What's In Your Paycheck? | Raises continue to outpace inflation, bringing average pay to $106,271—but engineers aren't happy with their compensation packages, according to the 2008 Electronic Design Salary Survey.

In this issue, the editors of Electronic Design once again present the results of our annual salary and opinion survey. Nearly 3000 of you answered our wide-ranging questions and shared your insights. Based on that research, this report provides a clear perspective on how you and your colleagues are doing and where salaries are headed.

As in our previous surveys, we took a close look at how compensation (salaries, bonuses, and benefits) varies across several parameters—including company size and type, job functions and titles, geographic region, and engineering experience, as well as age, gender, and level of education.

This year we also included questions about retirement planning—the age at which you plan to retire, how those plans may have changed, how you plan to spend your retirement years, the likelihood of accepting another engineering job out of retirement, your experience with financial advisors in planning for retirement, your retirement sources of income, and your retirement savings goals.

And with the presidential campaigns in full swing, we wanted to know your views about the upcoming election, which party best represents the engineering community, and your views on the most critical issues facing the country today.

SALARY ISSUES
The average U.S. engineer now makes $106,271 in salary and bonuses. Salaries in 2008 edged up 3.6%, while bonuses were up 2.8% and stock option compensation grew 4.4%. Engineers expected their total compensation (base salary, bonuses, stock options, and other income sources) to grow 2.6% this year, but average increases across the industry came in at 3.6%.

But the wealth isn’t being spread around equally. According to our 2008 survey, barely 64% of engineering professionals saw an increase in their paychecks this year, while 26% saw their compensation remain the same. Only 60% of engineers feel adequately compensated for the work they do—down slightly from last year—and just 56% believe their pay package is equal to or more competitive than what’s being offered by other employers (again down slightly from a year ago).

Still, better than four out of five engineers are willing to promote their chosen profession to students considering an engineering career. “Aside from the intrinsic reward of exercising one’s intellect, our country requires our young people to be competitive in terms of education and ability in the global market,” commented one engineer. “I feel that this is the last area of economic dominance the U.S. maintains and that it is vital for us to preserve it.” Another engineer put it this way: “Design is rewarding, the salary is decent, and it’s one of only a handful of university programs that lead to a ‘real job.’”

2008 increases in specific job categories fared better, particularly for those in management positions. Executives that typically take part in our annual surveys usually range from heads of large corporations to owners of small engineering firms. On average, tech executives saw the biggest bump in income this year, pulling down $134,771 in 2008—or 7.4% more than in 2007. Engineering managers saw their pay stubs grow 2.1% in 2008 and now bring in $127,315 annually. Engineers involved in design and development average $102,376 in annual income, up 1.2% from a year ago.

Semiconductor houses lead all electronics industries in compensating engineers (averaging $131,859), followed by computer manufacturers ($121,319), medical electronics firms ($118,802), software firms ($110,826), communications systems manufacturers ($109,981), avionics companies ($109,814), automotive electronics companies ($107,594), and test & measurement organizations ($106,377).

Nearly half of our readers said that a headhunter or recruiter had contacted them at some point during the past 12 months. So it was surprising to learn that only 33% of survey respondents said they believe their company is more focused on employee retention this year—down from about 40% two years ago. “Companies are treating engineers like furniture—totally replaceable and cheaper from abroad,” mentioned one engineer. “They continue to demand extra time for free since you are an at-will employee and are replaceable.”

Two factors that are inextricably linked to higher wages are company size and geographic region. As we’ve seen in our previous surveys, larger companies tend to dish out bigger salaries, bonuses, and raises. They’re also more generous when it comes to non-cash rewards and benefits such as stock options, 401(k) plans, pensions, patent awards, continuing education opportunities, and health coverage.

According to the survey, geographic location, not surprisingly, also plays a big role in income levels, For instance, locations around Silicon Valley, the Pacific Northwest, and Boston saw higher salary increases in 2008 than others. As a group, the Pacific states (California, Washington, Oregon, Alaska, and Hawaii) retained the top spot as the best place for engineers to earn a living by averaging $124,757.

In the Mountain states (Arizona, Colorado, Montana, New Mexico, Nevada, Idaho, Utah, and Wyoming), incomes averaged $111,923. Following closely were the West South Central states (Arkansas, Louisiana, Oklahoma and Texas) at $110,604 and New England (Massachusetts, Connecticut, Maine, New Hampshire, Vermont, and Rhode Island), where totals averaged $109,524.

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