Market Value of Engineering

We mentioned that there is a lack of information and communication on the low market value of Civil Engineering design work. Without going after the background, reasons and solutions, in this post we simply want to describe the problem in detail. The rest will be captured in following posts.

It seems that actually doing the calculations, modelling, analysis, design, problem solving and drawing production has very little market value. It is often done by interns and fresh graduates. The managers trying to spend as little project budget as possible in order to make the project more profitable. These calculations and drawings later are checked by a more experienced engineer, who has been doing the previously mentioned design job for a few years. This “senior” understands the design principles and risks in further depth and gained sufficient knowledge of design standards and some practical (buildability, constructability and value engineering) experience as well. Thus a credible person to defend and explain the design to the client and she/he is still very affordable, the project budget can be well controlled. Finally the finished product, the design drawings are reviewed by the Engineer who signs and takes the responsibility. That’s it. From all three participants the last one, the Engineer may claim a slightly higher salary, because of the liability involved, and his signature is required by law. But let’s not mystify this, we are not talking about huge difference in remuneration. About 10%-30% more than a well established senior engineer who produced the drawing, but didn’t sign. It is relatively easy to find a registered engineer who signs these drawing as his own (after reviewing of course) just out of personal financial necessity.

Delegating the design job, the technical checking as well as single and multidisciplinary coordination to the lowest possible level seems to be the trend that engineering firms follow. It is possible to keep these jobs at the pay scale of entry level positions (almost, annual 3-5% increment if the business allows and we talk about well performing staff, no pay rise if the business is bad). There is an abundance of fresh starters, eager to get some practical experience. So these people need to be technically trained enough, so an acceptable level of design quality can be maintained. Some form of technical training must be provided, and firms usually insist on engineering registration or  institution membership, this way ensuring the level of technical and commercial knowledge. However it seems to be bad business to make operation level, working level civil engineers financially successful. Increasing their salary proportionately with knowledge and experience would be too expensive. Or in other words: it makes financial sense for the individual projects to choose someone cheaper, because it is easy to find cheaper workforce again and again and let go of experienced engineers when they became too “experienced” i.e. expensive. So this project budgeting and resource planning trend seems to prove as well, that “classical” engineering work is not worth much after a specific level. Well, if this specific level is high or low, that’s debatable. We think it is low, it is lower than than same years of experience, effort and level of provided services earns professionals in finance or commercial sectors. (See post Competitive Industry, Uncompetitive Salaries)

So engineers who are unhappy with their remuneration, and realize the above phenomenon, usually have two alternatives. Either they change companies (usually for 10%-20% increase in salary) or become project managers/project controllers or start working in business development of commercial management at their current company. Which means they only do technical work at about 10% of their time and spend 90% time on things that is worth more to their employers: project finances, project management, client facing and winning new jobs. Also delegating to the lowest possible level, if you are a manager “spend time on the things that only you can do”goes the famous saying. (Last time I read it was in the The Structural Engineer, October 2016, IstructeE magazine: Don’t be an accidental manager. Good read, some tips about how to become good managers. About don’t retreat into the “technical comfort zone”, if you are a manager. Do management.) Which translates to me: your time is money, you are worth more now, don’t spend time on engineering that can be done cheaply.

I wish professors, senior colleagues and professional societies would clearly communicate this future engineers early in their studies/careers.

In short it seems to me that doing project management, finances and commercial management worth much more even at companies providing civil engineering services. Simply because the actual product, civil engineering design, can be acquired at low lost, by delegating down and always finding the cheapest engineers a company can hire, but still capable of doing the job (maybe low quality but that risk can be managed). While project managers, financial and commercial consultants are making a difference, engineers don’t. At least that’s what this trend tells me. Civil engineering consultancies are not looking for the cheapest financial consultant or commercial manager they can find. It is worth paying for their services, it is good business. They know too much, they add value. But there are too many Civil Engineers who can do the design job. (Maybe not fantastic quality, but can get the job done eventually. Furthermore, many cases it is possible to hire an experienced even registered engineer who will provide good quality for cheap, just because needs some income and for hope of further, better paying assignments.)

If one works for a prime multinational consultancy, there is always talks about the “Technical” Route of career development, when one becomes a technical expert. Well, even these companies admit, that on that route is much difficult to succeed and become an accomplished professional than the “Project Management” or “Business Development” Route. At every large international company there are technical experts, who are nationwide or internationally regarded as one of the bests. These engineers are fantastic, ingenious, I had the luck to work with a few in person. One learns so much from them, from their 20-30 years of experience on great international projects. They are lecturers (some of them guest lecturers at colleges, but some of them are established academics), team leaders and innovators. We are talking about rare breed of engineers here. And also, they do earn well, after about 25 years of experience they might do as well as a quite talented financial professional, manager accountant or IT project manager with 8-10 years experience. Or their colleagues who picked the “Project Management” route and worked their way up to project director in 12-15 years. I think this discrepancy in time spent matters. The fact that this is the top of the career for our Engineering Technical Expert, while the project director still has 10 more years to go, that salary won’t stagnate there.

We hope we prove the point here. However, some of us, prefer to do engineering. We don’t want to distance ourselves from the technical fields and slowly but surely become managers just so our careers can progress. We are eager to become better and better in providing solutions and technical services, we don’t mind managing clients, leading teams and handling our own budget, but could this be 60% technical work, 40% management? That is why we studied Engineering and not Economics for 4-5 years. We prefer to be the guy who designed or built the bridge, not the one who used some engineers and delegated the design work. Also, we don’t really like that Civil Engineering Resources (basically the engineers salaries) are the cheap part of the project, and surely it is manageable for a lower cost. So we are looking into solving this. Unlikely that we can change the supply and demand correlations in business. But we might be able to improve the quality of some aspects of engineering and maybe there will be demand for that. Maybe we could save time, cost, manhours. The above is solely problem description. The rest will yet to come.