Thursday, 24 July 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 (65)

  • 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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