You only have to look at how the stock market has skyrocketed to know that most major corporations in the U.S. have had a very good year--several years for that matter. But how does the stock market and soaring corporate profits translate into jobs for engineers? And, of equal importance, what must an engineer do to prepare for the new millennium? Design News' exclusive annual Careers/Salary Survey posed these and other questions to our readers. Here's how they responded.
Once again, the survey reveals a relatively rosy scenario for design engineers in the OEM marketplace. Salaries, on average, continue to move slightly upward, and the job outlook remains sunny due to low unemployment rates and record sales.
However, as is the case with any sunny forecast, there's always a few dark clouds over the horizon. Mergers, downsizing, and strategic alliances among leading companies have resulted in welcome dividends for stockholders. But that doesn't necessarily re-sult in more job opportunities or pay raises for their employees. Moreover, financial successes in some industrial segments don't always carry over to others.
Payroll portfolio. Of primary interest to engineers, salaries continue their up-ward spiral. Our survey shows that the base salary of engineers averages $56,850. That's up $1,850 from last year, and $3,250 from the previous year.
Based on previous surveys, it's not too surprising that engineers in the defense and telecommunications fields pull down the biggest bucks on average. For example, 47% of the defense systems engineers who responded earn $70,000 or more a year, while 33% of the telecommunications engineers take home as much or more. Close be-hind are engineers in the aerospace (32%), medical (31%), and computer (28%) industries.
As might be expected, those engineers on the job the longest reap the most rewards. Of the engineers with 20 years or more of experience, 65% earn more than $60,000 a year. Just more than 51% of those who have worked as engineers from 16 to 20 years also fall into this lofty salary plateau, as do 49% of engineers who have been on the job for 11 to 15 years. In contrast, less than 1% of the engineers with five or less years on the job reported earning $60,000 or more.
Advanced degrees can add to an engineer's take-home pay, according to the survey. For instance, 50% of the engineers responding who hold Ph.D.s earn $70,000 or more a year. Those with a masters in business administration, however, have a slight edge (44% compared to 40%) over those with a masters in engineering when it comes to receiving more than $70,000 in pay. Only 21% of the engineers with a bachelors degree in engineering earn that much.
It also pays to work at larger companies. More than 32% of the respondents employed at companies with more than 1,000 people earn $70,000 a year or more. At companies with less than 1,000 employees, only 14% of the engineers on average can boast of a paycheck that size.
Where you work can mean more pay in your pocket, living expenses excluded. Once again, engineers who work in the Pacific region do the best, with 37% of the respondents earning $70,000 or more. This was followed by engineers who earn their keep in the Middle Atlantic region (29%), with those engineers in the South Atlantic and West South Central regions tying for third place (24%). Lowest on the list are engineers in the West North Central region, with only 6% earning $70,000 or more.
With a hot recruiting scene and a shortage of engineers, at least in some parts of the country or in some industries, how have engineers now on the job benefited? Here's what our readers told us.
Based on survey results, 78% of the respondents received a raise during the 1997 fiscal year. Of this number, half said the increase amounted to less than 5%, 4% less than last year. In the case of 19%, raises totaled anywhere from 5 to 7%, 9% reported a salary boost from 8 to 10%, and another 10% enjoyed a healthy increase in pay of more than 10%.
On the downside, 10% of the respondents re-ceived no increase in pay. Only 2% said they took home less money in their pay envelopes.
Personal profile. If you would like to know how your salary stacks up against your peers, check out a new service offered by the American Association of Engineering Societies (AAES). For $25 you fill out a form describing your background, your location, and the industry you are in. AAES sends back your "personal salary profile."
Washington Editor Walt Wingo asked AAES to do a sample profile for a non-supervisory engineer with a bachelors degree and five years experience in the auto industry. Results showed that the mean salary for such an engineer across the nation is $50,650. A tenth of the engineers make more than $56,850, a fourth make more than $53,950, and the median is $50,500. A second part of the profile gives the same type of breakdown for the geographical region or metropolitan area you work in. Results represent salaries of more than 120,000 engineers. Although current figures stem from a survey made in February 1997, AAES will start using figures from its latest survey beginning this month.
An electrical engineer may want to investigate a similar service provided by the Institute of Electrical and Electronics Engineers (IEEE). For $14.95 ($19.95 non-members), IEEE will help you compute comparative estimates of pay for thousands of different employment situations. Using what IEEE refers to as Salary Benchmarks: A Personal Workbook, the guide takes readers step-by-step through an easy-to-use formula to evaluate the user's "current compensation and determine salary expectations for prospective positions."
"Until now, the typical way to measure your salary against the broader labor market was to keep an ear cocked to office gossip or wheedle reluctant acquaintances working at other companies," says Ross Anderson, chair of IEEE-USA's Survey Committee. "Our workbook makes this same process fast, easy, and, most importantly, accurate."
Engineers no 'fly-by-nighters.' When it comes to "stick-to-it-ness," engineers are like glue. Our survey reveals that a majority (82%) of the respondents have been engineers 14 years or longer. In fact, 35% said they have practiced engineering for more than 20 years. Another 13% had from 16 to 20 years of engineering experience, 17% 11 to 15 years, and 17% six to 10 years.
This theme carries over to the length of time engineers have worked at their current job. The average respondent has plied his trade at a single company for more than six years. Breaking this down, 35% said they have logged more than 10 years at the shop they now work, while 20% have been employed at their present business from five to 10 years.
But do they expect to stay there? Here again, more than half report that they plan to remain at their present place of employment for the remainder of their career. Nearly as many (46%) anticipate they will seek out another company to work at sometime in the future.
Where do they work? Large companies are the norm, with 46% of the respondents working at companies that employ 1,000 or more. Another 18% work at firms with 500 to 1,000 employees, and 21% at businesses with 100 to 500 personnel. Only 16% are employed at companies with less than 100 people.
And their work styleis undergoing a drastic change. The Design News survey reveals that the life of an engineer is not an easy one. In fact, an independent study, conducted by the Simmons Market Research Bureau for Design News, found that engineers now work on an average of 18 design projects a year--up from 10.5 in 1989 and 15.2 in 1993. Their goal: to develop projects in half the time it took a decade ago.
How do they cope with these pressures? One way is to reorganize the design efforts into teams, say 44% of the survey respondents. Another 38% purchase software to help them get the job done more efficiently, while 34% say they have hired more engineers or outsourced design work to make the job go more swiftly.
Jobs, jobs, and more jobs. Unemployment rose slightly late last year to 4.7% based on Labor Department statistics, but it wasn't enough to spoil 1997's record as the best year for American job seekers since 1973--until now, that is. The latest government figures show that for the first quarter of 1998 unemployment fell to 4.3%, a level not seen since February 1970.
How does this relate to jobs? The Labor Department reports that U.S. businesses created 262,000 new jobs in April alone. But who benefits the most from this blistering job market? A study conducted by the Educational Testing Service (ETS) revealed that corporate downsizing has decimated middle-level management ranks. On the other hand, it also notes that hiring has outpaced layoffs. In spite of this good news, the report downplays the concept that America is starved for people highly skilled in technology. The real draw, it says, is an upper-level office job, not one that requires education in science and technology.
Accountants, insurance agents, and brokers qualify as office professionals, but not most engineers, scientists, architects, computer-system analysts and technicians, ETS explains. Unless they have shifted to the office environment, they are classified as production people.
Among prime-age workers, those 30 to 59 years old, the "new office sector" now accounts for 41% of all employment, up from 30% in 1959. In addition, business professionals and managers pocketed half of the earnings of all workers, excluding those earning more than $200,000 a year. Their pay was "47% more than the average earnings of workers in all the other sections," the study states.
Management montage. In spite of this reported need for business professionals and managers, the Design News survey shows that 58% of the respondents don't hold management positions within their companies. Of those who do serve in a management capacity, the number of people they supervise averages slightly more than four. Only 4% have 20 or more people under their charge, another 4% manage from 11 to 20 people, and 8% oversee from six to 10 employees.
"If you are a manager, what do you look for most in the engineers you hire?" the survey asks. More than 95% of the respondents who need engineers with more than five years experience wanted someone who could work as part of a team (51%). This person also should have some experience in project management (23%), as well as good presentation/communications skills (14%).
If the candidate is new to the job market, 35% of the manager respondents said they preferred someone with people skills. In addition, they would like to hire a person who has served an internship in a similar job (28%) and has specific CAD skills (19%).
Contrary to what the ETS report says about the future for high-tech jobs, another report issued by the Information Technology Association of America notes that corporate America is trying to fill a record 346,000 technology vacancies. That works out to about one opening for every 10 high-tech jobs.
The report sights the example of new computer science graduates with a four-year degree making, on average, more than $40,400 in their first year. But this June's graduates at Caltech, the prestigious private college in Pasadena, CA, can command much more. "Techers" know they are a step ahead of other students, the report adds, whether it's their stellar SAT scores or Caltech's recent ranking as the number one college value by Money magazine. This year, the school's annual job fair drew a record 90 firms.
The older the better. In its 1997 Product Development Benchmarking Study, Pittiglio Rabin Todd & McGrath, Weston, MA, an international management consulting firm that works with technology-based companies, revealed that companies with mature product development management practices have three times the revenue growth rate as others. These same companies, the study states, also maintain significant leads in other key measures of development effectiveness--time-to-market, development spending, marketplace renewal, and "pipeline" throughput per million dollars spent.
A total of 280 companies representing $40 billion in R&D spending participated in the study. Of the seven high-technology industry segments they represented, semiconductor manufacturers led the field with highest annualized revenue growth be-tween 1994 and 1997 of 25.2%. Telecommunications equipment rated next at 17.9%; automotive and medical devices/equipment tied at 12.8%; computers/electronic equipment followed at 10%, aerospace/defense at 9.5%, and chemicals/plastics at 6%.
"The study results show that industry leaders have moved on from the basics of managing individual development projects," explains PRTM Director Cindy Akiyama. "They are grappling with broader, more strategic issues, such as synchronizing their market, product, and technology investments to fuel growth. They are building the skill and resources base they'll need for competitiveness in the future, not just today."
R&D the key. Along the same line, the National Science Foundation reports that 1997 proved a very good year as corporations invested in the future in the form of increased R&D. In fact, NSF says that R&D funding rose an estimated 10% to $130.6 billion last year.
Not all of the so-called high-tech companies benefited equally as a result of the surging economy or their increased investments in R&D and new products. On the up side, as might be expected, is the semiconductor industry. Hoping to keep the industry on a roll, National Semiconductor Corp. recently announced a new chip that could drive personal-computer prices to less than $400, undercutting rival Intel Corp. in a market already roiled by sub-$1,000 machines. The chip combines a microprocessor with circuitry of more than a dozen added chips needed to make a PC, a leap in integration that could substantially reduce manufacturing costs.
Perennially a top employer of engineers in the Design News annual report on the Top 100 employers of engineers (see 12/15/97, p. 58), General Electric Co. is closing in on $100 billion in annual revenue. It credits this achievement as being driven by a massive quality program and growing investment in Asia, among other initiatives. If it happens, GE would experience a growth of more than 10% in sales this year.
Meanwhile, Motorola Inc. reported a 45% drop in first-quarter earnings, then surprised investors with a warning that the current quarter's results will fall far below previous expectations. Company officials blamed much of the deterioration on the currency crisis in Asia, but a larger problem stems from a loss of share in key markets to competitors such as Telefon L.M. Ericsson, Lucent Technologies Inc., and Northern Telecom Ltd. Motorola says it has plans to reconfigure its wireless businesses to better address both industry and consumers.
As these examples illustrate, the name of the game in corporate America appears to be "lean and mean, and meaner." When a best-in-class company that is already winning in the corporate marketplace takes a restructuring, "you're really putting on the afterburners, and it makes it very difficult for the other companies to catch up to them," explains Alex Henderson, director of technology research at Prudential Securities. "Just imagine what the stock of Microsoft would do if it took a big restructuring charge to downsize its overhead," he adds.
Master the millennium. So how will engineers cope with the added job stresses as we enter the new millennium? First, a majority of our reader respondents (61%) feel there will be a shortage of engineers in the future. What then will be the primary role of engineers as we enter a new century? Nearly 60% of the respondents see their task as being systems designers, while 24% predict that project management will be their major task. Only 13% foresee their role as being simply a parts designer, and a slim 3% say that marketing may be in their future.
In addition to working on more projects, what other major concerns will engineers face in the next 10 years? More than 50% of survey respondents report that cost will drive their design projects, while 33% reveal that manufacturability will be a top priority. Both environmental considerations and meeting international standards were listed as "most important" by 23% of the respondents.
Crystal balling the future. As the scenario between Daimler-Benz and Chrysler implies, the merger binge appears to be far from over. What such happenings might mean for engineering jobs one can only speculate. However, Compaq Computer's recent buy-out of Digital Equipment means a loss of an estimated 17,000 jobs at DEC, according to news sources. And even with the healthy economy, recently de-posed Sunbeam Corp. Chairman Al Dunlap has announced plans to eliminate 5,100 jobs to help the company bounce back from a dismal first quarter. Meanwhile, Airbus dealt another blow to Boeing by snatching an important Asian order to sell A340-500 long-range jetliners to Singapore Airlines, perhaps upsetting plans for Boeing to launch its competing model geared to meet the long-term growth of Asian commercial aviation.
Next year's career and salary report no doubt will tell the tale. In the meantime, the economy spins merrily along and unemployment continues at its lowest ebb in years. This portends more job opportunities for engineers.
Profile of an engineer
Blend the many responses provided by the 1,497 engineers who answered this year's Design News annual Careers/Salary Survey in a centrifuge, and the composite engineer that results might look something like this.
He or she has been an engineer for 10 years or more and worked for the same employer just as long. This "typical" engineer probably averages more than $56,000 take-home pay.
The "everyday" engineer also likes the job so much that it could be the place they retire from. Even having to work harder, faster, and longer does not deter this engineer. To keep up with the fast pace of today's booming economy and worldwide sales, this engineer must gain more computer skills and handle tasks that currently are not familiar to them. However, as inviting as it might sound, this engineer has little interest for working at home or for small firms on a contract basis. And, in spite of some attractive offers that may tempt this engineer to switch to another occupation, he or she will more than likely stay with engineering.
EDUCATION PAYS DIVIDENDS
Annual Base Pay
Total number/ More than
% responding $80K
$20 - $29.9K $30 - 39.9K $40 - 49.9K $50 -59.9K $60 - 69.9K $70 - 79.9K
Bachelors degree 854 8 89 177 226 171 92 86
in engineering 57% 17% 54% 61% 63% 60% 51% 56%
Masters degree 303 -- 9 33 67 70 60 62
in engineering 20% 5% 11% 19% 25% 34% 40%
Ph.D. in engineering 36 1 2 1 5 9 8 10
2% 2% 1% 1% 3% 4% 6%
Masters in business 104 1 3 9 19 26 13 33
administration 7% 2% 2% 3% 5% 9% 7% 21%
Bachelors in 99 4 11 21 26 17 12 6
non-engineering field 7% 9% 7% 7% 7% 6% 7% 4%
Advanced degree in 52 3 4 4 14 8 11 7
non-engineering field 3% 7% 2% 1% 4% 3% 6% 5%
Note: Totals are more than 100% due to multiple responses Source: Design News/Cahners Research
WHERE THE BIG BUCKS ARE
Annual Base Pay
Total number/ More than
% responding $20 - $29.9K $30 - 39.9K $40 - 49.9K $50 - 59.9K $60 - 69.9K $70 - 79.9K $80K
Aerospace 237 -- 12 32 57 59 45 32
16% 7% 11% 16% 21% 25% 21%
Automotive 156 3 27 33 27 34 19 9
11% 7% 16% 12% 8% 12% 11% 6%
Medical 95 2 7 13 20 23 12 17
6% 4% 4% 5% 6% 8% 7% 11%
Consumer products 90 3 15 23 28 13 4 4
6% 7% 9% 8% 8% 5% 2% 3%
Defense systems 80 2 3 8 14 15 16 22
5% 4% 2% 3% 4% 5% 9% 14%
Electronics 80 2 9 17 17 21 4 9
5% 4% 5% 6% 5% 8% 2% 6%
Industrial controls 65 6 7 11 14 10 8 9
4% 13% 4% 4% 4% 4% 4% 6%
Machine tools 57 1 10 11 13 14 7 1
4% 2% 6% 4% 4% 5% 4% 1%
Computer and 57 -- 4 9 18 10 10 6
business machines 4% 2% 3% 5% 4% 6% 4%
Instrumentation 52 2 4 10 17 9 6 4
4% 4% 2% 3% 5% 3% 3% 3%
Appliances 51 2 4 16 17 6 5 1
3% 4% 2% 6% 5% 2% 3% 1%
Construction 40 3 4 9 11 7 2 3
equipment 3% 7% 2% 3% 3% 3% 1% 2%
Telecommunications 39 -- 1 7 7 11 6 7
3% 1% 2% 2% 4% 3% 5%
Note: Totals are more than 100% due to multiple responses Source: Design News/Cahners Research
RATING THE REGIONS
Annual Base Pay
Total number/ More than
% responding $20 - $29.9K $30 - 39.9K $40 - 49.9K $50 - 59.9K $60 - 69.9K $70 - 79.9K $80K
New England 83 2 13 16 18 17 8 8
7% 5% 9% 7% 6% 7% 6% 7%
Middle Atlantic 140 3 17 24 27 26 23 18
12% 8% 12% 10% 9% 11% 18% 15%
South Atlantic 121 9 13 24 24 22 17 12
10% 23% 9% 10% 8% 10% 13% 10%
East North Central 370 13 55 76 103 64 29 25
31% 33% 38% 32% 36% 28% 23% 21%
East South Central 63 3 9 12 26 8 3 1
5% 8% 6% 5% 9% 3% 2% 1%
West North Central 122 4 13 34 26 25 11 8
10% 10% 9% 15% 9% 11% 9% 7%
West South Central 72 - 11 11 18 15 7 10
6% 8% 5% 6% 7% 5% 8%
Mountain 78 4 4 16 21 19 5 9
7% 10% 3% 7% 7% 8% 4% 8%
Pacific 140 1 8 21 24 33 25 27
12% 3% 6% 9% 8% 14% 20% 23%
Note: Totals are more than 100% due to multiple responses Source: Design News/Cahners Research
BIGGER FIRMS PAY BIGGER BUCKS
Annual Base Pay
Total number/ More than
% responding $20 - $29.9K $30 - 39.9K $40 - 49.9K $50 - 59.9K $60 - 69.9K $70 - 79.9K $80K
Less than 100 233 20 49 46 52 29 12 23
16% 43% 30% 16% 14% 10% 7% 15%
101-500 306 10 41 81 77 51 29 16
21% 22% 25% 28% 21% 18% 16% 10%
501-999 263 11 43 64 67 39 21 14
18% 24% 26% 22% 19% 14% 12% 9%
1,000 or more 689 5 32 99 164 164 117 101
46% 11% 19% 34% 46% 58% 65% 66%
Note: Totals are more than 100% due to multiple responses Source: Design News/Cahners Research
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