Engineers on a wild ride

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As we wrapped up last year's exclusive Design News Careers/Salary Survey, the scenario went something like this: Many corporate sales reached new heights, the stock market was surging to record levels, the economy moved steadily upward, and downsizing appeared to have been held pretty much in check.

Engineering salaries averaged $55,000 annually in this year's Design News exclusive Careers/Salary Survey, up more than $1,000 from last year.

On average, OEM engineers enjoyed a respectable raise of just under 5%.

This year's setting, although not nearly as dramatic, is still witnessing high corporate profits; the stock market, although reeling a bit, continues to break the 7,000-point barrier; and the economy inches steadily ahead. As a result, the 1997 Design News Careers/Salary Survey once again paints a relatively rosy picture for design engineers in the OEM marketplace. Salaries, on average, moved upward, and the job outlook looks bright due to the growth in corporate sales and profits and low unemployment.

However, there is a dimmer switch on some of this brightness. For example, the survey reveals that engineers are working harder and performing more jobs than ever, are feeling the pressures of shorter design cycles, and find it more difficult to keep up with the latest technological innovations.

Moreover, survey respondents have other concerns on their minds, particularly when it comes to the environment. In this respect, water and air pollution head the list of issues the engineers either face on the job or feel will have a significant impact on their lives. There also is uneasiness about product safety, air travel safety, and the crime scene.

Payroll productivity. Let's begin this year's survey findings with a topic of utmost interest to all engineers--salaries. Once again, the news is good. The survey reveals that our OEM engineer respondents have an average base salary of $55,000. That's up a healthy $1,340 from the $53,660 average yearly pay reported last year.

Part of that salary surge might relate to the 14% boost in net income realized by the Forbes 500 companies. The $325 billion total matched the performance of the S&P 500. And for 1997, analysts are expecting a 15% gain. That bodes well for more salary increases this year. As an indicator of which engineers might benefit most from this revenue revelation, check out the big chemical companies. Exxon Corp. replaced GM as the most profitable U.S. corporation, with Mobil, Amoco, and Chevron also pumping up big earnings. IBM also was a major gainer.

The healthy corporate profit figures also could bode well for adding more engineers to the payroll. The most recent figures from the U.S. Bureau of Labor Statistics (BLS) appear to bear this out. The BLS reports that the number of engineers employed in the first quarter of 1997 rose to 2.05 million from 1.98 million in the fourth quarter of last year. On the downside, the report notes that the engineer unemployment level went up as well, from 1.8% to 2.0%, with 43,000 engineers out of work.

Where the big bucks are. When it comes to who makes the most, aerospace engineers once again head the list. Of the 175 aerospace engineers responding to the survey, 54 made $70,000 or more per year. Automotive engineers don't do badly either, with 27 of the 139 respondents earning $70,000-plus annually. But perhaps the area to watch is computers and business machines, where 14 of the 39 respondents have hit that lofty salary plateau.

As might be expected, those engineers who have been on the job the longest earn the most. For example, 140 of the 378 engineers with 20 or more years of experience take home $70,000 or more in pay. Only one engineer with less than two years of experience had reached that level, and just two of the 138 respondents with two to five years on the job earned as much as $60,000 to $69,000.

Unlike past Design News surveys, education didn't play as big a factor in how much engineers make. For instance, 117 of the 670 respondents with a bachelors degree in engineering earn more than $70,000, while 74 of the 238 engineers with a masters degree earn that much, and 11 of the 24 Ph.Ds were in that same salary range. Getting a masters degree in business administration might add to an engineer's earning capacity, however. A total of 24 of the 70 respondents with a business degree behind their name make $70,000 or more.

It also might not be too surprising that engineers employed in the bigger companies earn somewhat more than their counterparts. Of the 559 repondents in firms that employ 1,000 or more, 135 fall into the $70,000-plus salary range. Only 28 of the 186 engineers in companies with less than 100 employees could make that claim.

And when it comes to what area of the country pays the most, the Pacific region takes top honors. Of the 133 respondents from this area, 50 garner wages of $70,000 or more. Engineers in the Middle Atlantic states also made a strong showing, with 50 of the 304 respondents in the $70,000-plus bracket. Only two of the 87 engineers in the West North Central region have reached this wage scale.

Another respected report, Dallas-based Source Engineering's 1997 Engineering and Manufacturing Salary Survey and Career Planning Guide , discloses that engineers in the design development category receive the following median salaries: software, $50,000; digital ana-log design, $49,900; semiconductor, $49,000; and mechanical/robotics, $44,800. In the manufacturing arena (equipment/test/QA/IE) engineers earn a median salary of $42,000.

The greatest growth segment, according to the Source Engineering report, is computer engineering, particularly in the software market. The survey also notes that employers are looking for pro-cess engineers with a proven track record in increasing productivity and reducing costs.

Raises the rule. How does the increase in salaries translate when it comes to who received them and how much they swelled paychecks? According to the survey, 54% of the design engineer respondents received a raise of under 5%, another 17% relished raises from 5 to 7%, 8% garnered 8 to 10% increases, and another 8% saw their checks go up by more than 10%. This compares favorably with last year's survey, where the average raise came to 4.9%.

On the downside, 12% of the respondents reported they received no raises. Only 1% said they had the unfortunate experience of having their salaries cut.

The National Society of Professional Engineers, which also publishes an annual engineering salaries report, did not have its 1997 version available prior to press time. However, Nick Wright, who coordinates the report for the society, says that he anticipates this year's figures won't differ much from last year's. In that case, engineers in all categories should expect to see an average increase in salaries of about 2.8%. That figure should fall just above the anticipated increase in the Consumer Price Index.

Preliminary figures of the Institute of Electrical and Electronics Engineers' (IEEE) annual salary survey, due out this month, reveal that electrical and computer engineers also reaped rewards from the booming economy. For example, the median primary income of IEEE members in the U.S. stood at a whopping $72,000. In 1995, the same figure was $67,000.

Engineers may be taking home more pay, but they are also working harder than ever to meet the pressure of shorter design cycles.

The gains look even better if income from all sources is counted, the report notes. Supplemental earnings from second jobs, overtime, pension benefits, and the like pushed the median for full-time engineers to $76,000, compared to $69,725 in 1995, a gain of 9%. The increase is even greater for IEEE engineers on the job for 10 years. They saw their salaries increase a whopping 14.3% from 1995 to 1997.

As the National Business Employment Weekly put it recently: "Engineers nationwide can afford to be choosy these days. Demand for these professionals, especially those specializing in the mechanical, electrical, and software field, is increasing greatly.

Adds Al Schirmacher of Career Counseling and Search (Madison, WI), "A lot of this is pent-up hiring pressure. Companies didn't hire from 1990 to 1993, and now that they're growing, they're going out of their way to find candidates."

As a result, the business employment weekly notes that base pay for engineers rose between 5.5% and 7.6% from 1995 to 1996, and pay raises of 10% to 15% when changing jobs are standard.

Stressed out. Although a majority of our engineer respondents report they are satisfied with their jobs, they are finding the work more stressful. For example, the survey shows that design cycles have decreased by 26% over the past year.

These data come on top of last year's report, where our readers told us that the design cycle was surging along at a 39% faster clip. This indicates that engineers must get their products to market in less than half the time it took only three years ago.

As to what type of work these engineers do, about one-third (34%) say their main concentration is on solving problems they have identified. And they perform this task either as part of the job or "on a voluntary basis."

How to cope. Heavier workloads and less time to accomplish their tasks also create a "keeping ahead of the game" dilemma for engineers. Heading the survey list of reader concerns is the challenge of dealing with fast-paced changes created by technical innovations. This is followed closely by the need to improve computer skills, the ability to handle jobs outside their engineering speciality, and the ability to become more adaptable to a growing global economy.

How do the engineers plan to cope with these concerns? The survey reveals that the "preferred" way (56% of the respondents) to keep current about the latest technologies is by reading engineering magazines. What they hope to find out is "how other engineers use technologies to develop better products."

CD-ROMs are another good way to keep informed, according to three out of five of the respondents. What type of information is most believable? Articles written by magazine editors tops the list, followed by supplier data. Trade shows (10%) and seminars (5%) are the least informative, say the readers.

What's the best way to deal with faster design cycles? Readers tell us that design teams (46%) provide the best solution. Next in line: purchasing engineering software (39%); outsourcing design activities (37%); hiring more engineers (23%); and purchasing or leasing rapid-prototyping tools (11%).

What will impact the design engineering field the most over the next 10 years? Specialization! More than 60% of the respondents cited this trend as a major factor for the profession. Only 26% expect the type of work they perform to remain relatively the same, while 11% predict there will be less specialization.

What type of specialization will play the most prominent roles? Three out of five respondents envision telecommunications becoming more specialized. Nearly half expect biomechanics to emerge on the scene, while another one-third see nanotechnology and ceramics as growing specialties.

Netting the Internet. Another problem-solving aid appears to be the Internet. Our survey reveals that nearly three out of five design engineers now have access to the Net at work, and of that number, nearly half surf the Net on their jobs.

Of the surfers, four out of five use the Net to gather supplier information and for literature searches, while more than half want to learn more about new technologies. Another 40% use the Net to download new software, 16% to discuss design problems with other engineers, and 16% to collaborate with others in remote locations or about designs. Only 5% use the Net to submit designs to others for approval.

To help engineers extend their Internet reach, the Source Engineering survey reports that corporate investment in the Net today stands at $2.5 billion. By the year 2000, it predicts this figure will skyrocket to $25 billion, an estimated growth rate of 40 to 70% a year. "Companies worldwide are discovering the value of having a presence on the Internet and doing business on-line," the report states. "It has now become a viable vehicle to conduct real-time product and service sales."

Advances on the horizon. The survey also asked design engineers to identify the field most likely to produce advances for solving anticipated problems in areas ranging from air pollution to illegal drug use. Of the 13 problems they observed (see table), the respondents believe that sensors and materials will most likely produce the best solution for at least five of the problem areas.

What kind of advances do design engineers expect to see over the next five years in some of these critical areas? In the domain of air pollution, they predict that alternative cleaner fuels, better filters, and the use of electric vehicles will lead the list. On the water pollution scene, they forecast that better filtration and monitoring will pave the way. To improve crime detection, they say that better detection devices and sensors will help. To improve air-travel safety, they believe that safer aircraft, tighter security, and better detection methods will turn the tide. And in energy conservation, our readers feel that better design and more efficient appliances and vehicles will go a long way towards conserving precious energy resources.

Booming economy means jobs. So what can engineers look forward to seeing in next year's survey report? Once again, the outlook appears rosy.

For the first quarter of 1997, the U.S. Commerce Department reported that the output of goods and services grew at a torrid 5.6% annual rate, the best quarter in nine years. Moreover, the government now estimates that the economy has expanded by an impressive 4% after inflation during the past year. But inflation has yet to revive. U.S. prices climbed at a 2.2% annual clip in the first quarter, less than in the quarter before.

As a result of this strong financial picture, the economy is sucking into the labor force many more workers--2.5 million in the past year--than any of the experts had predicted.

Many workers who weren't looking for work a few years ago--because they as-sumed that no one would hire them--are discovering that things are different now. Moreover, the long-term pace of productivity improve-ment many be quickening at last, according to the Wall Street Journal.

Keeping up with the latest technologies has become a major concern with engineers.

In addition, globalization continues to restrain American inflation. The strong dollar and oil-price declines are pulling down costs of imported goods.

And the best news of all for engineers is that the nation's unemployment rate tumbled below 5% in April for the first time in nearly a quarter-century. "It's a worker heaven," says Allen Sinai of Primark Decision Economics. "This myth that the American worker is an unhappy camper went away eight to 10 months ago. There are plenty of jobs available."

Boeing provides some indication of how open the job market might be for engineers in the near future. Late last year, Aviation Week & Space Technology reported that the aerospace giant was having trouble recruiting and retaining engineers. In fact, the job offer acceptance rate in certain areas, such as PEs, was as low as 9%. In the meantime, Boeing must bulk up its labor force by some 13,200 workers to accommodate surging transport orders.

Commenting on the latest economic report, George Perry, an economist at the Brookings Institution, notes that the "best piece of news we've gotten in a decade is that we can continue to expand this fast and reduce unemployment and produce a lot of jobs for people without running into a barrier of inflation." This should bode well for engineering jobs.

Anatomy of a design engineer

What does today's typical design engineer look like? Based on the 1,144 engineers who completed this year's Design News Careers/Salary Survey, the typical OEM engineer's resume might read like this:

He or she has been on the job for about 14 years. They work for a company that employs more than 700 people. They don't supervise anyone. They hold a bachelors degree in engineering. And their workload continues to grow.

Breaking down the responses more closely we find that not only do 58% of the engineers have a bachelors degree in engineering, but one out of five has a masters degree.

About a quarter of the engineers are employed at automotive or aerospace firms. The remainder are about evenly divided among firms that make everything from consumer and electronic products to defense systems, industrial controls, machine tools, appliances, and construction equipment. These companies have an average of 764 on their payrolls, with 49% of the respondents' companies employing more than 1,000 people.

Another one-third report they have been on the job for 20 or more years. Only 5% have worked less than two years.

More than half (56%) of the design engineer respondents do not manage other people. Those that do report the average number of people under their supervision is seven. Only 3% managed more than 20 people.

About 30% of the engineers work in the East North Central (Wisconsin, Illinois, Indiana, Ohio, and Michigan) region, 13% in both the Middle Atlantic (New York, Pennsylvania, and New Jersey) and Pacific (California, Nevada, Washington, and Oregon) regions, and 9% in both the South Atlantic (Delaware, Virginia, Maryland, West Virginia, North and South Carolina, Georgia, and Florida) and West North Central (Minnesota, Iowa, Missouri, North and South Dakota, Nebraska, and Kansas) regions. The rest were spread about equally among the New England (Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, and Connecticut), Mountain (Montana, Idaho, Wyoming, Colorado, Utah, New Mexico, and Arizona), West South Central (Texas, Oklahoma, Louisiana, and Arkansas), and East South Central (Kentucky, Tennessee, Alabama, and Mississippi) regions.

Do they like their jobs? Nearly three-quarters of the engineers report they are either satisfied or very satisfied with their work. Another 21% say they are marginally satisfied, with only 6% reporting unsatisfactory working conditions.