Last year an executive at a national civil engineering firm was overheard saying that staff who held the company “hostage” by demanding high salaries and outrageous benefits were now getting a cold reality. They would either accept pay and benefit cuts or would be welcome to leave. After all, they could be replaced by other talented civil engineers who would be happy to have a job. This executive thought the company had been strong armed into high salaries and comprehensive benefits in a demanding marketplace. Additionally, he decided that many employees showed no loyalty to the company during good times. Staff threatened to leave for opportunities and remained when they received counteroffers. Now, he felt that “what goes around, comes around.” Engineering businesses are known as professional services firms. They are only as good as the talent they have on their teams…and the amount of projects in the marketplace.
Salaries respond to market conditions. Clients are driving the lack of return to normal as the supply of work remains low. When engineering consultants are busy, clients are willing to pay higher fees to secure the firm they want planning, designing and constructing their projects. Likewise, when firms are looking for projects to keep their staff employed, salaries are lower as are winning bids.
Salaries are also reflected by the great purge of 55 – 65 year old staff. As politically incorrect as this is to discuss, this economy has allowed firms to let go of senior civil engineers who are technologically deficient in deference to hiring younger professionals who are more marketable. These younger staff are LEED accredited, BIM proficient, command lower salaries which means lower bill out rates and potentially more winning bids. It is more economical to have a senior civil engineer oversee as a QA/QC manager, while junior and mid level engineers produce the work. The job market is now flooded not only with 2009 and 2010 graduates, but also with 35-45 year experienced engineers. Although I understand the thought process behind keeping salaries low in a competitive market for project wins, my previous blog comments in “Never Underestimate the Gray Haired Engineer” holds true. (A future BLOG will discuss the ramifications of removing senior engineers to save dollars).
Firms need to remain competitive to win work. While most will agree that civil engineering salaries had finally reached the level of their high tech counterparts, the economy could not sustain them. Infrastructure needs, natural and man made disasters will force work to our marketplace. But, the economy and clients (both governmental and private) will dictate industry salaries.