Lubricant industry hiring trends and 2022 growth forecast

Ken Pelczarski, Contributing Editor | TLT Career Coach January 2022

Survey results show there are great new challenges and uncertainties that lie ahead.

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Growth in the lubricant industry for 2022 is impossible to predict in this ever-changing, unprecedented and ongoing pandemic business environment.

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As we continue to deal with the COVID-19 pandemic, what will the lubricant industry job environment look like this year in 2022? What changes can we expect in the lubricant industry in 2022 versus what we have experienced in 2021? Growth in the lubricant industry for 2022 is impossible to predict in this ever-changing, unprecedented and ongoing pandemic business environment.

Opinions on trends and forecasts have been gathered from my survey of more than 600 lubricant industry professionals in September 2021 from which I received 55 completed responses. The survey provides a solid pulse on the industry in areas such as job trends, hiring forecasts, financial state of the industry and what we might expect in 2022. In this article, we will detail these trends and forecasts and examine the consensus among industry leaders.

I want to thank everyone who responded to this confidential survey. Responses will be the primary basis for this article as well as my TLT Career Coach columns for the March and May 2022 issues. Responses also were the basis for my PowerPoint presentation given on Nov. 8, 2021, at the STLE Lower Ohio River Valley Section, titled “State of the lubricant industry pandemic job environment” (please email me if you would like a copy of this presentation).

In my September 2021 survey, I asked 23 questions of which 22 were multiple choice. Some survey questions are the basis for subject matter in this article and will be examined further. I hope you find it interesting to see how your views align with survey respondents.

Survey respondents to the questions below are composed of key decision-makers (i.e., company owners and middle to upper-level managers) as well as sales, marketing or technical professionals with varying levels of decision-making authority. Survey questions, respondent comments and data analysis are covered below in each of three separate categories:

1. Hiring trends and forecast
2. Economy and growth forecast
3. 2022 versus 2021

HIRING TRENDS AND FORECAST
Did your company increase employee headcount during the second half of 2021?
4 of 54 (7%) said, “Significantly increased headcount.”
23 of 54 (43%) said, “Modestly increased headcount.”
23 of 54 (43%) said, “Maintained current headcount.”
4 of 54 (7%) said, “We have reduced headcount or are considering it.”

Respondent comments
• Due to lack of sales and needs of our customers, we are maintaining headcount as we expect the levels to return by year end. We are focused on retaining our drivers as they are one of the most difficult positions to replace at this time.
• I might wish to increase headcount, but the entire world has decided to play musical chairs, so we are really too busy trying to replace people leaving.
• Demand is causing the need for added personnel, so some positions are currently available. If demand continues, our needs also will increase.
• Yes, but we have a lot of business outside of metalworking also contributing to this.
• Hard to find workers due to unemployment benefits still being paid.
• We are investing in growth strategies and would regardless of the economy. We feel it’s the best path forward long term regardless of impact on short-term profitability.
• We did add two people during the pandemic.
• Yes, modestly, and we are trying to be positive on the future of our business and we’re hoping for a stellar year in 2022 that will require more employees.
• We are slightly increasing headcount, but on a very justified basis (where there were pre-existing openings), not necessarily net increase in headcount.

Data summary: 27 of 54 respondents (50%) stated that their employer either modestly or significantly increased employee headcount in the second half of 2021 while only 4 of 54 (7%) are reducing headcount or considering it. It is a robust job market right now with many opportunities and unfilled positions.

Do you expect your company to increase employee headcount in the first half of 2022?
1 of 53 (2%) said, “Expect to significantly increase headcount.”
21 of 53 (40%) said, “Expect to modestly increase headcount.”
28 of 53 (53%) said, “Expect to maintain current headcount.”
3 of 53 (5%) said, “May need to reduce headcount.”

Respondent comments
• No. Like many companies, the pandemic has taught us that we can work more efficiently. There is pressure to consolidate to cut costs.
• Yes, and we have open positions now that need to be filled. We are looking for the right candidate.
• Waiting on upper-level management to relay direction.
• If open positions are filled, may not need additions in early 2022.
• We’ll hire closer to the end of the first half of 2022.

Data summary: 22 of 53 respondents (42%) stated that their employer expects to either modestly or significantly increase employee headcount in the first half of 2022, while only 3 of 53 (5%) may need to reduce headcount. The lubricant industry job market for the first half of 2022 is forecast to be almost as strong as the second half of 2021. Pent-up demand appears to account for much of the current strong job market.

What types of positions were being added to headcount during the second half of 2021?
(Responses from 54 employers are listed below in order of number of times mentioned.)
None (24)
Sales (18)
Blenders and chemical operators (15)
Chemists and lab technicians (14)
Office/administrative (13)
Operations management (8)
Technical service (6)
Executives (5)
Environmental/health/safety (5)
Marketing (4)
Research scientists (4)
Engineers (3)
Human Resources (1)
Information technology (0)

Respondent comments
• Maintenance and warehouse staff.
• Hired general warehouse personnel.
• Also added operations/driver/warehouse resources.
• We are maintaining our levels of employment in all areas.
• Please add logistics manager/traffic manager.
• Plant general laborers.
• Other—production line.

Data summary: 24 of 54 respondents (44%) stated “None” because their employer did not add to headcount. Sales (33%), blenders and chemical operators (28%), chemists and lab technicians (26%) and office/administrative (24%) were popular positions also being added to headcount with mentions by between 24% and 33% of employers. Some employers mentioned that hourly manufacturing, warehouse and driver positions were being added to headcount even though they were not on the list of position choices. These results indicate there is a high demand for goods and that employers need employees to produce and sell them.

Has video interviewing become a regular practice at your company due to the COVID-19 pandemic?
11 of 46 (24%) said, “Yes, it is a critical part of our interview process.”
9 of 46 (20%) said, “Yes, it is a consistent part of our interview process.”
15 of 46 (32%) said, “Yes, it is done on occasion depending upon circumstances.”
11 of 46 (24%) said, “No, we believe that in-person interviews are much more effective.”

Data summary: 35 of 46 respondents (76%) stated that their employer includes video interviewing either on occasion or as a consistent or critical part of the interview process. This would seem to indicate that video interviewing is here to stay as employers have done this out of necessity due to the COVID-19 pandemic and have learned how to effectively fit this method into their hiring process.

Is your company open to hiring a job candidate through video interviewing only?
13 of 42 (31%) said, “Yes.”
29 of 42 (69%) said, “No.”

Respondent comments
• I think we always eventually bring a candidate in for in-person interviews.
• Depends on the position.
• We did it during the COVID-19 pandemic out of necessity. We strongly prefer to meet the individual in person.
• Indeed has worked better than ZipRecruiter. We always use two steps, first by video and then in-person interviews.
• We do videos for initial hiring. That weeds out the unqualified candidates. In-person interviews are definitely necessary for our business.
• We already have hired a few employees in this manner—successfully.

Data summary: A majority (69%) of employers stated they would not be open to hiring an employee strictly through video interviewing. A significant minority (31%), however, stated they would be open to doing so. This is a sign that many employers believe they have
mastered the video interviewing process and have already hired successfully in this manner.

ECONOMY AND GROWTH FORECAST
Has your company returned to pre-COVID-19 pandemic revenue and profitability levels?
21 of 50 (42%) said, “Exceeding pre-COVID-19 pandemic levels.”
17 of 50 (34%) said, “Returned to pre-COVID-19 pandemic levels.”
9 of 50 (18%) said, “Expect to be at pre-COVID-19 pandemic levels soon.”
3 of 50 (6%) said, “Do not expect to reach pre-COVID-19 pandemic levels in near future.”

Respondent comments
• We are operating at 85% pre-COVID-19 pandemic level and expect to return to 100% by year end in 2021.
• Manufacturing surge to fill need for products is pushing a strong recovery for us. Our increase may be limited by raw material supply issues and logistics.
• There are a number of different factors outside of the COVID-19 pandemic contributing to this, but we are about where we were 2019.
• Yes, but I believe a lot of it is pre-buying due to shortages.
• We grew by 6% in 2020 and are 29% year to date.
• I can’t disclose company financial information.
• Our corporate ownership is in the European Union (EU). With no travel to the U.S. from the EU allowed until after Nov. 1, 2021, we had issues doing business as usual.
• Because of the unpredictability of prices in the commodity markets, we have to quote the prices for our finished goods on a weekly or daily basis.
• We added additional products during the COVID-19 pandemic, some planned and some in response to demand (e.g., hand sanitizer), allowing us to exceed prior levels.

Data summary: 21 of 50 respondents (42%) stated their employer is exceeding pre-COVID-19 pandemic revenue and profitability levels, and 17 of 50 (34%) stated their employer has returned to pre-COVID-19 pandemic levels. Only 24% of employers have not reached pre-COVID-19 pandemic levels yet. It is encouraging that the vast majority of lubricant industry employers are profitable and are able to invest in resources for further growth.

In your opinion, has the financial state of the lubricant industry returned to pre-COVID-19 pandemic levels?
20 of 53 (38%) said, “Yes.”
33 of 53 (62%) said, “No.”

Respondent comments
• The industry is reeling from the COVID-19 pandemic and the current political administration’s energy policies.
• Price increases (quantity and high percent of increases) since the beginning of 2021 have put constraints on margins and on the success and survival rates of our customers.
• Some sectors have but aviation has not.
• Raw material allocation and price increases are limiting manufacture of finished goods and reducing profit margins.
• Automotive still behind due to shortage of microchips.
• Products costs are out of control.
• We are experiencing supply issues that were caused by the decrease in manufacturing due to the early days of the pandemic.
• The demand level, yes. Rising prices and raw material shortages are another story.
• The restriction and bottleneck are supply and human resources.
• My sales for the companies I represent are at pre-COVID-19 pandemic levels or above, but supply issues remain a concern.
• Maybe. It is really difficult to gauge this because of all of the supply chain disruptions. Are companies purchasing because they can get something or because they need it as a regularly scheduled item? Really hard to sort out.
• Lube plant investment, particularly among the ILMA group, is better.
• For some yes, but overall raw material delays/shortages and logistic issues have hampered a full recovery.
• Continued disruptions in the supply chain for raw materials, containers and transportation continue to hinder the industry.
• When the prices come down or stabilize, we’ll feel better about the lubricant industry.
• Limits on availability of some feedstocks has increased costs and lowered margins for many.
• It will be one year for full recovery. Material prices are up and so are price increases. Hence, there may be sales dollars (revenue) growth but not as much of a volume growth.

Data summary: Most respondents (33 of 53, 62%) said the lubricant industry financial state has not returned to pre-COVID-19 pandemic levels. Looking at the previous survey question, it appears that employers are more positive about their own financial condition than they are about the financial shape of the industry as a whole. From the comments above, the consensus seems to be that the lubricant industry could be much more profitable if there were not major issues with raw material cost, delivery and availability.

In your opinion, is the lubricant industry in better financial shape than most other industries as the pandemic continues?
2 of 51 (4%) said, “Yes, much better than most.”
15 of 51 (29%) said, “Yes, a little better than most.”
29 of 51 (57%) said, “About the same as most.”
5 of 51 (10%) said, “No, worse than most.”

Respondent comments
• The short-term gains are strong as demand is high, but limited supply is causing increased prices, and these can be expected to be pushed to the consumer markets soon.
• A very broad question, compared to the hospitality industry, yes, but not as good as other commodities.
• They seem to be similar to other process industries (chemicals, paint and coatings, janitorial and home care, etc.).
• Finding qualified help is still an issue and will be post pandemic.
• Force majeure is causing issues as we cannot get the materials needed to manufacture our products. Cost will be rising.
• Material supplies are plaguing the industry.

Data summary: The responses here are largely what I expected as 29 of 51 respondents (57%) said the lubricant industry is in about the same financial shape as most other industries. I was a little surprised at the optimism, however, that a significant number of employers (15 of 51, 29%) believe the lubricant industry is doing better financially than most other industries.

How optimistic are you about the economy continuing to improve in 2022?
6 of 54 (11%) said, “Greatly optimistic.”
22 of 54 (41%) said, “Somewhat optimistic.”
19 of 54 (35%) said, “Not sure but hopeful.”
7 of 54 (13%) said, “Not optimistic.”

Respondent comments
• There are still lots of (obvious) variables, including the Delta variant and supply chain (including shipping) limitations.
• People are satisfying their pent-up demand. With chip shortage, the demand continues despite gas prices.
• Delta variant is a problem for the COVID-19 pandemic.
• Issues with inflation having an impact on family budgets and government debt issues.
• To be fair, I believe the foreseeable future will really all be about managing RM allocations and staying ahead of inflation. There seems to be little “new” business being conducted due to all efforts in keeping in production of what we already make. I think 2022 will be acceptable but mostly because there is pent-up demand not being met in 2021. This makes for steady business but not really growth; just steady and definable.
• Inflation is a concern, but I am hopeful.
• My optimism could change due to uncertainty in national and regional politics.
• I am a glass full person, but I don’t see how this can be sustained beyond the 4th quarter of 2022.
• I’m always optimistic. We’ll see little or no increase in tonnage but an increase in value as higher-performing synthetics grow in share.
• Supply chain will not recover in 2022 and with the pandemic still lingering, it will take much longer.
• Current government grumblings to raise corporate taxes and inflationary fears from excessive spending could cool things off.
• I wish I had a crystal ball that could predict the future. 

Data summary: Optimism is displayed here once again as 47 of 54 respondents (87%) are either hopeful, somewhat optimistic or greatly optimistic about the economy continuing to improve in 2022. This should result in companies investing in new hires and other resources for business growth. Several employers, however, mentioned inflation and supply chain issues as possible impediments to economic growth.



2022 VERSUS 2021
I asked the following closing question in my September 2021 survey. Respondents were invited to make final comments, which are listed in five separate categories below.

Do you have any final thoughts on how the lubricant industry job environment will be different in 2022 versus the second half of 2021?
Supply chain and transportation issues
• I do not see much change as long as supply uncertainty and the COVID-19 pandemic remain a part of the business environment.
• COVID-19 variants and chip shortages are the issue. Gas shortages may rear its ugly head.
• Expect it to be better as the transportation industry (i.e., aviation, freight) returns to pre-COVID-19 pandemic levels.
• In light of the trucking driver crisis, I see the movement of packaging taking place in regional hubs as seen in the 1980s and 1990s making deliveries in a fixed distance pattern with more warehousing taking place.
• Will depend on if supply issues continue or if supply catches up to demand and competition develops to gain more business. Freight and logistics issues will remain. May force many to rethink just-in-time (JIT) inventories.
• Our increase may be limited by raw material supply issues and logistics.
• Raw material delays/shortages and logistics issues have hampered a full recovery.
• At some point the supply issues will improve. Whether pricing will follow is another story. Still seeing transportation and availability of carriers as an issue.
• It is difficult to predict because it is unknown when many of the existing supply chain issues will be solved.
• The foreseeable future will be about managing raw material allocations and staying ahead of inflation.
• It is all about access and availability of product.
• We have not seen this type of price volatility in oils, totes, drums and pallets since the 1970s.

Economy and growth forecasts
• 2022 should follow 2021 unless there is a significant downturn in the economy.
• Manufacturing surge to fill need for products is pushing a strong recovery for us.
• The current surge will not last, and the industry will continue to see declining sales volume. There is potential growth in product areas related to biobased/synthetic/sustainable chemistry.
• Increased use of biofuels and continued move to electric vehicles requiring new and different lubricants.
• We believe there is pent-up demand if the current administration does not throw a wet blanket on it.
• In the U.S., we expect government to impact the market recovery—from taxes to environmental issues it will impact the petroleum industry. This could be helped or further softened as the EU has not enjoyed the growth the U.S. has seen. Continued weakness in the EU could slow any U.S. growth.
• I expect lubricant industry job environment will be better since fuel efficiency would be emphasized in every industry.

Recruiting and retaining employees
• Hopefully we will be able to fill the vacant positions we have and retain current employees. We have had a difficult time getting people to show up for in-plant interviews after the initial video chat/phone calls.
• Companies should pay attention to competitive job offers and provide incentives for seasoned employees to stay and to grow within organizations.
• The lubricant industry job environment is on a roller coaster ride now. It will become more difficult to attract talent into a declining industry that is petroleum based.
• There is more opportunity for employees to change companies.
• Unfortunately, our company has not kept pace with increased salary or compensation package (such as work from home). Because of this, we expect more people to leave and to
have a difficult time finding suitable replacements.
• I think there will be a lot of personnel movement because of a shortage of good workers.
• An awful lot of knowledge and relationships are leaving the industry. Where retirement was a constant trickle, an awful lot of people are just done all at once. I see both that older people have more and less to offer but are being gobbled up because they are known quantities who will work.
• It is hard to hire people when they are being paid to stay home.
• It’s more important for us to hire younger, tech-savvy, quick learning entrepreneurs than more experienced, less tech-savvy employees. Also, our industry is far too homogenous. We need much greater diversity, which is what we’re striving for in our company.
• I doubt if there will be much difference. Ever since the government paid people to sit at home, we have had problems hiring enough people to effectively handle our increased volume.
• I believe the number of job openings needs to increase in order to address an expected increase in labor shortages (via the COVID-19 pandemic or otherwise) and worldwide materials shortages.
• Companies should always be open to onboarding good talent. Better people will usually benefit the company no matter the business conditions.

Remote and hybrid work trends
• With the home office being more common, I see more managers expecting workers to be available outside of regular business hours. I have experienced many more days of extended work hours than I did when working from office.
• Other than flexible work schedule versus 100% attendance at work daily, I don’t see much change. Employees being hired may, however, choose employers that meet their schedule needs (i.e., work for an employer that permits mostly or 100% work from home versus one that doesn’t, one that does not require you to relocate may be preferred). Some jobs such as manufacturing, R&D and QC will continue mandatory presence at main work location.
• Work will be more flexible, more virtual and more efficient. Hybrid is a better model than traditional. It’s better to embrace it than to fight it.
• There is a push to continue with hybrid work, especially since we “made it work” during the pandemic. People who worked from home reported more productivity. However, the overall business suffered because people were not onsite to collaborate with. Small businesses function best when people of all job descriptions are on site.

COVID-19 pandemic comments
• There is a considerable amount of flux currently due to catastrophes and general upheaval due to the COVID-19 pandemic.
• That is difficult to say, based on the new variants of COVID-19. My guess would be more relaxed, once everyone or a much greater number of people get vaccinated. It is encouraging to see so many lubricant industry employers doing so well financially now compared to about 18 months ago. My survey in July 2020 indicated that about 70% of lubricant industry employers were being significantly impacted financially by the COVID-19 pandemic. There are many good signs in today’s economy, but there also are tremendous challenges.

Positives in the economy 
• Private sector job growth averaging over 500,000 monthly gains from January through October 2021
• Wage growth between 4% and 5%
• Unemployment under 5%
• GDP growth of nearly 6%.

Challenges in the economy
• Supply chain
• Raw material cost, delivery and availability
• Oil prices
• Inflation exceeding 6%
• Talent shortage
• Recruiting and retaining employees
• Adapting to remote and hybrid work trends
• Ongoing pandemic. 

Employers, for the most part, have adapted to the pandemic work environment. As expressed emphatically in my September 2021 survey responses, though, there are great new challenges and uncertainties that lie ahead.

My hope is that lubricant industry employers will avoid a roller coaster ride in 2022 and achieve a year of steady job growth and profitability. It will then follow that individual employees will prosper and enjoy greater job satisfaction.
Ken Pelczarski is owner and founder of Pelichem Associates, a Chicago-based search firm established in 1985 and specializing in the lubricants industry. You can reach Ken at (630) 960-1940 or at pelichem@aol.com.