Calmer Waters?

KEY WORDS Control engineering Control engineers Salaries Education Capital spending Sidebars: Major Mergers Objectives and Methodology ONLINE

Geology dictates that even the fastest whitewater river must slow down occasionally. Rafters, kayakers and canoeists reach stretches of deeper, slower moving water, and have a chance to briefly catch their breath before the next gut-wrenching plunge.

These windows of relative calm are similar to the economic pause apparently being experienced by the 1,376 control and automation engineers and other technical professional who responded to Control Engineering ‘s “North American Reader and Salary Survey, March 2003.” In general, these professionals report they’re:

• Earning several thousand dollars more than three years ago;

• Undergoing fewer recent mergers and acquisitions;

• Continuing to experience fluctuating and expanding on-the-job responsibilities due to ongoing technological advances, organizational changes and layoffs; and

• Growing more concerned with job security, money and other bottom-line factors, much like their employers; and becoming less motivated by technical challenges and other less economically focused intangibles.

More money, smaller increase

The 2003 survey’s respondents report their average salary increased since 2000, but by a smaller amount than during 1997-2000.

Their average salary in 2003 is $77,569, which is up 8.5% or $6,059 more than in 2000. This translates to an average annual increase of 2.7%.

Average salary in 2000 was $71,510, which was up 11.7% or $7,510 more than in 1997. This represented a 3.8% average annual increase over 1997’s average salary of $64,000.

These increases roughly parallel U.S. inflation in recent years, though they remain less than cost-of-living increases in many areas.

More than half of the 2003 respondents report gross incomes between $50,000 and $79,000, mirroring the proportion of engineers in that salary range in 2000. However, the main difference is that 15% of respondents expect to earn $100,000 or more in 2003, while only 11% were at this level in 2000, and only 9.6% reached it in 1997.

Also, while less than half (47%) of 2003’s respondents receive some part of their compensation as bonuses or commissions, that figure represents a slight increase over the 43% being paid this way in 2000.

Fewer mergers, stronger views

Beyond their relatively steady salaries, the respondents seem to be experiencing slightly calmer economic times because only 30% in 2003 report having been through a major merger or acquisition in the past three years, while more than 97% in 2000 had been involved in a recent merger. This steep decline in mergers could point to less upheaval, but it could also indicate that most of the potential acquisitions have occurred, and that there are simply fewer prospects left.

“Fewer mergers and acquisitions may be a sign that financial manipulations for short-term gain are becoming less popular, especially because of increased auditing and regulatory oversight, and that people are more cautious about putting money on the table in this tenuous economic environment,” says Win Phillips, past president of the American Society of Mechanical Engineers (ASME, New York, NY) and research vp at the University of Florida (Gainesville, FL). “This trend may be helpful to engineers and give them some additional security for awhile because a merger or acquisition is usually Step 1 leading to layoffs.

“The engineering workforce has been pretty stressed in what it can take recently, and more of the same may simply reduce overall productivity. I think this is being recognized by many companies, and that staff reductions are slowing, though some will always continue.”

However, even though mergers have dropped by two thirds, the 2003 respondents’ opinions about those that have happened are polarizing. For example, 19% of the 407 respondents in 2003 that had been through a merger agreed strongly that it had been handled well, while 13% disagreed strongly. Both of these opinions increased over the 17.6% of the 240 respondents in 2000 that agreed strongly and the 9.2% that disagreed strongly.

More strikingly, respondents agreeing strongly that enough thought was given to integrating people, jobs, teams and cultures during their mergers almost doubled to 20% in 2003, up from 11.4% in 2000. Meanwhile, those disagreeing strongly that enough thought was given also increased to 15% in 2003 from 10.6% in 2000.

Likewise, those that agree strongly that their merger was primarily bottom-line focused shot up to 45% in 2003 from 32.9% in 2000, and those that disagree strongly also jumped to 7% in 2003 from 3.8% in 2000.

Shifting priorities

Despite the overall, macroeconomic calm, the 2003 respondents report several major shifts in their individual, microeconomic attitudes from 2000 when asked about the most important factors contributing to satisfaction with their present jobs.

“Salary” (49%) was the most important factor for satisfaction in 2003, while “technical challenge” (4%) was tied for least important. This was a huge switch from 2000, when respondents reported that technical challenge (48%) was the single most important aspect of their jobs, and “money” came in fourth (27.3%).

On a more positive note, “feeling of accomplishment” was cited as almost equally important in both surveys, reaching 42% in 2003 and 42.7% in 2000. Similarly, when asked to rate their overall job satisfaction, the 2003 respondent said they are either very satisfied (33%) or somewhat satisfied (48%).

When asked about their biggest concerns, the 2003 respondents added that “job security” was most important (62%), up from 32.8% in 2000, while “keeping current on technology” dropped to 15% in 2003 from 51.1% in 2000. This rapidly shifting focus to job security also deflated concerns about management support to 1% in 2003 from 40.7% in 2000, while worry about mergers or acquisitions declined to 7% in 2003 from 17.1% in 2000.

In addition, when questioned about benefits besides pay, the 2003 respondents voted “health insurance” (82%) as by far the most popular benefit, with flexible work hours (9%) coming in a distant second.

Expanding responsibilities

Besides changes in pay and perspective, engineers and technical professionals completing the 2003 survey also identify several alterations in their primary job functions. The most significant is an almost doubling of those who perform “control and/or instrument engineering” tasks to 22% in 2003 from 13.5% in 2000. Likewise, respondents identifying themselves as “system integrator, consultant” more than doubled to 7% in 2003 from 2.8% in 2000. Also, “system design engineering” increased to 13% in 2003 from 11.4% in 2000.

“We’re noticing more demand for control engineers in specific applications in the auto industry, which needs assistance with increasingly complex vehicle electronics and emissions issues,” says Tariq Samad, corporate fellow at Honeywell (Minneapolis, MN) and editor-in-chief of Control Systems, the academic journal of the Institute of Electrical and Electronics Engineers’ (IEEE, New York, NY). “We had seen increased demand for control engineers in the disc drive industry that supplies the PC industry, but that trend appears to have slowed for now.”

The 2003 survey’s increased responses from control engineers seem to parallel a reduction in participants from other job function sectors, such as “product design engineering,” which dropped to 11% in 2003 from 16.8% in 2000. Similarly, “production engineering,” decreased to 10% in 2003 from 14.9% in 2000; “operations and maintenance,” declined to 8% in 2003 from 10.8% in 2000; and “general corporate or management,” shrank to 5% in 2003 from 9.1% in 2000.

“Everyone is still being asked to do more with less, and so they’re looking more closely at what resources they have left. Engineers are often increasing output by performing a greater variety of tasks, while project teams that used to have five members or more may now have three,” says Eric Starkloff, platform manager for PXI and modular instruments at National Instruments (NI, Austin, TX). “This is fueling the development of software tools and other devices that can save on labor and still enhance productivity.”

Ongoing training

“As part of their participation in lean manufacturing and cost-lowering initiatives, employers are also trying to improve their ‘on-time to want’ ratios. This may be fueling some pay increases because manufacturers must retain staff that can respond to their more dynamic schedules,” says Pat Babbington, Rockwell Automation’s (Milwaukee, WI) customer support and maintenance vp. “However, this also means that engineering and plant-floor staffs are being asked to be more flexible, and learn to perform a greater variety of tasks. For example, many may train on three or four or more machines or processes, and this requires more-skilled, better-trained employees.

“Training also improves morale because users are better able to define their activities, rather than basing their actions on opinions.”

Besides helping them perform new jobs, engineers and technical staff must participate in ongoing training to prevent their skills from becoming simple commodities, and to make sure they fit into their company’s overall business goals, according to ASME’s Mr. Phillips. “Engineers must ask themselves: ‘What will my job be like tomorrow? Can I do it? Can I retool myself to what will be needed here?'”

Companies’ sales, spending

Though much of the 2003 salary and reader survey focuses on personal/personnel issues, respondents also report that their companies are involved in numerous industries, including machinery and equipment manufacturing (16%); miscellaneous manufacturing (13%); raw material processing (12%); instrumentation and control equipment manufacturing (10%); construction engineering (9%); system integration (7%); automotive or transportation equipment (6%); utility services (4%); aircraft or other ordnance (3%); research and development (2%); and several others. Meanwhile, respondents in 2000 indicated that 28.3% were involved in raw materials processing and 22.1% were machinery and equipment manufacturers.

Annual sales for firms employing 2003’s respondents range widely from $1 million and less to $1 billion and more, but are evenly distributed in mostly single-digit percentages among the survey’s segments divided by dollar figures. Twenty-five percent of respondents work for companies with sales of $1 billion or more, while 12% have $10 million to $24.9 million in sales, and 10% have sales of $1 million to $4.9 million.

To help generate this revenue, these companies spend less than $30,000 to more than $3 million on instrumentation, controls and automation products, services, replacement equipment and repairs in a typical year.

The 2003 respondents report an average of 22% of their firms’ expenditures in these areas go to services. They add that 67% of their companies use system integrators and/or consultants on automation projects.

Compared to their companies’ total control system spending for 2002, the respondents project that expenditures for the next two years will: increase (24%), remain about the same (46%), decrease (12%), or remain uncertain (18%).

Internet rules

To secure the useful information they need to survive professionally and help their companies succeed, 2003’s respondents rely on numerous sources. However, they report that the Internet has overtaken all other outlets to become the single most important data source for engineers and technical professionals. These most-used information sources include: Internet (83%); trade magazine articles (77%); trade magazine advertising (71%); sales visits (56%), specific web sites (51%); trade shows (47%); CD-ROM or software demos, (47%); e-mail (44%); seminars (41%); and others.

Though the Internet jumped into first place now from 71% in 2000 and 35% in 1997, respondents using other information sources actually declined only slightly. In fact, trade magazine articles decreased only 1.2 percentage points to 77% in 2003 from 78% in 2000. Meanwhile, use of sales visits actually increased slightly to 56% in 2003 from 55% in 2000.

Finally, the 2003 survey found that readers use Control Engineering ‘s web site at www.controleng.com to read and learn about: new products (55%); online extras, which supplement print (29%); media information (29%); web exclusive articles (28%); regular magazine articles (22%); trade show and events (15%); Buyer’s Guide directory (13%); daily news (10%); web-based editions of e-mailed newsletters (8%); and Automation Integrator Guide directory (6%).

In reference to Control Engineering ‘s print issues, 2003’s respondents report that 83% read every issue or most issues, which is way up from 70% in 2000. They add that 22% have received it for less than two years; 39% have read it for two to five years; and another 39% have read it for six years or more, a significant increase over the 29% in 2000 that had read it for six or more years.

Hopefully, a little breathing space, refocused job functions, some useful training, and a few thoughtful information resources, whether electronic or print, will help when the next stretch of whitewater rapids begins.

Primary Job Functions and Average Salaries in 2003

(1,370 responses in 2003; 683 in 2000)	Average salary	Function of % of respondents	Function of % of respondents
		2000	2003
General or corporate management	$107,045	9%	5%
Basic research	$86,500	1%	NA
Sales, marketing	$83,250	NA	4%
System design engineering, including applied R&D	$80,407	11%	13%
Other	$79,919	NA	2%
IT/information systems	$79,688	1%	1%
System integrator/consultant	$79,031	3%	7%
Control and/or instrument engineering	$78,201	14%	22%
Production engineering, process or manufacturing	$74,912	15%	10%
Product design engineering, including applied R&D	$73,525	17%	11%
Other engineering, including project, software, plant, electrical and/or electronic	$72,853	12%	12%
Operations and maintenance	$69,825	11%	8%
Evaluation, quality control, standards,	$68,618	4%	3%

Control Engineering’s Typical Reader
The average reader remains overwhelmingly male (98%), white (88%), slightly better paid, highly educated and experienced, has a year less time with his present employer, and supervises close to the equivalent of one additional person.

	1997	2000	2003
Age	47	46.2	47.1
Degree	Electrical engineering	Electrical engineering	Electrical engineering
Annual salary	$64,000	$71,510	$77,569
Typical week	NA	47 hours	47 hours
Total work experience	23 years	21 years	21.5 years
Present tenure	9 years	12.6 years	11.6 years
Direct reports	5 staffers	9.4 staffers	10.1 staffers

Work Experience
(1,368 responses in 2003 averaging 21.5 years experience; 681 responses in 2000 averaging 21 years experience

	1997	2000	2003
5 years or less	6.1%	7.6%	5.0%
6 to10 years	7.8%	10.9%	9.0%
11 to15 years	11.3%	12.9%	15.0%
16 to 20 years	16.9%	15.6%	14.0%
21 to 25 years	15.6%	18.4%	21.0%
26 to 30 years	16.5%	13.5%	18.0%
31 years or more	26.0%	21.1%	20.0%

Major Mergers

(1,365 respondents to Control Engineering’s North American Reader and Salary Survey March 2003, reported on their personal merger experiences. 240 responded in June 2000

Have you and/or your organization been through a major merger or acquisition in the past three years?

(Opinions of the 407 respondents in 2003 and 240 respondents in 2000 that had been throug a merger in the past three years)

Was your merger handled well?
	2000	2003
Agree strongly	18%	19%
Agree somewhat	36%	33%
Neither agree nor disagree	21%	20%
Disagree somewhat	16%	14%
Disagree strongly	9%	13%
Was enough thought given to integrating people, jobs, teams and cultures?
	2000	2003
Agree strongly	11%	20%
Agree somewhat	33%	24%
Neither agree nor disagree	26%	22%
Disagree somewhat	19%	18%
Disagree strongly	11%	15%
Was your merger primarily bottom line focused?
	2000	2003
Agree strongly	33%	45%
Agree somewhat	32%	21%
Neither agree nor disagree	25%	18%
Disagree somewhat	6%	8%
Disagree strongly	4%	7%

Objectives and Methodology

The objective of Control Engineering’s “North American Reader and Salary Survey, March 2003,” was to investigate readers’ compensation, education, and work experiences; evaluate their employers’ technology investments and capital expenditures; learn readers’ information requirements; and evaluate their reading habits.

To achieve these aims, Control Engineering successfully delivered e-mails to 35,458 qualified subscribers on March 10. The e-mails asked recipients to click on and link to a closed area at Control Engineering’s exclusive job service provider at www.controleng.com/jobs, AutomationTechies, and complete a 44-question survey. The survey closed on March 21 with 1,376 responses for a rate of 3.8%. Compilation and analysis of the resulting data was performed by Mark Hoske, Control Engineering’s editor-in-chief.

ONLINE

More results from Control Engineering’s “North American Reader and Salary Survey, March 2003,” to come.

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