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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 (74)

  • Ummm, some of these comments have actually got me feeling quite good about my position. I have been in the electronics industry for nearly 10 years. I started working for a company that design and manufacture medical equipment whilst undergoing 5 years of university which included an HNC and a degree.
    I finished with a 3rd class BEng in electronics (i had fun at uni), and then returned to work for a further 2 years earning £16,000 per annum. This was a bit of a p**** take. I left to work at ABB (flow metering sector) in the Gloucestershire area as an Electronics hardware engineer, I started on £25,000 and 2 years later went up to £30,000. I am 28 years old. I feel good about this amount of money and am sure that my salary will increase as I gain in experience and move through future job roles. I expect to earn about £40,000 in no more than 10 years time. (Even with the standard 2.5% yearly pay increase, I will be on £50,000 a year by the time I am 50, this may not be very much at that time, but I consider this to be an absolute minimum).

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  • Anonymous. Is that in today's money? If not it is barely above the intended rate of inflation, ~2%. Well behind recent inflation figures we have seen (apart from the most recent).

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  • Science and engineering salaries are better in China at 20-40K pounds for an engineer. Need we say any more?

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  • I thought I was on a modest salary of £50k after 12 years working in Rail with BEng MSc CEng MICE qualifications.

    Perhaps my view has been skewed by the fact former colleagues have left for the oil & gas sector whom are being paid considerably more, i.e. earning more than the Prime Minister in some cases.

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  • I did a degree in electronics and a PhD, I have reach Senior status and now found that I've reached the ceiling in terms of pay and that no matter how much I improve or get better I will never get paid any more unless I leave the UK and go to another country. The huge other professions which earn so much money in the UK make it impossible to lead a good quality of life no matter how brilliant at engineering you might be.

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  • One of the problems in the UK is a plumber can drive around with the word ‘Engineer’ written on the side of his van, I would not have the audacity to call myself a plumber!! If in our office our photocopier breaks down, you call the helpline and they respond with “we will get our Engineer out ASAP” Engineer? Really? Do these people hold a HND or BEng minimum? I doubt it.
    It belittles our profession, a profession which relies on an in depth knowledge of Maths, Physics and the Sciences – yes the hard subjects! The trick is to specialise, I can earn £35/hour as a contractor or upwards of £50K permanent as a powertrain calibration engineer in the automotive sector. Always in demand too. In my experience component engineers, manufacturing engineers and program engineers generally earn less and are less in demand. But yes foreign shores value Engineers far more that this misdirected, city biased country.
    The brand ‘British Engineering’ if there ever was such a thing, was ruined by the unions in the sixties and seventies. Poor quality, unreliability etc…were synonymous with anything built British. On the contrary look at present day Germany, an economy built on its engineering prowess. We have the housing market and suits in cities.

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  • I have a basic University degree and have worked in Engineering design now for 22 years. My typical gross earnings when in the UK are about 210,000 GBP gross per year. Comparible earnings in most countries outside of the UK. I don't know anyone who Is well established and experienced and respected who earns less than about 150,000 GBP gross, apart from staff people. Currently have not been working for nearly four months now, because the job market has dried up, and agents contact me about jobs paying a NET of around 9000 GBP per month, which I don't want to work for.

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  • I'm 30 and on ~£50k (includes £3k bonus) in integrated circuit design. To be honest, I feel hard done by as the work is mentally intensive and my friends in other easier jobs earn more! I think the only money to be made in engineering in the UK is in oil gas (want high pay? Go into a high paying industry - what was I thinking!). I'm tired of the whole thing already and wish I'd done something else. The only thing I feel I can do is try to move into oil & gas, but unfortunately I don't think electronics engineers even earn that much there (it's mostly structural, mechanical & petrochem engineers that earn there).

    In summary... the wages are rubbish considering the difficulty of the work. Don't do it!

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  • I'm a Chartered Building Services Engineer with 20 years experience. 45 yo now and burnt out, looking for a new career. My advice to any Engineering graduate is retrain and do something else. Engineering is not a well paid or respected profession.....the world over. US, Aus, Canada are no exception. You're also a whisker away from unemployment when recession hits. It's not worth it and if i had my time again I wouldn't do it. Do accounting, tax, finance or pick a trade and go to Australia or Canada. The salaries for "real" Engineers are a joke in the UK.

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  • I don't really understand all the comments about engineers not being paid enough. A quick look on the job boards in the rail sector are paying contract systems engineers between £300 and £550 a day. This is £5k to £9k a month after tax.

    Graduate starting salaries for engineers are decent. For all those complaining about the financial services industry, it is the minority that earn big bucks. Most people start on lower starting salaries than graduate engineers, with significantly higher living costs from London. Also the working hours are significantly worse than in engineering.

    This is a free market society which rewards individuals who go out and seize opportunities, and build their skills towards sectors which pay well, rather than expecting employers (especially in unprofitable sectors) to pay more in current roles.

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  • Contracting is a way of increasing income greatly for an engineer. The difference between a contractor and employee salary is vast. The downside for the contractor is there is a bit more work to do to manage tax and you need to pay employers NI as well. You also miss out on benefits such as paid holiday, sick pay, pension etc. You have very little protection in your job, the company can decide to get rid of you and not pay anything to do that as they can let the contract run out. You are normally on short contracts typically 3 to 6 months in length and so your income is not as stable. It is also quite likely you will have to travel great distances and move around the country a lot staying in hotels more often than home.

    There are some well paid permanent employee jobs out there but you have to really get out there and find them. They can be quite niche and you need to be top of your field to get them, often a doctorate helps you do that. Get lots of experience and look out for opportunities.

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  • I just did a quick check on average starting salary for US and UK and the difference is about £10k!! 10K is a payrise which takes about 5 years on average to get. So if you really want good money out of engineering, then you will have to move out othe UK. I am on ~35K after five years of working, graduated with first mech eng masters. I thought i was on ok money but when i found starting salary is 37k in america, I feel like I am underpaid by a lot, perhaps thats the market rate here in the UK. I really want to be making £50K in next 5 years time or less but looking at the current UK job market for engineers it looks unlikely and its bit sad.

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  • I'm an assistant engineer just started my career I'm on £30.00phr qualified engineers are on £40-50phr lead engineers are on £70-100phr majority of which goes on taxes

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  • A question about contract engineering as a field, where can you major in it? Given my interest, I have a background in civil engineering.

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