Don't you feel flattered?
Of course, that might depend on your perspective, whether you think there's a shortage or not, whether you think engineering is a good career and whether Congress should be setting limits or eliminating limits on the number of engineers we allow into the country from elsewhere in the world. And it also depends on whether you're feeling just slightly rattled by the unsettling reemergence of that dreaded early 1990s phenomenon: downsizing.

EE Times readers aren't shy about letting us know how they stand on all those points. This year, our survey adds the perspectives of engineers and managers in Japan, Korea, Taiwan, Singapore and Hong Kong, thanks to the participation of Nikkei Electronics Japan and Nikkei Electronics Asia. In all, there were 681 U.S. responses, 500 from Japan and 281 from the Korea-Taiwan-Singapore-Hong Kong group.

Shortages: half and half
For the first time ever, respondents to last year's "Salary & Opinion Survey" agreed by a slim 50.5 percent to 49.5 percent margin that there was, in fact, a shortage of engineers. Essentially, the 1997 readers split down the middle.

So did the 681 American EEs who returned their 1998 surveys. Only this time, the needle slipped below the 50 percent mark, with the tiniest edge toward those thinking there is no shortage.

The reason a 50-50 split is so significant lies in the historical perspective of past surveys. Since the 1970s, when this survey was first presented, engineers have emphatically rejected the idea. Typically, 80 percent to 85 percent of the respondents nixed shortages as nonsense with comments such as this one from a 1998 respondent: "Absolutely not! This is crap. [Engineers] are just underutilized."

But ever since 1995, that total denial has been eroding to a point where the profession is now evenly divided. No one can claim victory here.

However, the division may not be as clean-cut as the overall numbers suggest. The split is more along the lines of managers vs. engineers. Significantly, 65 percent of the responding design and development managers detect a shortage, while only 45 percent of the engineers agree. The fact that there are more engineers than managers tilted the overall average to 50.5 percent.

Typically, a communications equipment manager writes, "I have had difficulties hiring RF, digital [and] mechanical engineers and electronic laboratory technicians."

But not all managers see a shortage. "I feel engineers are cast in many non-engineering roles, creating a false shortage," says a New Mexico group leader. "In my company engineering often moves the product through manufacturing."

Among those who reject shortages is this Idaho engineer: "The lack of technical staff has been economic, not due to [having] no one in the work force. This way, cuts in staffing are not radical when business slows."

The only shortage, says a California senior engineer, is for "people willing to take jobs outside the mainstream glamorous areas of digital, wireless, etc. design. It's hard to find support, software, manufacturing, etc."

As in past years, Japanese engineers have a different perspective; more than eight out of 10 don't think Japan has enough engineers. But design and development engineers and managers responding to the Nikkei Electronics Asia survey side with the Americans: Half see no shortage.

We asked everyone if their projects had been delayed this year due to lack of personnel. No, reply 55 percent of the U.S. sample. Again, that broke out differently by job function. Some 54 percent of the managers-software managers, technical directors, principal engineers and project engineers-say they couldn't get the job done on time due to personnel shortages.

Engineers dismissed that as malarkey. Only 43 percent blamed delays on personnel shortages. "Technical people are not in short supply, only cheap ones," says one California respondent. "Companies do not want to pay for talent. Move 'em in, move 'em out."

Of course, each group has a different perspective. Managers are more likely to hire than engineers are, and consequently they may have a closer view of the situation. If they couldn't fill the requisitions, or couldn't interview enough good people, then it appeared to them that there is a shortage. From the engineer's point of view, talk of shortages could hurt their bottom line. Flooding the market with immigrants could deflate their salaries, some believe.

Two-thirds of the Japanese who replied blame delays in their projects on a lack of engineers. But only 36 percent of the Korean, Taiwanese, Singapore and Hong Kong engineers see it the same way.

We asked those who believe that there is a shortage what kinds of people they were looking for. The answer appears to be all kinds.

California section head: "Analog chip designers are in short supply because universities have not been producing them."

Semiconductor engineer: "Software engineers. Engineers with EDA tool development experience."

New York department head: "Those capable of doing RF and higher-frequency designs."

Technical director: "ATM-knowledgeable network engineers. Compression specialists (MPEG, multi-media, audio processing). Embedded software."

In Asia, respondents were looking for analog engineers, hardware engineers and, as one put it, "experienced engineers with good English communications skills."

Employment
The job picture is changing by the day. The Salary Survey was mailed in May and most responses arrived in June. But since then, such companies as Atmel, AMP, Northrop Grumman and others have announced layoffs. They join other industry leaders that trimmed jobs this year, among them Motorola (15,000), Texas Instruments (3,500) and Intel (3,000). Thus far, the impact has been mixed.

Robert Rivers, editor of Engineering Manpower newsletter, estimates the second-quarter unemployment rate for electronics engineers at 2.2 percent, a sharp rise from the first quarter's 0.9 percent. It seems EEs have suffered more layoffs than other disciplines in engineering because so many of the job cuts have been in the semiconductor and electronics manufacturing businesses, particularly those with high exposure to Asia.

The unemployment rate for EE Times' "Salary & Opinion Survey" respondents is higher, because the question is worded differently. We asked whether they had been unemployed at any point in the last year, and 3.6 percent confirmed that they had been. That's not the same thing as asking if they were currently unemployed or voluntarily unemployed. The 3.6 percent is an improvement over last year's 4.5 percent. In past years, when we've asked respondents if they were out of work at the point they filled out the survey, only a handful said they were.

Job security provides a more accurate picture of the respondents' state of mind concerning employment. Back in the dog days of 1993, 22 percent said they were "not secure at all" in their jobs. This year that dropped by half to 11 percent. And the number of those who feel "secure" has risen to 42 percent from 1993's 27 percent. Another 46 percent, about the same as last year, told us they feel "reasonably secure."

Then we tried to find out if this feeling of security had shifted at all during the last year. It hasn't. Half are as secure as before and the other half splits between those feeling more secure and those feeling less. That's within a couple of percentage points of last year's group.

Our conclusion is that engineers are not yet worried about the re-emergence of job cuts, downsizing and layoffs. This despite the fact that one-third acknowledged layoffs at their companies in the last 12 months, with 20 percent reporting them at their immediate workplace (vs. layoffs in another division or site). Are our respondents deluding themselves?

The downsizing picture is much better than it was in 1993 when 43 percent reported layoffs at their immediate workplaces. This year's 20 percent figure is only slightly higher than 1997's 18 percent.

Rivers estimates more than 35 companies have cut more than 100,000 jobs so far. While many have been support jobs rather than engineering, the rise in unemployment indicates that the first ripple is being felt in the EE community. Rivers said that he does not think this is a temporary setback. Until there's a turnaround in Asia and the semiconductor industry overcapacity disappears, global electronics organizations face a profit squeeze.

Asian crisis-in Asia
Some 31 percent of Taiwanese, Korean, Singapore and Hong Kong engineers and managers responding to Nikkei Electronics Asia's survey confirm that their companies had cut jobs during the economic crunch. The impact was considerable in some workplaces.

"Benefits decreased," one engineer writes.

Another lists the following results: "Closed down some sales offices, no bonus, employment freeze, budget freeze."

There was only a marginal incremental impact at one respondent's workplace. "A bit early to see impact; maybe another year."

"The annual bonus will be decreased," an engineer reported.

Despite the shakiness of the employment situation in those four regions, 80 percent of the respondents there feel either "secure" or "reasonably secure" in their jobs. Nikkei Electronics Asia asked its readers, "Have you taken any special steps in securing your present job?" Yes, replied 29 percent.

Here are some responses:

• "The best way to secure a job is always to contribute your best consistently, regardless of the situation."

• Another respondent resolves to "work harder on profit-making project"-always a good survival tactic in the United States, too.

• Several in the Nikkei Electronics Asia group report taking education courses to broaden their skills.

As for Japan, the survey there did not ask about the current recession, but so far it doesn't appear to have led to layoffs. Only 5 percent of the Japanese respondents report job cuts in their immediate workplaces. Like the Americans and Nikkei Electronics Asia respondents, the Japanese respondents feel pretty good about holding onto their jobs: nearly 90 percent say they are "secure" or "reasonably secure" in their positions.

Turnover peaks
Meanwhile, back in the United States, job turnover has peaked at record rates in the last year, according to new data out of Washington. Approximately 1 percent of the U.S. work force changes jobs every month; among engineers responding to the survey, turnover is not extreme. On average, they have been engineers for eight years and have switched employers twice. About 15 percent are in the first year of their present jobs.

About 5 percent of the Nikkei Electronics Asia respondents are in the first year of their present jobs; the average there is two employers. Those numbers include first-year engineers as well as those who have moved into new jobs. Past surveys of Japanese engineers confirmed that while lifelong employment is waning, the vast majority of engineers have held only one job.

U.S. turnover doesn't worry some respondents. "People change jobs for a lot of reasons. Right now, it's a seller's market, thus higher turnover. When the market changes, so will the turnover rate," one respondent said.

Others think companies had better take turnover seriously. "The company claims to want to be 'The Best Place to Work,' " an engineer wrote. "Every time an adjustment is made in compensation or work environment, it is up to 'competitive' or average. The fact that people are leaving is coming to the attention of those that are left and they too are starting to look around. A run on the exit is just around the corner for those who do not take this seriously."

There have been raids on underpaid engineering staffs. In some cases, entire departments have been emptied out after a competitor advertised in radio spots, sent mass e-mailings and dangled larger offers in front of engineers. The "Salary" chapter makes it clear that the offers don't necessarily have to be enormous. The mean salary increase that respondents said would entice them to jump to another job is $13,000.

To reduce turnover, U.S. respondents offered some suggestions.

"Announcing short- and long-term goals from corporate to departmental levels so the engineers know which way the company is headed," a Texas software engineer offers.

A software engineer creates his ideal corporate policy: "The company takes care of its employees. The employees take care of the customers. The customers take care of the company. Too often, the company skips over the employees and cares only for the customers."

Corporations have only themselves to blame, according to an Arizona engineer. "Fewer people are patient [enough] to take a slower salary growth with the same company over an immediate jump with another company."

"Management needs to have a long-term plan and organize programs in such a way that clear progress toward those goals can be seen on an ongoing basis," an Illinois engineer offers.

"Address engineers' need for creativity," suggests a New Jersey senior engineer. "Permit personal projects after hours on company equipment." He doesn't say how to handle the legal questions that would result if an engineer stumbles on the secret to blue lasers during a midnight foray.

"Create interesting projects with less bureaucratic involvement," says a New Englander. "Show some appreciation for extra work and outstanding individuals."

"Tie engineers into long-term predictable compensation," a technical director suggests, adding that perks could help. "Home loans; bonus; college for kids; factors that get into people's lives, not just pocketbooks." This respondent not only has a base pay, but also a performance bonus, a business bonus and a stock-performance incentive. Altogether, bonuses make up 25 percent of his total income of $120,000-plus.

Bonuses
More than half of the survey respondents receive bonuses of some sort, a dramatic change from the 1980s, when only a fraction got them. It's one way for workers to participate in a company's success.

Bonuses are also used as a tool to retain people, and to lure them to new jobs. Some 15 percent of the respondents-102 of 681 engineers-report getting new jobs in the last 12 months. Those include:

• four vice presidents;
• four technical directors;
• 18 senior engineers;
• four principal engineers;
• three software managers.

Likewise, nine software engineers, seven systems engineers and 24 design engineers started new positions in the last year.

Of the 102 new employees, 37 percent received signing bonuses. The practice has become common enough that even some engineers in the minor leagues (college) are courted with promises of bonuses.

The purpose, of course, is to get a desired candidate to firmly commit to an offer. Corporations have had difficulties with engineers accepting an offer, only to jump to another company with a higher bid. A signing bonus hooks them into signing a firm contract.

How much did our Bonus Babies get? Of them, 23 got more than $5,000. Predictably, two vice presidents and two technical directors were among them, but so were three senior engineers and a few designers.

To learn what technical skills generate these signing gifts, we asked the Bonus Babies to list theirs. Interestingly, all respondents have multiple skills.

It's not certain just how high those bonuses got because the number listed in the survey was $5,000-plus. But there have been reports of bonuses as high as $20,000 or $30,000.

Other inducements used during the last year included the usual, like a revival in corporations' picking up moving expenses, and the less usual-companies' taking over mortgages, lending down payments and even agreeing to pay for maid service.

However, before you demand a new house from a would-be employer, bear in mind that 63 of the 102 engineers with new jobs got no bonuses at all. And a standard, by-the-books logic designer isn't going to command the same money or perks as someone who can dig below 0.18 micron. Bonuses are by no means universal.

Stock options
Corporations, of course, have had "golden handcuffs" around their best people for a number of years. The most common one is stock options, clamped around 46 percent of respondents. That's up a significant eight percentage points over last year's group and is closing in on the 50 percent point.

Basically, options entitle you to buy a certain amount of the company's stock at a fixed price after a certain amount of time at the company. If the stock goes up to $40, but you have options for $20, you can exercise them at $20 and sell the shares for double the price you paid. A nice perk if the company is successful; not so nice if it flops.

Importantly, stock options are not just for managers. More than half (53 percent) of responding design and development-engineering managers hold stock options, but so do 46 percent of engineers. Those options are worth, on the average, about $28,300, but more than half the holders calculate the value of their options at less than $10,000.

Overall, the mean value has fallen from last year's $30,200. Presumably, it's due to the weaker stock prices for some large electronics employers. Share prices are down for Intel, Motorola and Hewlett-Packard, in the last year.

The other end of the options stick are those engineers and managers with more than $100,000 in options. While they are mostly vice presidents and technical directors, at least four senior engineers claim six-figure holdings in options.

Besides stock options, many respondents take advantage of employee stock purchase plans at their companies. Over half the employers offer ESOPs, where employees can buy stock-often at a discount-through a payroll plan or other arrangement. About 5 percent of the respondents claim they own more than $100,000 in stock in their companies, but more possess under $10,000 worth.

However, in our "Opinion" chapter, it is disclosed that 46 percent of the respondents give their companies a "poor" rating on availability of stock options. However, this can be a bit deceptive because employees of privately owned companies are included.

Still, public companies might take heed of their workers' desire to own a piece of the action. It's a key recruitment tool these days, and foreign companies that can't offer options have had to come up with innovative plans to compete for personnel with American competitors. These plans revolve around earned "units" that can be turned into cash later on.

Options and stock provisions are also part of an engineer's compensation package in some Asian countries, particularly in Taiwan.

Career concerns
Engineers are generally happy with their careers, with the Americans the most satisfied, followed by the Korea-Taiwan-Singapore-Hong Kong group and then the Japanese.

Just over 70 percent of the 681 U.S. respondents are "satisfied with career and employer," up a bit from 1997's 69 percent and considerably higher than the 52 percent in downsized-plagued 1993. Some 61 percent of the non-Japanese Asian respondents say they are satisfied, as do 57 percent of the Japanese.

As in previous surveys, Japan's engineers are more dissatisfied than their American counterparts. Some 18.7 per cent would like to ditch both career and employer, vs. 12 percent of the Americans and 8 percent of the Nikkei Electronics Asia respondents.

For the Japanese, surprisingly, job security is the problem-sometimes it works against as well as for the engineer. Because there isn't much movement from company to company, dissenters and disgruntled engineers can't easily quit jobs they don't like. In the United States, you pack your bags if you're unhappy. In Japan, you check off "not satisfied with career and employer" on salary surveys.

Top career concerns
The top career matter on U.S. respondents' collective minds this year is salaries-but only barely. Closing in fast is concern over striking a balance between work and family (see related story, page 88).

Job security, which after a long run as the No. 1 issue in the late 1980s and early 1990s, slipped behind salaries last year and now stands third. The robust, improved job market of 1997-98 allows engineers to think about better pay and improved working hours. In 1993, they didn't have that luxury.

Here, in order, are the top 10 issues.

1. Salaries. "Provide equity opportunities such as stock options," urges a Georgia engineer.

2. Work/family balance. An Illinois engineer thinks corporations should have "better attitudes toward family-related issues (i.e., flex time, medical leave, work-assignment flexibility.)"

3. Job security. Corporations "should show loyalty to those who've stayed with the company, especially older engineers," a North Carolina systems manager believes.

4. Technological obsolescence. "On-the-job training would demonstrate company loyalty to employees as well as keep skills up to date," a principal engineer says.

5. Education. "We should look at providing training and education to engineers in fields where there is a demand for engineering."

6. Pensions.

7. Age discrimination. "Companies should look at the 'scrap heap' of over-45 engineers," says a Colorado engineer. "Many of us are very technically competent, but most companies won't give us the time of day. I've been trying to transition into software, have taken CS courses at the local university, but companies want young and cheaper people!"

8. Ethics. "Does anyone care about morality?" asks a Colorado engineer.

9. Image. A project engineer says he believes, "We live in a society that teaches children it's not cool to be an engineer."

10. Foreign competition. "Foreign competitors with lower costs" worry a technical director. "Not tight enough import duties on foreign-made products."

Internet job searches
The Internet is a worldwide phenomenon. A lot has been written about Internet design collaboration and sharing of technical data, but it turns out that surfing the Web for job opportunities is increasingly becoming an international event.

More than a quarter of the 500 Japanese respondents checked out job sites in the last 12 months. The situation was the same among the 207 in the Nikkei Electronics Asia group who responded, as 27 percent peeked at such sites as CareerMosaic (6 percent); IEEE's Job Service site (9 percent) and CMP Media's own Techweb Careers site (6 percent).

Among the U.S. engineers, the percentages were much higher: about 38 percent scanned job sites on the Web. Among their favorite sites:

• CareerMosaic (39 percent)
• IEEE (38 percent)
• Monster Board (29 percent)
• Techweb Careers (14 percent)

However, only 10 percent of the Americans were serious enough about these searches to post a résumé online. And, as in previous years, only a handful actually located jobs via the Net: 28 people out of more than 600, or 4 percent.

That's not particularly surprising to Web job-site providers. John Jordan, president of the Internet-based recruiting service of Minority Career Network says he considers that figure pretty good for such a new service. Indeed, when EE Times asked the same question a year ago, a mere 2 percent of the 1997 respondents reported getting their new job over the Net.

"We're seeing a big change," says Jordan, with more hits and more visits. Fewer employers want to pay recruiters 30 percent commissions if they can locate a good candidate for only a fraction of that over the Net, Jordan says.

One factor that will become much more evident in later years is that younger engineers are far more likely to scan the Net for jobs than older ones. Take a look at these U.S. numbers for engineers who say they had gone to the Net in the last 12 months to search for a job:

• 20 to 24 years: 63 percent
• 25 to 29 years: 60 percent
• 30 to 34 years: 33 percent
• 55 to 59 years: 24 percent

Return to 1998 Salary & Opinion Survey