trying to get your attention. Like I said earlier, a lot of people are getting multiple offers. So make sure that you make people feel wanted, silence speaks volumes. Don’t let that speak for you.
That is really great advice. If you were going to flip this and turn it, if you could give one piece of advice to engineers and other individuals looking to secure a new role, what would it be?
I actually have two things. First one would be, periodically take time to reflect on where you are and where you want to go. I think a lot of people jump into a job search either out of dissatisfaction or boredom, there’s a lot of different reasons people do it, but sometimes those are the reasons. Then you’re wading into waters without a clear idea of where you want to go, what you want to do, what you want to achieve. So taking that time every couple of years to sit down and say, “Okay, what do I like? What have I liked so far? Do I want to do more of that? What do I want to grow in? How do I want to challenge myself?” That will help give you a clear picture of what that next step looks like. So when you do enter that job search, you’ve got a clear idea of what your objectives are.
I keep harping on the resources, but there’s so many resources available and they’re not just through me. I mean, the career coaching is, we don’t get anything out of those relationships. I just want people to be connected to other people to other people in this industry who can help. Two of those people are chemical engineers and civil engineers. They’re all engineers. They’ve all worked in this industry. So they know what they’re doing.
They can help you with their experience. Take advantage of mentors if your company offers a mentorship program, and even if they don’t, if there’s another senior engineer there it doesn’t have to be a formal program. Just say, “Hey, can we grab lunch? Can I pick your brain?” I’ve yet to meet a single experienced engineer that doesn’t want to do that sort of thing. I think even within the industry, there’s a lot of help out there for people who are younger, and who are coming up. Those would be my two biggest pieces of advice for people who are thinking about starting to look.
That’s really great. In fact, I know you shared with me one of the resources which was your salary survey. If you’re okay with it, I will connect that onto the show notes for this episode. So people have access to it.
Yeah, something I’ve been keeping up to date since 2015, updating it every couple of years, and it’s gotten a lot more advanced now because I’ve used technology, but it just updated it this week. It’s got almost 850 data points, so that’s a pretty robust resource, and there’s nothing else I’ve seen out there like it.
Perfect. We all like to benchmark ourselves and know what we should be targeting and where we’re going. Well, Adam, thank you so much. I really appreciate you joining me today on The Chemical Show. I appreciated the insights that you shared.
Thank you. I appreciate this opportunity and I’m always happy to be a resource in this industry.
Awesome, and if people want to get ahold of you or find out more information about Sun Recruiting, how can they do that?
We have a website, sunrecruiting.com that’s basically the hub of all of our things. We actually have an industry blog, it’s called The Centrifuge.
I’m not going to tell our blog too much, but we do have our career resources. A lot of the salary stuff I talked about is there. Obviously, I have a LinkedIn page. Anyone can contact me. I’m open to network. So those would be the two easiest ways to get ahold of me or us.
Great. Well, thank you for joining me today Adam, and thank you everyone for joining us and reading this episode of The Chemical Show. Keep reading, keep following and sharing, and we will talk to you again soon.
About Adam Krueger:
Adam Krueger has specialized in placing chemical engineers with chemical manufacturing companies since 2006. In 2011, Adam co-founded Sun Recruiting with John Peterson. Their main focus is professional engineering and operations roles, at all levels, and they have worked with companies large and small, throughout the country. When not in the office, Adam is busy with his family of 5, bass guitar lessons, and running. Since 2015, Adam has been publishing his own salary report for chemical engineers and his core mission is to be valuable to the industry, whether you are a client of his or not.