Friday, 01 August 2014
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How much is an engineer worth?

As always happens when yet another report emerges warning of a UK engineering skills shortage, the initial response from vocal readers of The Engineer has been to decry the level of pay that engineers receive in this country.

As one reader pointed out, the 15 per cent wage premium mentioned in the report for those who’ve studied for years to gain an engineering qualification doesn’t seem a lot. However, it’s not the whole picture, so I thought I’d draw out some extra points from the Royal Academy of Engineering-commisioned study.

According to the Office for National Statistics’ Labour Force Survey of 163,218 people aged 16–64 in England & Wales between 2004 and 2010, looking at those who had STEM qualifications and those who worked in SET jobs, there was:

  • a 19% wage premium for STEM overall;
  • a 10% premium for science occupations;
  • a 33% premium for technology occupations;
  • a 15% premium for engineering occupations;
  • but hybrid science/engineering occupations do not attract a premium.

This implies that if you work in an engineering job you are likely to earn an average of 15 per cent more than the average person in the UK (but not 15 per cent more than minimum wage, as one reader suggested).

The Labour Force Survey for the first quarter of 2011 found median wage for engineering professionals to be £29,700. The ONS median full time salary in the UK in 2011 was £26,244 – which makes that 15 per cent figure look about right.

These engineering jobs will include technicians and medium-skilled workers. However, if we look at engineering graduate salaries and compare them to those of people with only two A Levels, we see a bigger premium.

Data from the Department of Business, Innovation and Skills (BIS) showed that an engineering graduate in 2009 was likely to earn 32 per cent more than someone with two A Levels. This was also higher than the average graduate premium, which was only 27 per cent above the salary of A Level holders.

The Academy’s report also found that engineers’ salaries rose sharply as they got older, suggesting employers put an even bigger premium on experience than they do on qualifications.

This can also be seen in a June 2010 survey by ERS of registered engineers and technicians, which found the median wage of incorporated engineers was £41,345, and the median wage of chartered engineers to be £52,609.

The other point to remember how are perceptions of typical earnings in the UK are skewed by the vast amounts earned by some company directors and those in banking – a sector often accused of draining talent from the engineering graduate pool by offering salaries that manufacturing firms just can’t compete with.

Some politicians, newspaper journalists and professionals would consider £50,000, £60,000 or even £100,000 to be a middle class salary. And that’s certainly a lot less than the million-pound bonuses available in the City. But if the median salary is £26,000, then there are an awful lot of people out there for whom £50,000 would be a modest fortune.

Engineers who work hard by studying for years, gain desirable and useful skills, and help change the world for the better deserve a substantial reward. Unfortunately, engineering doesn’t always produce the kind of short-term profits that facilitate the bonuses and commissions seen in financial services.

Research and development, product design and building manufacturing facilities require substantial investment and long-term strategy, whereas moving imaginary pots of money around on a computer – while often socially useless or even damaging – can create money almost from thin air.

That’s not to say there isn’t a problem with engineering salaries, or that it wouldn’t be worth engineering firms looking again at their own payrolls if they want to encourage more young people into the sector. But engineers’ earnings are always going to be limited to some degree by the money available.


Readers' comments (66)

  • Question: How much is an engineer worth?

    Answer: I graduated in Engineering over 20 years ago from a highly rated British university. I also have an MSc and a PGCE teaching qualification. After substantial experience working as a Project/Design Engineer in industry I now teach engineering (HNC/ HND/ foundation degree) at a further education college. I earn under £27,000.

    Any young people out there - please take note before borrowing £50,000+ to study engineering.

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  • some good points. Does not explain why graduate salaries are higher in other countries such as Aus, Canada and the US though; as a recent grad engineer I'm off and so are alot of my class mates - we'll be back when the wages get better

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  • I'm not sure where you get your salary figures from. A glance through the job adverts on the Engineer seems to tell a different story.

    As a contract engineer I have forsaken benefits like bonuses, pension, healthcare, sick pay etc. to get a reasonable income but also have to suffer almost permament lack of job security. All of this to maintain an average life style. Like Anonymous above if it wasn't for my family I would be off abroad.

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  • I too graduated in engineering electronics. Although in 1987 we were lucky in not only having no fees to pay, we actually got a grant! I was lucky enough to be sponsored at Warwick University by Lucas (remember them?) and following a couple of years as a junior designer realised there was more money to be made selling electronics than designing products. in the years that passed I moved into engineering PR and then set up an agency. We now employ 20 people (half of them with electronics/engineering backgrounds). But, there is an issue. We were recently trying to recruit an additional technical writer and an account director and even though we were offering £60,000 plus we really struggled to find anyone!

    I guess what I am saying is that maybe for straightforward engineering salaries are restrictive, but if you are prepared to look beyond that and use your experience and qualifications in a different way, rewards are there without having to go abroad or prostitute yourself in the city.

    Some may say that by doing technology PR you have already done that - but when you see that 70% of our turnover comes from companies outside the UK, we are helping the UK economy.

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  • I've an MSc in Electrical Engineering and 7 years experience.

    My younger sister has half the experience and a BSc in hospitality.

    She now earns more than I do.

    I recommend science and engineering as disciplines to anyone but not as careers. No respect in society, little opportunity for career progression, near disdain from the state, poor RoCE and long working hours.

    I should quit and study dentistry. At my age I still have enough time to forge a far more profitable career from it and make a difference to people's lives rather than shaving fractions of a percentage off costs for clients wanting to make yet larger profits.

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  • When managers and sales people stop treating Engineers as a resource to be exploited, only then will Engineering become more valued.
    At the age of 43 I am constantly told my skills are out of date, yet the people they hire instead don't know pin 1 from 14 on an IC?
    The Engineers aren't being fooled!

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  • What you can earn in Engineering is limited only by your skills, what you are prepared to do, the responsibility you are prepared to take, how you are prepared to develop your career, the opportunities presented and a side order of luck to be in the right place at the right time.

    Not unlike many other careers. Better paid than most, less than some others.

    I don't want people in my team who believe they can earn vastly more elsewhere. However, I'll probably take them back once they find out it's generally not true.

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  • I'm 25, Graduated in 2010 with a BEng in Mechanical Engineering, I only recieved a 3rd class honours due to personal issues affecting my work.

    I managed to get a job (luckily!) just through knowing someone in the construction industry, and now work in a design office just outside of london for £28k... I consider myself EXTREMELY lucky with this job, and am currently undertaking a part time masters in control systems engineering on the road to chartership with IMechE.

    Unfortunately, the quality of education and engineering institutions far outweigh the quality of, and respect for engineering careers in this country, with salaries comparitively meagre compared to our contribution to society as a whole.

    So next year I will be looking to move abroad as soon as my chartership goes through. Perhaps America, Canada or Australia, where salaries for a similar position to my own can by upto 3 or 4 times as much.

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  • Inventors are undervalued by society, with many inventors working long hours for little return. The stereo type inventor with a propeller spinning on top of his hat is very much a minority.

    Have you ever wondered what an invention is worth, what is involved in inventing, applying for patents, and having patents granted, producing prototypes, performing research and development, and getting an invention into production ?

    The time has never been better to embrace new technology, with the carbon pricing started, and the increasing cost of electricity, and focus on the environment.

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  • This will run and run… but there’s an issue of fairness and equality here. Inevitably the market is not ‘fair’ – take a worker in a care home, in general their pay is pitiful when looked at as the measure of a ‘living wage’ i.e. to pay a mortgage, have a holiday or two, go out for a meal or two a month etc. I certainly would not want their (or lots of other) low paid jobs, but they are clearly ‘deserving’.

    There is a problem with attacking bankers & city workers through the prism of ‘fairness’ (and I agree they do get more because they are working in a sea of money, and there are problems there), in that it works its way down the tree too. By concentrating on what is fair, the argument can be turned back on any of us because there is always someone more deserving of us and so it ends up being equality downwards. By any of us asking for more we can be presented as being a bit greedy. After all what are we going to do with that extra cash, buy a bigger better car, go on a holiday abroad, by a bigger TV, eat out more & become obese?

    Many people (and ironically it is often the comfortably off metropolitan commentators who say this) say we should all be consuming less, travelling less, even eating less. These are all pressures against aspirations for a better (financial and material) life on all of us, engineers and careworkers etc. This causes problems for anyone of us who wants a better life for the vast majority, irrespective if there are a few decadent ‘super rich’. Picking on a small set of financial workers & MDs ultimately does us no favours. If that did happen – then the next rung down the ladder of relatively well off professionals would be the next target- and that might be us. In addition, the financial/city pay issue is a distraction from the real problems of a need to restructure the whole economy, financial services and manufacturing to produce real growth and wealth, to pay for increases in all our pay.

    Rather than being distracted by a few rich city kids, would we not be better demanding better pay and aspirations for everyone, in all sectors of life, rather than try to make ourselves a special, ultimately devisive case? Equality up, not fairness down.

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  • I also disagree with the findings on salary, I've worked in the railway for over 20 years, I've seen graduates come in into finance etc and regular pull in over £40K whilst us mere mortals of degree qualified engineers are lucky to recieve £29K and are treated with contempt by managers

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  • Seems we're still suffering from the "man in oily overalls" syndrome.

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  • I got out oof the UK Engineering sector 20 years ago having got fed up of the lack of job status and poor remuneration. Reading this article and the comments above I see it was and is still the correct decision. British engineers are respected the world over - except in the UK. I wish all those firmly rooted in the UK the best of luck

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  • I studied Electrical/Avionic engineering & left the industry as the wages were pathetic.

    In the UK engineers garner no support or recognition from successive governments.

    I now work in software engineering with a better benefits package with less stress.

    I have also left the IET as I felt that membership offered absolutely no benefits.

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  • Have had an Engineering Degree for 20 years! We are the pople who drive companies, just most of us dont capitalise on it! Push for more money. I have several Engineers working for me and pay them accordingly! I have been all over the world and would never say dont go, however the grass is not greener. In the US you could get x 2 pay, however will be a slave to the company 14 days holiday per year and expected to be on call 24hrs p/day, and will burn out by 35. Keep your skills updated (eg CAD) get yourself into the centre of 'any' business, you will be running it in 5 years time, learning Sales and Business is easy if you can work out Stress equations!

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  • I have been in Engineering for over 30 years, in varying degrees of management. I have found the further away you tread from 'Engineering' but staying in the sector the more you can earn - nonsense and short sighted. The abroad thing makes sense. My son 12 months ago graduated with a masters geotechnical Engineering went to Oz and earns twice my salary (£100K at 23!!) again short sighted of this country.

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  • It would be interesting to hear people's experience of whether engineering jobs in other countries are better paid across the board or only in specific sectors such as oil and gas or mineral mining, where you'd expect resource-rich countries like Australia and Canada to offer more.

  • With over 45 years of various engineering post its true to say in GB engineering has been run down drastically, unqualified Sales reps are more likely to obtain higher Salerys. In Europe however Skilled engineers are paid more than managers in the same companys.

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  • Are there any more british engineers out there working in Aus, US or Canada who can share their experiences on whether it was the right choice?

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  • I have a 2:1 in Integrated Engineering, I got his as a mature student, qualifying in my early 30s. Before getting the degrees I'd had 11 jobs in 10 years, since getting the degree (17 years ago now) I've had three jobs, leaving them all for better opportunities at a time of my choosing.

    I earn mid 30s per year, including my bonus, so I'm not 'wealthy' but I do have a comfortable lifestyle thanks. I also get to go to sleep at night knowing I'm doing something to improve the environment and keep manufacturing jobs in the UK.

    I've recently changed focus from Process Improvement to Environmental Management and H&S, my engineering skill set is most useful and will help me to gat chartered status with the relevant bodies.

    I suppose I might have been lucky but I know a few folk from my Uni days, not engineering students, who earn less than I do and have not had the employment security I have enjoyed.

    Yes, I would recommend engineering as a career, even if only because it does give the option to go abroad and seize well paid opportunities.

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  • It is said that an engineer is someone who can build something for $1 that any fool can build for $2. That is the worth.

    I'm outside the UK(Texas, USA) at a petrochem facility for the past 20+ years. We've heard and had the same "shortage" thing told to us, sometimes true and sometimes just to increase the number of "visting, lower-paid foreign engineers(H1B). In the end, if you don't ENJOY engineering, you're in the wrong field.

    PS: Oliver Heaviside is one of my heroes.

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