Chemical Processing Notebook: The Great Talent Tug-of-War

The following Q&A is an edited version of that conversation that delves into chemical-industry workforce recruitment, including the impact of economic conditions, evolving skill requirements, and changing candidate preferences.

You're on the front lines of recruiting for the chemical industry. What are the biggest challenges you're seeing right now in attracting new talent to this field?

Krueger: I think it's been the same for probably a year or so. And I think it's the absence of what used to be a passive candidate pool, and that mostly has to do with housing prices. A lot of people who are mid-career, they ended up buying a house along the way, so they have a mortgage rate in the twos or the threes. The financial mathematics of moving are not anywhere close to what they were even three years ago. In the past, someone might have entertained making a change that required a move because swapping one 3% mortgage for another 3% mortgage is not a big deal. Now, those people are not making a change unless there's been some life circumstance that's requiring it. I think that's one of the biggest challenges that the industry is facing: The mobility of talent is just not there.

And I imagine in the chemical industry, remote work is a little more challenging than some others?

Krueger: Yes. I see remote roles from time to time here and there, but nowhere near as common as they are in, say, the IT world or an industry where a lot of the jobs are office jobs. That's just not the case in this industry.

Are there specific skills or knowledge areas that seem to be lacking among entry-level candidates for the chemical industry?

Krueger: We don't work with a lot of people who are entry level, so it's hard to say whether there is. I think there's simply not enough candidates and chemical engineers graduating to meet the demand. I have some theories as to why. For one, I think the tech industry has realized that chemical engineers, by and large, are an ambitious group. You don't get a chemical-engineering degree by accident; that's for sure. So the IT industry has started taking engineering talent, especially at that entry level, and adapting that engineering skillset to their needs, whether that's Amazon, Meta, Tesla or SpaceX.

Another thing I've thought about is whether we’re doing a good job of attracting the right types of students to a chemical engineering degree because a lot of the conversations I have is with people looking for remote work, when 90% of the jobs are hands-on in a plant. Are we telling people the right things on the front end to make sure graduates have an accurate picture of what's available?

What are employers telling you in terms of their challenges finding qualified workers?

Krueger: Here's a scenario I've seen play out a number of times over the last two years: A company will come to us and say, “We want somebody with eight to 15 years of experience,” and the job stays open. Maybe we come up with a couple of people, but they're not a fit for their role. And then they ask us to find somebody with four to eight years of experience, and we'll turn on that for a while. So the problem is that there's such a dearth of talent in that mid-range that the talent war has now shifted to the junior-level or even entry-level ranks because there's not a big enough pool there. Retention-wise, I think the compensation landscape has changed quite a bit over the last several years, and I think that's led to some frustration on the part of at least some companies.

I think the bigger ones are staying on top of it, but if you're not regularly hiring, you're not getting that market feedback. In other words, if this is your first time looking for an engineer in two or three years and suddenly salaries are 25% or 30% more than it was before, that becomes a little bit of a shock. And maybe you also notice you're losing your people because you're not competitive. I think certain companies need to make adjustments to be more competitive.

What’s the average pay you’re saying right now?

Krueger: I think the year-over-year average for a while was a 2% or 3% increase every year. And then from 2020-22, even the early part of 2023, the pace was closer to 6% or 7%. So the difference between a process engineer with five years in 2024 versus that same level of experience five years ago is probably 20% to 25% more than it was then. When I first came into this business, it was rare to see a job at an individual contributor level that was over a $100,000. That was considered senior-level pay, but now entry-level salaries, especially for some of the majors out there like BASF and Dow, are paying their entry-level engineers $85k-$95k. In fact, most jobs are well over $100,000 for a base salary.

Well, it's interesting that pay is going up, but it doesn't seem like it's having much of an impact on getting new talent. What else can the industry do to make these jobs more attractive to prospective employees?

Krueger: The one area I've seen some innovation is on relocation, especially relocation assistance because that's where it ends up falling apart from a financial standpoint for most people: Is a 15% raise going to be enough to cover the $1,000 or $1,500 a month more you're going to be paying if you buy another house in a new area. And for most people, the answer is no. What I've seen some companies are offering essentially no-interest loans, but the loans themselves have this built-in claw-back clause that forgives the loan if you stay, for say, five years. I think that's one opportunity for companies to get creative or more creative.

To wrap up the interview, I asked Krueger if he had anything else to say about the outlook for talent acquisition in the chemical industry. He said while industry is struggling to find talent, the future is bright for chemical engineers. 

“It's hard to see a downside, if you like chemical engineering, to being in this field right now,” he said. That's for sure”