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fundamentals
Very well put Mr Watkins.
RWatkins
I take issue with the statement "The emergence of the nomadic engineer is a ...
2010 EE Times Global Salary and Opinion Survey
George Leopold
11/28/2010 4:13 AM EST
While a majority of engineers around the world reported earning a bonus during the past year, the overall trends this year for total compensation hardly compare to those of a decade ago, when engineers were being courted with signing bonuses and stock options.
We went back 10 years to revisit the findings of our 2000 Salary & Opinion Survey, and the results and attitudes of engineers in 2000 differ as markedly from this year’s results as today’s global economic conditions contrast with those boom times. Back then, engineers were far more concerned with the Y2K threat than with job cuts.
For instance, fully 62 percent of respondents at the beginning of the new millennium said they had received a bonus for personal or company performance during the previous year. Nearly 70 percent of managers reported having received a bonus. The highest percentages of engineers earning additional compensation in the 2000 survey were computer (78.6) and communications (70) engineers. Even new hires reported receiving signing bonuses a decade ago.
The odds of receiving a raise were also much higher in 2000. Among the roughly 800 respondents we surveyed that year, a whopping 86.6 percent said they had earned a raise. Just under 12 percent said their salary had remained unchanged over the previous year. Only 1.6 percent of engineers surveyed in 2000 reported a pay cut.
For those earning a raise, total compensation for engineers in the 2000 survey hovered around $90,000 a year. By comparison, North American mean total compensation in 2010 was $107,300. But the percentage of those earning bonuses over the past year was lower (59 percent at the high end) and the bonuses themselves smaller than a decade ago.
Working conditions also have declined over the past decade as a result of layoffs, acquisitions and the addition of new company divisions. More than half of the 5,093 respondents in this year’s survey reported engineering shortages at their companies. One result is that, on average, most engineers work more than 40 hours a week (Japanese engineers led the way, working an average of nearly 50 hours a week), and a quarter of European and North American engineers said their employers expect them to be available all day, every day.
A decade ago, when engineers were far less connected than today, nearly three-quarters of respondents said they had achieved a proper balance between work and their personal lives.
Salary figures aside, the other fundamental change over the past decade has been the rise of the Chinese and Indian engineer. Many were trained in the United States, and a significant percentage of those have returned home either to work for emerging technology giants or to start their own companies. With a global perspective, many of these engineers told us their base salaries are not comparable to those of other engineers with the same qualifications.
That growing frustration is translating into restlessness. Our 2010 survey found that 41 percent of the Chinese respondents and 35 percent of the Indian engineers are looking for new employers. Their colleagues in North America and Europe are less satisfied professionally than a decade ago but are less likely than their counterparts in China and India to move on.
If the economic booms continue in China and India, something will have to give.
Globalization, an aging U.S. engineering profession and other factors yet to be accounted for will likely drive salary trends over the coming decade.
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| Despite economic uncertainty, more than half of all the respondents in our global survey said they had received a bonus in the past 12 months. |
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fundamentals
11/29/2010 4:32 PM EST
I would like to comment on the maxim “the principal function of a business is to make money for its owners and stockholders, and the people who find this objectionable are against capitalism.”
I fully agree with this maxim, but a clarification is in order: the purpose should be to make the most amount of money in the next ten years (or depending on the product type you can substitute 10 years by X years, where X is larger than 3.) The sad fact is that most CEOs and CFOs are not at all interested in maximizing the total delivered value to the stockholders in a period of 10 years or so. They are interested in maximizing the profits in the next six months, or maybe a year. They are happy to do that even if they know they are running the business to the ground in the long term. In the short term, they collect huge stock awards and bonuses. In the long term, when things get sour, they blame our government and all other governments, they blame cheap foreign competition, and so on, and move on to another position. Then the vicious cycle repeats.
I sincerely believe that the fundamental problem is not the globalization. The detrimental problem is the very narrow short term focus in terms of results. Today, many CEOs prefer to acquire successful small start-up companies by spending hundreds of millions of Dollars, instead of having taken the long term view several years back and having done the work in house for a tenth of the price. The financial markets reward this behavior.
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george.leopold
11/30/2010 5:28 PM EST
I tend to agree with "fundamentals" about myopic CEOs focusing only on short-term gain at the expense of long-term stability. While interviewing a semiconductor CEO several years ago, he checked his company's stock price at least twice in an hour. I quickly realized he was more interested in tracking the value of his stock options than discussing his company's strategies for growth and innovation. This is no way to run a railroad.
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Charles.Desassure
11/30/2010 6:46 PM EST
Thanks for your article. Baseon the information in this article, and talking to engineers in my area, this report is about right…(take or give a few points). The job market is improving and many businesses will start hiring engineers. That is good news for everyone.
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Frank Eory
11/30/2010 8:20 PM EST
I wonder if EE Times readers perceive a difference in short-term vs. long-term focus in CEO and senior management focus in private companies vs. public companies?
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Neo1
12/2/2010 12:07 AM EST
So all this recession did come up with a something bright in the end, the Nobel in economics for those profs.
Knock, Knock, who's hiring?
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GREAT-Terry
12/2/2010 10:47 AM EST
Long article but good information and nice analysis.
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wn
12/5/2010 9:26 PM EST
Andy Grove almost said it last month. The US economy was big enough during the past 50 years to permit Japan, Korea, Taiwan, and Singapore to develop huge balance of trade in their favor. NAFTA was basically an extension of the same thing apparently. The US is no longer big enough to survive in tech if we continue doing business the same old way.
The demize of US high tech actually was clear during the past 10 years, but the free wheeling easy money of the past decade blindfolded us as to the problem.
As Intel and others can now see, if we are going to compete directly against the Chinese government party PLA, the US Congress must wake up to the fact that some clearcut national high policies are not only important, but indeed critical for the survival of the US as a first world nation.
Somehow it was ok to let the Pacific rim nations under strong government leadership develop the huge trade surpluses existing today. But not with China playing the same game except even more overtly and covertly, our government cannot continue to simply sit by and say "let IBM and Texas Instruments fight it out with the Pacific Rim". We are failing miserably and will continue to do so unless the US government gets into the act with some clear high tech policies that are based on wisdom and concern for tomorrow.
Respectfully submitted,
William
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Yamaha
12/13/2010 11:09 AM EST
"We often hear from readers who are engineers that they try to dissuade sons and daughters from entering the profession."
I agree and feel the same. If I could do it again I would stay far away from this field. Engineering is hard, thankless work. The pay scale is just not worth the burden of long nights, personal responsibility, stress and meeting demanding expectations from management. I've met personal trainers and strippers who make more than I do, and they're not designing components for the latest greatest jet engines. Problem solving is fun and challenges the mind - but in this field, it means dealing with problems every minute of every workday.
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RWatkins
3/11/2011 4:44 PM EST
I take issue with the statement "The emergence of the nomadic engineer is a likely consequence of accelerating globalization, rising interconnectedness and the diffusion of advanced technologies." In fact the nomadic engineer is the consequence of the severely diminished mutual respect and value between the middle to upper management of companies and the engineering staff. A large portion of this change has occurred during the last 50 years, accelerated since the mid 1990's. A portion of engineers' readiness to move on is due to the elimination of the lifetime career expectation at a single company, that has been caused by severe layoffs of skilled technical personnel done comparably to layoffs of non-skilled and non-technical personnel. Time was when the people who were retained at all costs were the engineers, even to the point of temporarily using engineers as secretaries and non-technical staff in needed positions during economic down-turns. The change to equality in layoffs has cost short-sighted businesses, who even now "off-shore" their design projects only to get poor quality results that damage corporate bottom lines and quality reputations.
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fundamentals
3/11/2011 5:26 PM EST
Very well put Mr Watkins.
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