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1 October 2005

Use business smarts to gain ground

Score short-term jobs in stricken areas, but get ahead with business acumen.

By Ellen Fussell Policastro

Engineers take note; certifications are still important, as are degrees and experience. But business savvy will be the saving grace to help hike engineers' salaries as the industry heads into 2006, according to the numbers and to expert opinions. Engineers can look forward to a great future if they play their cards right.

Engineers will see hope on the horizon as end-user companies scramble to fill gaps left from automation suppliers moving much of their engineering force to lower-cost geographies, said Peter Martin, Invensys Process Systems' vice president of performance management in Foxboro, Mass. "Engineering jobs within major suppliers in the U.S. will continue to move overseas, leading to an overall reduction in engineers," Martin said.

On the other hand, Martin thinks plants have reduced engineering jobs "beyond what they should have with the hopes of having companies, such as automation suppliers, fill the gap," he said. "With the automation supplier reducing their staffing in this area, and as the demand for engineering grows in North America, the suppliers may not have the local engineering talent on staff to meet the demand, so we may start to see a rise in engineering positions in the end companies."

Other developments in the economic atmosphere could have a possible short-term change on engineering jobs. The devastation in the Gulf Coast from Hurricane Katrina has led some experts to expect short-term job spurts for engineers in affected states.

Keep these developments in mind as you read the results from this year's annual National Society of Professional Engineers (NSPE) salary survey.

The overall engineering median total annual income increased 6.5 % from last year. Median income shows a consistent increase with increased engineering experience. The median income of full-time salaried respondents increases regularly from $44,200 for those with under one year experience to $100,100 for those with 25 years experience or more.

Degrees pay off

While Martin thinks the Gulf Coast situation "may lead to a rise in engineering demand over the short term," he doesn't see a "major shift in the salaries by segments." But he does believe engineers with "good business savvy and perhaps even an MBA will become the higher paid engineers regardless of engineering discipline."

And if history repeats itself, this will indeed be the case since last year full-time salaried respondents with doctoral degrees in engineering had a median income of $90,000, a median 37.9% more than those with a BS in engineering, who earned a median income of $65,275. Those with an MS in engineering earned a median of $74,000. Full-time salaried survey respondents holding an MBA or an MBA and an MA or MS had a higher median income than those holding an MS in engineering.

Note: The apparent anomaly of a higher median income for those with less than a BA/BS degree than those with a BS degree in engineering may be due to the higher average length of experience and level of professional responsibility of the former group.

A season for seasoned

The increase in median full-time salaries between one and two years experience, three and four years experience, five and nine years experience, and so on jumps about $10,000 per segment of experience levels. An engineer with an MS degree and three to four years of experience earned a median full-time salary of $54,000 last year. An engineer with an MS degree and five to nine years experience earned $64,160, and an engineer with an MS degree and 10 to 14 years of experience earned $77,234. One interesting twist is the minimal increase of $306 between the doctorates in engineering with 15 to 19 years and 20 to 24 years ($100,000 and $100,306 respectively).

Facilities look south, short-term

The highest full-time salaried median income by major branch of engineering went to those working in nuclear ($101,150). Those working in petroleum ($92,825) followed, along with fire protection ($91,000), facilities ($90,030), systems ($89,900), and marine ($89,570).

Yet the revitalization efforts in the U.S. Gulf Coast could turn this trend temporarily with short-term supply and demand pressures on engineer wages, said Steve Altieri, director of compensation and benefits at Invensys Process Systems in Foxboro, Mass. "There will obviously be a need for more construction, civil, and facilities related engineers," he said, "but I would see these as relatively short-term during rebuilding and probably not sustainable increases in employment."

"As with any natural disaster, jobs do eventually come back to the affected areas. We have no doubt jobs will come back to the [Hurricane Katrina affected] areas, but it will likely take longer due to the magnitude of this situation," said Lisa Tagliapietra, public relations specialist at Manpower Inc. in Milwaukee, Wisc. While unemployment "will inevitably rise among evacuees," Tagliapietra doesn't expect the hurricane will have a major or long-term impact on employment in other areas of the country. "In talking with customers, they don't see the tragedy in the Gulf having much effect yet on their business," she said. Of course, "the first challenge at hand is cleaning up the affected areas, which makes it very difficult at this point to tell how many engineering jobs will be created," she said. "In rebuilding of platforms and levees, etc., absolutely, there will be a need to bring in these types of engineers in the future."

Altieri suspects the rebuilding will include engineers and contractors from firms around the country, and "once that is complete, I would expect wages for those employed in the region long-term to trend as they do today," he said.

At the other end of the survey's full-time salaried median income spectrum were those employed in plastics, geotechnical, manufacturing, industrial, coastal, structural, HVAC/refrigeration, and civil (all between $63,375 and $69,000). Due to insufficient sample size, there were no income statistics for the ceramic, corrosion, mining and metals, ocean, optical, plumbing, pollution, robotics, and welding branches.

Certify yourself

Just over 56% (56.9%) are PEs (0.3% are both PEs and certified in forensic engineering (see "Forensic engineering unplugged"), 1.2% are PEs and certified in environmental engineering, 2.1% are PEs who are also in some other licensed profession, 1.4% are PEs and professional land surveyors, and 1.9% are PEs and certified in some other engineering specialty. Those full-time salaried respondents who are PEs certified with another professional licensing enjoy the highest median annual income ($92,170). Following them are PEs who are also professional land surveyors ($89,880), PEs certified in some other engineering specialty ($87,875), PEs who are certified in environmental engineering ($85,150), PEs who are certified in forensic engineering ($78,500), and PEs who do not hold other licenses ($76,500). Unlicensed engineers have a median income of $65,205, and engineers in training and engineer interns earn a median salary of $51,420.

Who's the boss?

Engineers who supervise others enjoy regular income increases. And when they supervise other engineers and other professionals, their earnings jump even more than if they merely supervise sub-professional personnel, given the same number of subordinates.

Full-time salaried engineers in non-supervisory positions have a median income of $60,000, while the median income of those supervising/managing only engineers, scientists, or technologists increases regularly from $72,200 for those who supervise one or two such professionals to $137,250 for those who direct the activities of 50-plus professionals.

Median salaries of full-time engineers supervising professionals and non-professionals progress from $69,000 for those supervising one to four subordinates to $153,000 for those managing 250 or more such subordinates.

Salaries rise where sun sets

As expected, the highest median incomes are in the Pacific Southwest states ($78,000), the Middle Atlantic states ($72,200), and the South Central states ($73,000). The lowest full-time salaried median incomes are found in the Upper Mountain states ($62,900), the Central Plains states ($65,537), and the Great Lake states ($67,000).

The NSPE survey's analysis of salaries in certain metropolitan areas includes only those areas with a minimum of 10 full-time salaried respondents. The highest full-time salaried median income is in Monmouth-Ocean, N.J. ($100,000). Following that is Richland-Kennewick-Pasco, Wash. ($95,240), Newark, N.J. ($94,450), San Jose, Calif. ($94,000), and Augusta-Aiken, Ga.-S.C. ($91,000). The lowest full-time salaried median incomes appeared in Biloxi-Gulfport-Pascagoula, Miss. ($53,826), Sioux Falls, S.Dak. ($54,000), Fargo-Moorhead, N.Dak.-Minn. ($54,250), Pensacola, Fla. ($55,787), and Bismarck, N.Dak. ($55,800).

Of course, in light of U.S. economical changes due to Hurricane Katrina's destruction, "there could be a temporary spike in some wages until local workers are able to return to some sense of normalcy with housing and infrastructure," Altieri said, "but I would expect these spikes to level." And while he said it's still too early to tell, the "cost of living and supply and demand tend to drive wages, so unless workers are unwilling to return to the region, I would not expect long-term impact in the southern states. If I look back at other hurricanes or similar disasters like the California earthquakes, I don't recall seeing or hearing of long-term impact in wages," he said.

Women at work

The overall median income of female engineers ($60,000) is still only 83.3% of that of male engineers ($72,000). Yet it seems new-hire managers are beginning to catch on. Data analyzed by length of experience reveals female engineers have a higher median income than male engineers in four out of the eight groupings. The income by gender in the four experience ranges with the largest female sample revealed female engineers received 97.3% as much as male engineers with five to nine years of experience, 99.1% with three to four years of experience, 100.1% with one to two years of experience, and 96.9% with 10 to 14 years of experience.

Company size matters

There's an overall increase in the median of full-time salaried incomes, ranging from $66,500 for those in organizations with less than 200 employees to $78,000 for those in organizations with 20,000 employees and over. By revenue, the numbers range from a median salary of $66,500 for those working in organizations with revenue under $50 million to $81,994 for those working in organizations with revenue of $2 billion and over.

Deal with downsizing

Layoffs are inevitable across industries and engineering sectors, especially in economic downswings. Last year was no exception. Engineers were hit hard across the board, with 69.1% overall losing at least one job to layoffs or downsizing. Overall 21.3% lost two jobs, 5.8% lost three, and 3.8% lost four or more. The largest number (89.6%) included those in the category of Engineer I/II, who lost at least one job due to a layoff or downsizing. The numbers decrease little in levels of experience. In the Engineer IX category, 71.4% lost one job due to downsizing, 20.4% lost two, 3.1% lost three, and 5.1% lost four. However, slightly more higher level than lower level engineers lost at least two jobs due to downsizing last year; the biggest difference appears where 29.3% in the Engineer VII category lost two jobs, while only 8.3% of those in the Engineer I/II category lost two jobs.