Why Engineers Are Poorly Paid Professionals
Specialized skills that can be narrowly applied…
If you could give a new college student only one piece of advice on where to major to make a good living working for a progressive company, what would it be? My advice would be to pick a profession that confers specialized skills that can be applied broadly. Think accounting, finance, law, consulting, and medicine. These professions allow you to easily hop between companies or firms and start contributing from day one. It gives these employers incentives to create a good work environment, offer good benefits, and provide good yearly raises.
Most engineering creates specialized skills that can be applied narrowly. While a new college engineering graduate may have broad skills, an engineer with 5 years experience has very narrow skills that tend be applicable at the company they work for. You are not specialized in “electrical engineering” anymore, but are now specialized in antenna design for cell phones working on a specific network.
This creates microeconomic incentives for each company to minimize the salary increases for engineers. They know that engineers cannot just hop to a new company easily. Their may be other opportunities for cell phone antenna design, but they might be in a different state and would require moving. Their may be other opportunities for a different type of antenna design locally, but it would probably take 6 months for the engineer to get up to speed on the new technology, tools, and processes at this new company.
The one major exception to this rule for engineering salaries appears to be with software engineering, particularly in areas with very low unemployment like Silicon Valley. However, one could argue that the point of this article does not apply as software engineers can have specific skills that can be applied broadly on day one.
So what are the effects of this problem?
- People get out of engineering. Ask a typical engineer at a typical company how to make more money. He will tell you it is to get out of engineering, and go into sales, management, product management, or any number of fields. It is rare you see talented engineers with years of experience. Companies need to constantly be training new engineers to fill in the gaps.
- People just do not go into engineering. Most people will agree that an engineering degree is a great path to making a lot of money as long as you do not go into engineering. Law (with a JD), consulting, or even finance (with MBA’s) have great opportunities for people with engineering degrees.
Companies need to understand what they are doing at a microeconomic level has a macroeconomic effect. The fact they are struggling to find good engineers is caused by the entire industry not paying engineers well enough to keep them in engineering.
