The Wages of Design

Again, compensation methods varied widely, with 29% of respondents paid a straight salary, 15 percent paid a salary plus commission, 9% paid an hourly salary, 8% paid commission only and 3% paid hourly plus commission. Another 26% were owners who take money from their business as needed, and the rest were paid by some other method, including various combinations of salary and bonuses.

Nearly 35% of those at design-only firms received a holiday or year-end bonus last year, with the average amount $1,662. Sixteen percent received a performance bonus during the year, averaging $8,544.

When it comes to pay increases, the vast majority (nearly 65%) said they did not receive a raise in 2007. However, those who did receive an increase averaged 5.5%, which is above the national average.

For those who did not get a raise last year, 49% had received a raise during 2006, 22% had received one in 2005, 8% last received one in 2004, 3% in 2003, and 18% had not received a raise since 2002 or before.

As for benefits, employees at design-only firms fared slightly worse than their dealer or distributor counterparts (see Graph 7), though the majority still received medical coverage (74.6%) and dental coverage (51.8%) as part of their compensation package. However, fewer than half had a 401k plan (44.2%), a prescription drug plan (40.6%) or a vision plan (32.7%).

Nearly one in three respondents got no paid sick days in 2007, and 29% received no paid holidays. However, the majority of survey respondents did enjoy flexible hours, with a whopping 66% of owners saying their employees were offered flextime arrangements, while 26% said they offer their employees family leave.

Part of the freedom of being a design-only firm is having the opportunity to work with different showrooms to enjoy maximum product exposure, and the vast majority of design-only firms took advantage of this. Indeed, some 70% reported taking clients to visit other companies’ showrooms in 2007, and those polled visited an average of 4.2 different showrooms over the year. A mere 12% of respondents went to only one showroom.

Distributor Compensation

The survey also polled some 450 owners, managers and employees at U.S. and Canadian distributorships, looking at salaries, benefits, commission structures and more.

The majority of those surveyed worked at companies that distribute cabinets (86%), countertops or blanks (72%), hardware (61%) and plumbing products (53%), while roughly one-third distributed lighting products (31%) and appliances (29%). Ninety-four percent said their firm had a showroom, while 75 percent said their firms sold retail as well as wholesale.

One of the notable results of the survey was the significant difference in pay between those working at Canadian distributorships vs. those employed by distributorships based in the U.S. Indeed, Canadian employees average $63,000 per year compared to their U.S. counterparts, whose annual salary averaged only $51,529, while owners of Canadian distributorships earned an average annual salary of $141,928, compared to $121,769 in the U.S.

Likewise, managers at Canadian distributors fared better than their U.S. counterparts, earning an average salary of $87,500 per year, compared to $66,363 in the U.S.

Even within the U.S., regional salary differences were significant. Among owners, average annual salaries ranged from a high of $141,928 in the West to a low of $91,936 in the Midwest, while owners in the Northeast averaged $131,796 annually and those located in the South averaged $118,274 per year. Significant salary variations were also evident, even within specific regions (see Graph 9)

Annual salaries for managers in the U.S. ranged from $73,437 in the Northeast down to $54,166 in the Midwest, while average employee salaries were highest in the Northeast ($68,461) and lowest in the Midwest ($42,868). Both manager and employee salary ranges were fairly constant, with only a small percentage deviating markedly from the average (see Graphs 10 and 11).

The survey also showed a wide diversity of compensation packages being offered by distributorships, with more than one-third (34%) of respondents paid a combination of salary plus commission, and another 32% paid straight salary. Some 10 percent were paid an hourly rate; 8% were owners who took money from the business as they needed it; 7% were paid commission only; just under 7% were paid hourly plus commission, and the remaining 3% were paid commission plus draw.