It should come as no surprise that in regions where the cost of living is high, paychecks are higher too. Areas around California and Massachusetts - traditional technology breeding grounds - continue to attract more jobs and higher pay. This year, the Pacific states (California, Washington, Oregon, Alaska, and Hawaii) regained the top spot as the best place for engineers to earn a living by averaging $115,324 and edging out the New England states (Massachusetts, Connecticut, Maine, New Hampshire, Vermont, and Rhode Island), where total incomes averaged $108,200.
Next up this year were engineers in the Mountain states (Arizona, Colorado, Montana, New Mexico, Nevada, Idaho, Utah, and Wyoming), where incomes averaged $108,019. Following these states are West South Central states (Arkansas, Louisiana, Oklahoma, and Texas), who saw their total compensation dip slightly to $102,476 after seeing the greatest percentage increase in their paychecks in 2006. Mid- Atlantic states (New York, New Jersey, Pennsylvania, Delaware, and Maryland) averaged $100,193. Their colleagues in the South Atlantic states (Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia, and Washington, D.C.) were next on the list, averaging $99,642.
Trailing the field were engineers in the East South Central states (Alabama, Kentucky, Mississippi, and Tennessee) at $96,878 and the East North Central states (Indiana, Illinois, Michigan, Ohio, and Wisconsin), where total earnings averaged $93,346. Pulling up the rear in 2007 were engineers in the West North Central states (Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas) with an average income of $90,297. On the upside, however, this figure represents a healthy 11% increase over last year's percentage.
As in past years, engineers who design chips for a living took home the most pay in 2007, averaging a whopping $132,135 in total compensation - including an industry-leading base salary of $120,095, plus $5500 in bonus money and $6540 in stock options and other incentives. Rounding out the top five wage earners were military systems designers ($111,034), communications systems designers ($109,880), medical device designers ($107,386), and avionics systems designers ($104,519).
The Intangibles
As one might expect, more engineering experience usually translates into higher pay. The older you are, the more you make (at least until you reach the age of 55, when salaries begin to drop off a bit). And if you want to earn more than the average engineer, it pays to go back to school and add some graduate courses to your bachelor's degree.
One reader put it this way: "A greater amount of technical know-how will be required in the future due to the strong technical components of modern society. Those that don't have these skills will be left behind. In order to compete in the global marketplace, I believe engineers will be required to have a master's degree. The bachelor's is to hammer home engineering fundamentals, and the master's is used to apply those fundamentals to specific problems - things like improved robotics, artificial intelligence, alternative energy technologies, and bio-engineering."
Engineering continues to be significantly less financially rewarding for women than for men, despite the fact that men and women hold similar jobs and have similar education. Male engineers currently average $94,103 in base salary and $9014 in bonuses and other income for a total compensation of $103,117. Women, by comparison, average just $76,814 in base salary and $8490 in bonus and other income totaling $85,304 - a difference of more than 17%. While past surveys showed the salary gap narrowing year over year, that wasn't the case this year.
The time demands that have been so prevalent in the engineering professions seem to have finally peaked. In 2007, engineers are putting in about 53 hours a week - about an hour less than a year ago. But like in the past, engineers who work longer hours also usually find themselves bringing home bigger paychecks at the end of the week
As salaries grow, employers appear to be tying additional rewards to the performance of the company or division, rather than to personal performance. And they're finally delivering more on the indirect and non-cash rewards that engineers value most, like 401(k) matching, health benefits, tuition reimbursement, pension plans, and personal time off.
"My company's benefit package is very good and they absorb a significant portion of the health insurance costs, although my contribution level has increased over the years," added one engineer. But not everyone is feeling the love from their companies.
"The work environment has become very impersonal and mundane," stated another reader. "Everything is e-mail, teleconferences, and 'net meetings. We used to travel to meet with our teams and it was fun. We used to have jelly doughnut meetings, but now mostly meetings are sans coffee and doughnuts. On the compensation side the pay is good, but the benefits have been degraded significantly. Medical coverage is mediocre at best and pensions are a thing of the past. I think someone with talent to be an engineer could do better in another field or running their own business."
The number of engineers receiving health benefits from their employers increased from 62% to 67% in 2007. But the fact that salary increases are being overshadowed by rising healthcare costs continues to be a common grievance among engineers. "I am shouldering more of the cost of benefits as the company's income grows," complained one engineer. "There are many factors affecting the company's bottom line, but they are still providing better benefits (at my career point) than other comparable companies. Once the education demands level out, other compensation will become more important."
In exchange for better pension and healthcare benefits, companies have started to cut back on areas where they don't see some immediate or long-term benefit, like car allowances, company phones, and association dues, as well as on stock options and stock purchase plans.
"Health insurance deductions and copays seem to go up a little faster than inflation each year," said one engineer. "The company has developed a more concise plan to measure personal performance and at the same time has segregated the annual bonus into two parts - one part for company performance and one part for personal performance."
Clearly, money is what matters most to employees of the industry. And after several years of lukewarm pay increases, engineers are eager for more scratch. The number-one reason engineers give for considering another job, cited by 69%, is higher pay. Sure, other things matter, like more interesting work, personal fulfillment, and greater stability. But taking all of the factors into consideration, companies would be smart to make sure that their A-list engineers are being taken care of and compensated (at least) in line with market norms.
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