Change: The New Normal

It's often said, though first by Russian novelist Fyodor Dostoevsky, that people can get used to anything. Control and automation engineers and other technical professionals are no exception, despite their conservative, if-it-ain't-broke-don't-fix-it reputation. The recent economic turnaround and their own maturing survival instinct may be why the 1,846 respondents to Control Engineering's "Nor...

05/01/2005


Sidebars:
Objectives and methodology

It's often said, though first by Russian novelist Fyodor Dostoevsky, that people can get used to anything. Control and automation engineers and other technical professionals are no exception, despite their conservative, if-it-ain't-broke-don't-fix-it reputation.

Discrete Control, Information Control, Process Control, System Integration

The recent economic turnaround and their own maturing survival instinct may be why the 1,846 respondents to Control Engineering 's 'North American Reader and Salary Survey, December 2004,' indicate that 31% fewer of them are worried about job security, even though they're being paid only a tiny bit more, and close to a third have still experienced a major merger or acquisition in the past three years. Specifically, these subscribers report:

  • 72% expect their companies to spend as much or more on automation and controls in 2005, than the year before.

  • 33% listed job security as their biggest concern in their present jobs in the most recent survey, while 62% said job security was a major concern in the March 2003 survey. Meanwhile, 6% of the most recent survey's respondents listed outsourcing as one of their biggest concerns;

  • Earned an average of only $443 more per year in 2004, even though they had the same experience, were the same age, and worked the same hours per week as those responding in 2002-03. They also supervised about six fewer people and averaged four years less time in their present job, than those responding in 2002-03;

  • 28% in 2004 say they've undergone a major merger or acquisition in the past three years, while 30% in 2003 experienced a merger in the previous three years. Respondents' opinions about how well or poorly their mergers were handled were far less polarized in this survey than those responding 20 months before, in early 2003.

  • They're focusing more on keeping current on new technologies, securing management support, and seeking sufficient operating budgets.

Little more pay, fewer reports

Respondents to the December 2004 survey reported only 0.5% higher annual salaries, $78,012 on average, compared to $77,569 on average in 2003. Pay among respondents had increased in the past three surveys: by more than 8% or $6,059 from $71,510 in 2000; and by almost 12% or $7,510 from $64,000 in 1997. Though less than cost-of-living increases in many U.S. regions, these previous salary increases roughly paralleled U.S. inflation rates.

Almost half of December 2004's respondents report gross incomes between $50,000 and $80,000 per year, which was slightly fewer than those in this bracket in 2003. Meanwhile, 37% of 2004's respondents earn $80,000 to $125,000, which was slightly more than the 34% in this group in 2003.

Also, less than half (47%) of 2004's respondents receive some compensation as bonuses or commissions, which was the same level reported in 2003, and slightly higher than the 43% being paid extra in 2000.

Continuing mergers, acceptance

Discrete Control, Information Control, Process Control, System Integration
Have you and/or your organization been through a major merger of acquisition in the past three years?

Recent respondents faced a level of mergers and acquisitions that seems to have leveled off in the past couple of years. In fact, 28% reported that they'd been through a major merger or acquisition in the past three years, which was down only slightly from the 30% who'd been through such an event in the three years prior to 2003.

Though mergers remained relatively constant, opinions about them grew more homogenous and apparently nonchalant in December 2004 than in March 2003. For example, when asked if their mergers were handled well, respondents who disagreed somewhat increased to 23% in 2004 from 14% in 2003, while those who disagreed strongly dropped to 2% from 13%, and those who agreed somewhat increased to 42% from 33%, while those who strongly agreed dropped to 9% from 19%.

Likewise, when asked if enough thought was given to integrating people, jobs, teams, and cultures, respondents who disagreed somewhat increased to 29% in 2004 from 18% in 2003, while those who disagreed strongly decreased to 5% from 15%, and those who agreed somewhat increased to 35% from 24%, while those who agreed strongly dropped to 5% from 20%.

Meanwhile, when asked if they though their merger was mostly bottom-line focused, those who agreed somewhat increase to 41% in 2004 from 21% in 2003.

'It's true that engineers may simply be getting used to the continuous merger activity, but the U.S. is always a nation in flux. World market dominance may not be ours as much as it was in the past, but the same people and attitude that built that dominance are still there,' says Win Phillips, past president of the American Society of Mechanical Engineers (ASME) and research VP at the University of Florida-Gainesville. 'As a result, we can adapt to the new scenario of shared international markets with India, China, the European Union, and others. This means there will be job shifts, but not all jobs will go to these areas, and so people need to be prepared to do something different.'

Shifting needs—consistently

Discrete Control, Information Control, Process Control, System Integration

Why is it that, even though mergers are continuing and salaries are stagnant, respondents to the December 2004 survey appear less worried about job security? One word: consistency. Just as engineers often value smooth-running systems with older equipment over the latest technology that's probably more erratic, they also seem to prefer this type of consistency in their careers.

For example, when asked what were the most important factors contributing to job satisfaction, the 2004 respondents listed 'feeling of accomplishment' as most important at 47%, while 'salary' came in second at 43%. This was opposite the results in March 2003, when salary was first (49%) and accomplishment was second (42%), but results for 2004 were closer to 2000, when technical challenge and accomplishment were the leaders.

Likewise, satisfaction generated by 'job security' dropped to 19% in 2004 from 34% in 2003, while 'technical challenge' shot up to 43% in 2004 from 4% in 2003. Also, 'advancement opportunities' jumped to 21% in 2004 from 4% in 2003, while 'good relationship with colleagues' increased to 19% in 2004 from 11% in 2003.

'Change is continuing to accelerate worldwide, and it can be very difficult for many people and organizations to handle,' says Mark Finger, VP of human resources at National Instruments' (NI). 'We're aware that many companies live from fiscal quarter to quarter, but if their leadership can look at a more distant horizon, then it can help reduce knee-jerk reactions to what's happening this quarter. Doing this can also develop loyalty because people gain strength and trust in a company when they see it making long-term decisions and investments. This is simply good business because if a firm has its employees' hearts, then its chances for success are far greater.'

While also less worried about job security when quizzed about their biggest concerns, the 2004 respondents reported that 'keeping current on technology' was most important (25%), while it was less crucial (15%) in 2003. Also, the need for 'management support' jumped to 16% in 2004 from 1% in 2003, while securing 'sufficient operating budget' also increased to 8% in 2004 from 2% in 2003. By contrast, concern about 'keeping current on regulations' dropped to 3% in 2004 from 11% in 2003, while concern about 'company merger or acquisition' declined to 4% in 2004 from 7% in 2003.

In addition, when asked about benefits besides pay, the 2004 respondents reported that perennial favorite 'health insurance' was again the most popular at 82%. It was followed by 'pension plan/401K' at 64%; 'vacation/other paid time off' at 44%; 'flexible working hours' at 28%; 'dental insurance' at 16%; 'profit sharing' at 12%, and other benefits in the single digits.

Salary ups and downs

Discrete Control, Information Control, Process Control, System Integration

Besides changes in their overall outlook, the 2004 respondents identified several salary fluctuations among specific job functions and types of engineering practiced. For example, annual salaries for respondents in 'general or corporate management' declined 7.6% to $98,858 in 2004 from $107,045 in 2003, while pay for those in 'basic research' dropped 16.2% to $72,500 in 2004 from $86,500 in 2003.

Meanwhile, salaries for respondents in 'IT and information systems' jumped 16.3% to $92,708 in 2004 from $79,688 in 2003, while pay for 'sales and marketing' employees increased 6.1% to 88,287 in 2004 from $83,250 in 2003.

Similarly, among respondents practicing 'software/IT'-related engineering, salaries also jumped 12.3% to $90,104 in 2004 from $80,204 in 2003, while pay for those doing 'system integration' increased 7.3% to $87,236 in 2004 from $81,268 in 2003.

However, salaries for respondents practicing 'quality/reliability' dropped 10.7% to $69,460 in 2004 from $77,810 in 2003, while pay for those in 'automation/manufacturing' declined 4.8% to $75,604 in 2004 from $79,420 in 2003.

While primary types of engineering practiced remain fairly constant between March 2003 and December 2004, one category not previously listed as a choice, 'Instrumentation,' was chosen by 7% of respondents in 2004.

Apart from these on-the-job alterations, another reason why 2004's respondents may value consistency is that many have worked for multiple employers during in their careers. Paralleling the overall U.S. workforce, engineers and other technical professionals at present have almost certainly worked for many more companies than their counterparts in prior generations.

'Similar to U.S. employees in many fields, engineers must often work for one company for a shorter time, build their capabilities, and then move to another firm, while maintaining a 401K,' adds Phillips. 'If commodity-type engineering jobs aren't available, then engineers must find ways to add value by becoming designers, managers, creators, or adding value in other ways. The U.S. has always done this, which is good, because we need to stay ahead of other markets, probably with future advances in microelectronics, the coming nano revolution, biopharmaceuticals, and other fields.'

Corporate sales, spending

Though the 2004 survey focuses mostly on job issues, respondents also report that their companies are involved in many industries. Of the 1,370 respondents in manufacturing and 468 in non-manufacturing firms, 12% produce industrial, commercial, agricultural, or other machinery; 9% make instrumentation, measurement, control system, or related devices; 6% manufacture motors vehicles or components; 5% produce chemicals; and 5% make food and beverages. In addition, 12% of the 2004 respondents deliver system engineering, integration and architectural services; 4% work in utilities; and 3% are employed by governments.

Annual sales for firms employing 2004's respondents range widely from '$1 million and less' to '$1 billion and more.' For example, 7% work in firms with sales less than $1 million per year; 10% had sales of $1-4.9 million; 11% at $10-24.9 million, and 28% at $1 billion or more.

To help generate revenue, 29% of these firms spent less than $30,000 on instrumentation, controls and automation products, services, replacement equipment and repairs in 2004, while 35% spent $30,000 to $199,000; 22% spent $200,000 to just under $1 million; 11% spent $1 million to just under $3 million; and 3% spend $3 million or more.

The 2004 respondents report an average of 14.6% of their company's expenditures go to services, which was down from 22% in 2003. They add that 68% of their companies use system integrators and/or consultants on automation projects.

More than 70% expect automation and control spending in the next 12 months to match or increase spending in 2004. For automation and control systems, 53% expected to spend about the same, 19% will spend more, 24% were uncertain, and just 4% expect to spend less.

For more information on companies or organizations in this article, visit www.controleng.com , www.asme.org , and www.ni.com .

Was your merger handled well?

2003 2004
Agree strongly19%9%
Agree somewhat33%42%
Neither agree nor disagree20%23%
Disagree somewhat14%23%
Disagree strongly13%2%


Was enough thought given to integrating people, jobs, teams and cultures?

2003 2004
Agree strongly20%7%
Agree somewhat24%35%
Neither agree nor disagree22%25%
Disagree somewhat18%29%
Disagree strongly15%5%


Was your merger primarily bottom line focused?

2003 2004
Agree strongly45%21%
Agree somewhat21%41%
Neither agree nor disagree18%26%
Disagree somewhat8%9%
Disagree strongly7%2%
Source: Control Engineering and Reed Research Group's North American Reader and Salary Survey, December 2003-04


Primary job functions and average salaries, 2003-04
(% of 1,844 responses in December 2004; 1,370 responses in March 2003)

Average salary % of respondents
2003 2004 2003 2004
General or corporate management$107,045$98,8585%5%
Basic research$86,500$72,500NA0.5%
Sales, marketing$83,250$88,2874%3%
System design engineering, including applied R&D$80,407$80,99213%11%
Other$79,919$79,9592%4%
IT/information systems$79,688$92,7081%1%
System integrator/consultant$79,031$81,2317%7%
Control and/or instrument engineering$78,201$79,46922%18%
Production engineering, process or manufacturing$74,912$74,06810%12%
Product design engineering, including applied R&D$73,525$74,90111%14%
Other engineering, including project, software, plant, electrical and/or electronic$72,853$74,74112%14%
Operations and maintenance$69,825$70,5828%7%
Evaluation, quality control, standards, reliability, test engineering$68,618$64,8433%3%
Source: Control Engineering and Reed Research Group's North American Reader and Salary Survey, 2003-04


Control Engineering's typical subscriber profile
Control Engineering's average subscriber responding to the survey remains overwhelmingly male (97%), white (89%), highly educated and experienced, averages about $78,000 per year, has more than seven years with his present employer, and supervises about four people.

2000 2003 2004
Age 46.247.146.2
Degree Electrical engineeringElectrical engineeringElectrical engineering
Annual salary $71,510$77,569$78,012
Typical week 47 hours47 hours46 hours
Total work experience 21 years21.5 years21.7 years
Present tenure 12.6 years11.6 years7.4 years
Direct reports 9.4 staffers10.1 staffers3.8 staffers
Source: Control Engineering and Reed Research Group's North American Reader and Salary Survey, 2000-04


Primary type of engineering practiced and average salaries, 2003-04
(1,838 respondents in December 2004; 1,365 respondents in March 2003)

Average salary % of respondents
2003 2004 2003 2004
Automation/manufacturing$79,420$75,60426%27%
Electrical/electronic$74,023$75,34221%20%
System integration$81,268$87,23610%9%
Process$77,775$80,1088%8%
Design$75,104$76,7977%9%
Mechanical$75,924$74,1317%8%
Applications$83,335$81,6867%7%
InstrumentationNA$81,355NA7%
Quality/reliability$77,810$69,4602%3%
Software/IT$80,204$90,1042%3%
Source: Control Engineering and Reed Research Group's North American Reader and Salary Survey, 2003-04


Number of companies worked for
(% of 1,838 responses)

Source: Control Engineering and Reed Research Group's North American Reader and Salary , 2004.
One14%
Two20%
Three23%
Four16%
Five11%
More than five17%


Online Extra Information

Work Experience
(1,844 responses in December 2004 averaging 20.5 years experience; 1,368 responses in March 2003 averaging 21.5 years experience; and 681 responses in 2000 averaging 21 years ex-perience)
2000 2003 2004
5 years or less8%5%6%
6-10 years11%9%11%
11-15 years13%15%14%
16-20 years16%14%16%
21-25 years18%21%17%
26-30 years13%18%18%
31 years or more21%20%18%
Source: Control Engineering and Reed Research Group’s North American Reader and Salary Survey, 2000-04

 

Overall job satisfaction
(1,839 responses in 2004)
Very satisfied 31%
Somewhat satisfied47%
Indifferent8%
Somewhat dissatisfied12%
Very dissatisfied
2%
Source: Control Engineering and Reed Research Group’s North American Reader and Salary Survey, 2004

 

Respondents‘ perception of how gross income compares to other professionals in the same job
(1,837 respondents in December 2004)
Significantly higher2%
Slightly higher11%
About the same33%
Slightly lower36%
Significantly lower17%
Source: Control Engineering and Reed Research Group’s North American Reader and Salary Survey, 2004

 

Years with present employer
(1,841 respondents in December 2004)
Less than 1 year5%
1-3 years20%
4-6 years23%
7-10 years15%
11-15 years13%
16-20 years9%
More than 20 years15%
Source: Control Engineering and Reed Research Group’s North American Reader and Salary Survey, 2004

 

Weeks of paid vacation per year
(1,840 respondents in December 2004)
None4%
One week2%
Two weeks25%
Three weeks37%
Four weeks20%
Five weeks or more13%
Source: Control Engineering and Reed Research Group’s North American Reader and Salary Survey, 2004

 

End products produced by respondents’ companies
(1,838 respondents in December 2004)
Industrial, commercial, agricultural, and other machinery12%
Instrumentation, measurement, control
systems, and related devices
9%
Motor vehicles and components6%
Chemical5%
Food, beverage5%
Plastics, rubber4%
Pharmaceuticals3%
Fabricated metals3%
Other electronics products and equipment3%

Pulp, paper
2%
Engine, turbine, mechanical, and electrical
power transmission equipment
2%

Medical equipment and instruments
2%
Electronic components2%
Aircraft, aerospace2%
Petroleum, refining2%

Primary metals
2%
Computers, communication equipment2%
Other manufacturing processes10%
Total all manufacturing 75%
System engineering, integration, and architectural services12%
Utilities4%

Government, military
3%
Scientific research, services1%
Construction services1%
Information, data processing, and software services1%
MiningNA
Transportation servicesNC
Other non-manufacturing3%
Total all non-manufacturing 25%
Source: Control Engineering and Reed Research Group’s North American Reader and Salary Survey, 2004

 

Amounts of instrumentation, controls, and automation products purchased in 2003
(1,802 respondents in December 2004)
Less than $30,00029%
$30,000 to $49,99911%

$50,000 to $99,999
11%
$100,000 to $199,99913%
$200,000 to $499,00014%
$500,000 to $999,9998%
$1 million to $1,999,9997%
$2 million to $2,999,9994%
$3 million or more3%
Projected changes in spending on instrumentation controls and automation products in the next 12 months
(1,761 respondents in December 2004)
Increase19%
Remain about the same53%

Decrease
4%
Not certain24%
Source: Control Engineering and Reed Research Group’s North American Reader and Salary Survey, 2004



Objectives and methodology

The goal of Control Engineering 's 'North American Reader and Salary Survey, December 2004,' was to examine 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 and Reed Research Group successfully delivered e-mails to qualified Control Engineering subscribers across its total readership on Dec. 8, 2004. The e-mails asked recipients to complete a 43-question survey. The survey closed on Dec. 13 with 1,846 responses.



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