You're Hired!

July 18, 2005

7 Min Read
You're Hired!

In the depths of the tech wreck years, Paul Porter was so dismayed by the cutbacks of his co-workers at troubled Nortel Networks that he decided to leave the field. Hiring in electronics is now picking up, but that hasn't prompted Porter to change his mind.

After telling Design News early in 2003 that he had "spent seven years in school for a six-year career," the MSEE graduate gave engineering another shot. He picked up a job "training a team in India to write wireless telecom test scripts for GSM, which was the technical foundation of my career." But that was so unmotivating that he quit to start law school.

Now a year from earning a law degree that will bring "a starting salary 80 percent above what I made in engineering," the 31-year-old still sees engineering as a dead end. "I am actually astonished here at University of Michigan that so many young people still major in engineering. It just seems like a bad idea to me," he says. He cites layoffs, offshoring, H-1B immigrants, and a general lack of respect for engineers as reasons.

For those who still feel engineering is a good career, things are looking up. After three years when the pink slip seemed to be the predominant communications medium between HR and engineers, there are signs of life. "I'm seeing what I call the Lazarus Effect, returning from the dead," says Steve Patchel, senior consultant at Watson Wyatt Worldwide of Santa Clara, CA.

Statistics from the Department of Labor show an upswing, with the total number of engineers rising steadily since bottoming out in 2002. But the current 1.82 million level is noticeably below the 1.95 million level at the height of the high tech/dot com boom. The percentage of unemployed engineers is at 2.5 percent, nearly double the 1.3 percent rate of 2000, but well below the 4.3 percent unemployment rate of 2003.

In another measure of market strength, late last year the IEEE-USA announced that its members saw their first median wage decline in 31 years. Salaries for survey respondents decreased from $101,000 in 2002 to $99,500 in 2003, though it's still up solidly from $93,100 in 2000. A 2004 survey by the American Association of Engineering Societies Engineering Workforce Commission shows a slim 1.5 percent salary increase for all engineering disciplines.

A couple areas that were once seen as dying are now leading the resurgence. After shrinking since the fall of the Berlin Wall, defense and aerospace are surging forward today, actively seeking engineers. "Last year, we had a total of four job fairs. In the first quarter of '05, we are scheduling 32," says Jim McNeely, staffing director at Northrop Grumman's Integrated Systems Sector in El Segundo, CA.

Engineering employment is inching back up, but it's still below 2000 levels.

Last fall, Boeing Co. began running what it calls interview events, lining up its recruiters and managers with hundreds of interviews in a day, flying potential candidates to Seattle. "These events have been very successful," says Julie Drobny, senior manager in Boeing's global staffing organization in Seattle.

She adds that "the market is competitive out there, especially for someone with 20 years experience." The company is currently looking for engineers with experience in wireless networks, RF and electromagnetics, and thermal dynamics.

The demand for structural engineers has prompted Northrop Grumman to set up a job fair in Detroit, supporting it with extensive advertising in hopes that automotive engineers will have the skills needed for aircraft programs. That's not the company's only field of interest. "We've got heavy requirements for design engineers in software engineering, avionics, system engineering, and for structural design and analysis engineers," McNeely says.

Still many concerns

Hiring isn't quite as upbeat in many other engineering fields, but at least it's moving upwards after soaring during the dot com boom, then crashing. "If late 1999 was a 10 and 2002 was a one, we're probably around a four right now," Patchel says.

Defense is immune to some of the challenges facing many other industries, since security clearances require U.S. citizenship. But elsewhere, globalization is a key issue. "H-1Bs and offshoring will remain major issues. They're sensitive issues for members," says Paul Kostek, Seattle-based chair of the IEEE-USA Career and Workforce Policy Committee.

An IEEE-USA committee is currently studying projected hiring trends in various industries, with the goal of letting engineers know what skills will be in demand so "they can get pointed in the right direction," Kostek says.

Some emerging fields will offer a few openings for a small number of specialized engineers. "Biotech is on fire. They will hire some software guys, and when it turns on, they will be hiring process and manufacturing engineers," Patchel says.

There is still a strong demand for analog engineers, continuing a trend that's been ongoing for several years. "There are just not enough of them," says Pam Ferrell, manager of hiring at Texas Instruments.

In the engineering disciplines that employ larger numbers, the good news is that HR managers are at least more bullish than in the years following the tech wreck. But not much. "We remain cautiously optimistic about the rest of the year," Ferrell says.

The job-heavy auto industry is also restrained as globalization impacts markets and profitability. "We are currently hiring engineering candidates to fill positions that align with our strategic needs while maintaining an efficient and lean organization. Powertrain and electrical engineers are currently in demand," a Chrysler spokesman said.

The aging workforce is also changing the marketplace. That's particularly true in areas that hired young engineers decades ago and never got rid of them. "The power industry is finally doing some hiring. Utility companies have the same problem as the federal government, they're seeing a lot of retirements," Kostek says.

Many government and utility openings are outside the concentrated areas for EE jobs, which brings up another potential problem for engineers in Silicon Valley, Boston, and Austin, where applicants far outnumber job openings.

"One challenge is that with increased productivity, companies aren't hiring as fast. In an area like Silicon Valley, where you've got a lot of engineers and jobs aren't coming back as quickly as many would like, some engineers may have to look at relocating," Kostek says.

That saturation is something that even small companies see. Though the San Jose office of Emulation and Verification Engineering Inc. has only seven people, engineers know the company has done some hiring. "Almost daily, we receive resumes from engineers," says Lauro Rizzatti, general manager of EVE-USA. He notes that "resumes from people out of work are more than we'd like to see," but adds anecdotally that his crowded commute tells him, "There's no crisis around here. There are a lot of people driving to work."

Employers expect to hire more graduates this spring compared to last year.

Throughout the semiconductor industry, hiring has replaced layoffs, but numbers aren't increasing significantly. "We're on roughly the same pace as last year, when we hired more people than the previous two years combined," says Scott Sprague, director of staffing, STMicroelectronics' North America Region in Carrollton, TX. That represents close to 200 engineers in the U.S., he explains.

Though hiring for senior engineers is still rising slowly, openings for new graduates are expanding a bit more rapidly. The latest survey by the National Association of Colleges and Employers (NACE), a Bethlehem, PA, research organization, predicts that hiring this spring will be 13 percent higher than a year ago. While that's an overall figure for all majors, NACE notes that engineering degrees are four of the top 10 majors, while two software degrees are also in the top 10.

Still, there's concern about the supply of young engineers. HR and engineering managers increasingly mention that high school and college students seem to be shying away from engineering fields, particularly in electronics. "The biggest trend that is also the most frightening for our industry is the continued decline in the number of engineering graduates," Ferrell says. Another concern is that about half of the grads from U.S. engineering schools are foreign nationals and a large percentage of them are taking their skills back home, she adds.

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