Date: Sat, 19 Nov 2005 14:59:14 -0800 From: Norm Matloff To: Norm Matloff Subject: more on the short-lived nature of engineering careers To: H-1B/L-1/offshoring e-newsletter In my posting a couple of days ago of Sharon Begley's Wall Street Journal article which questioned the industry's claim of a "shortage" of engineers, I said, * One of the most important passages is one that most readers won't * even notice: "Some were deemed overqualified." What the euphemism * "overqualified" really means here is "too expensive." Ask almost any * HR department what level of engineer they want to hire, and they will * answer three to seven years of experience, or two to nine, something * like that. That's where the age discrimination comes in; remember, * two to nine years of experience typically means the person is in the * age range 24-31. They will try their best to avoid hiring anyone * much older than that, as they are much more expensive. And then if * they can't find enough people in the 24-31 age range, they say they * have a "shortage" of applicants. * ... * * For the same reason, the claim that the reason older engineers can't * find work is that they lack the latest skills is also phony. Again, * I go back to what I said before: Just ask almost any HR person what * range of experience they are aiming for in their hiring, and you'll * be amazed how uniform the responses are, 3-7 years, 2-9, 4-8 or * whatever, always single-digit numbers. THAT is the real story, and * all the rest is just excuses. Well, enclosed below is another article, which illustrates my point (without the author's realizing it). Consider this passage (emphasis added): * An ideal refinery candidate these days, Mr. Barlow says, would have * THREE TO FIVE YEARS of "hands-on" EXPERIENCE "as opposed to doing * something else and deciding they want to be a process engineer." One * Midwest pharmaceutical company client has a vacancy for a process * engineer in the $75,000-to-$90,000-a-year range. The position has been * open for two or three months, but prospects interviewed so far have been * "a little light in terms of skill," Mr. Barlow says. The company is * looking for someone with THREE TO FIVE YEARS' EXPERIENCE in * pharmaceutical process manufacturing. The age issue comes up, to various degrees, in several other places in the article, such as: * Mr. Barlow sees resumes from higher-paid, more-tenured engineering * executives -- for instance, those involved with the ChevronTexaco Corp. * or Phillips Petroleum/Conoco mergers -- but most have been away from the * refinery floor for a good while and aren't ideal candidates for an * operational job. These days, he concedes, companies "see an engineer as * more of a cost than a profit center"... I can accept that some may not be "ideal" candidates, but the industry says it has a desperate shortage. I'm sure that many of them do remember how to be an engineer, and have very valuable experience that the younger ones lack. Unfortunately, HR departments don't consider intangibles like that, as the "cost center" statement above notes. Consider this one: * The ideal candidate would have seven or more years' experience in the * defense industry and a bachelor's degree or better. At least the experience is defined in terms of a lower bound, not an upper one, but I can guarantee you that there is indeed an upper bound, and in fact one not too far above the lower. * Texas Instruments Inc., Dallas, the big semiconductor company, currently * has 460 job openings, including about 300 for engineers, primarily * designers of analog circuits "at all experience levels from fresh * graduates to multiple years," a spokeswoman says... That's "multiple years," folks, not "multiple decades." You get the picture. And TI has been one of the most strident firms lobbying Congress to expand the H-1B work visa. Norm http://www.collegejournal.com/salarydata/engineering/20020612-hyatt.html Once-Hot Engineers Find a Cooler Market By JAMES C. HYATT It doesn't take a calculator, or even a slide rule (for those of a certain age), to figure out that times are tough for engineers these days. Start-ups are stopping, once-hot high-tech fields are cooling off, and big companies are aggressively getting smaller. The result is a wave of joblessness for engineers who enjoyed nonstop boom times in the 1990s. Thomas Gardner, a 32-year-old mechanical engineer, was laid off last November by start-up Codeon Corp., a Columbia, Md., maker of optical equipment for fiber-optics telecommunications companies. Codeon had hired Mr. Gardner to help scale up manufacturing, but expected orders didn't materialize. He had been there eight months, at an annual pay of $60,000. Since then, Mr. Gardner has been sending out resumes and roaming the Internet for jobs. But he found many companies weren't hiring at year-end, and the "first quarter was hairy, because companies were waiting to see how the economy was going," he says. His worst experience: A government contractor offered him a "great job and a great salary" to help set up an engineering facility. But he hasn't heard from the company since a key contract deadline passed in April. Job prospects for electrical engineers from Texas to Wyoming are "pretty bad," agrees Gary Johnson, Midwest employment and career-services coordinator in Austin for a unit of the Institute of Electrical and Electronics Engineers, a nonprofit professional association. "Layoffs are continuing and a lot of the start-ups that had been moving along are finally running out of cash." In Austin, he says, there's no longer a demand for semiconductor-design engineers, who were sought-after just six months ago. Higher-ranking engineers (director and above category) in the Texas area "are having to move out of state to find positions." Indeed, unemployment among engineers has more than doubled since early 2001, according to the U.S. Department of Labor's Bureau of Labor Statistics. The jobless rate for all engineers, 1.5% in 2001's first quarter, reached 3.6% in the most recent first quarter. Among electrical engineers, the rate rose from 1.1% a year ago to 4.1%. And the number of engineers unemployed from January to March reached 79,000, up sharply from 32,000 a year earlier. Meanwhile, the number of employed electrical engineers fell to 690,000 in the latest first quarter from 748,000 in mid-2001. Selective Hiring Employers with openings are being more selective these days. Companies hiring petroleum and chemical engineers "are being very picky on what they want," reports Jim Barlow, senior technical recruiter at SPECTRA Associates, a small Laramie, Wyo., recruiting firm. These days, he finds, clients "want as close a match as possible." In other years, they'd hire someone who met 80% of the requirements. SPECTRA focuses on engineers in the $65,000-to-$100,000-plus salary range, such as project, senior project and lead-manager engineers, mainly for clients in the Midwest and West. An ideal refinery candidate these days, Mr. Barlow says, would have three to five years of "hands-on" experience "as opposed to doing something else and deciding they want to be a process engineer." One Midwest pharmaceutical company client has a vacancy for a process engineer in the $75,000-to-$90,000-a-year range. The position has been open for two or three months, but prospects interviewed so far have been "a little light in terms of skill," Mr. Barlow says. The company is looking for someone with three to five years' experience in pharmaceutical process manufacturing. Mr. Barlow sees resumes from higher-paid, more-tenured engineering executives -- for instance, those involved with the ChevronTexaco Corp. or Phillips Petroleum/Conoco mergers -- but most have been away from the refinery floor for a good while and aren't ideal candidates for an operational job. These days, he concedes, companies "see an engineer as more of a cost than a profit center," and haven't seen enough economic improvement to justify stepped-up hiring. Cuts by aerospace companies may account for much of the overall decline in demand for engineers, says David Napier, research director at the Aerospace Industries Association of America. Aerospace employment (not limited to engineers) has fallen 66,000 since Sept. 11, in large part due to cutbacks by aircraft builders when airlines delayed new orders. The Bush administration's defense buildup will reverse a slowing in federal spending on aviation-related contracts. But a lot of the defense spending won't show up until the new fiscal year beginning in October, "and it won't be until 2003 that you'll see work coming out of that," Mr. Napier says. Meanwhile, commercial-sector production will fall this year, further in 2003, "and the first year you might see an increase is 2004," he says. Northrop Grumman Corp., Los Angeles, the big aerospace-and-defense company, is benefiting from the rise in defense spending. It currently has about 1,100 openings for engineering jobs of all sorts and experience levels. "Double E's (electrical engineers) are always in great demand," a spokesman says, as well as software engineers. Northrop Grumman will be a major contractor with Lockheed Martin Corp. on the Joint Strike Fighter contract announced last fall -- considered the largest defense contract in history. The spokesman said it expects nationwide to be hiring about 1,600 engineers to work on the Joint Strike Fighter program over the next few years. Northrop Grumman declined to discuss salary ranges, citing competitive reasons. Mr. Napier adds that the industry is likely to see a shortage of engineers as many older engineers hired years ago to develop the space program reach retirement age. Nowadays, increasing numbers of students studying engineering are foreign, "and foreign students are less employable in the aerospace industry" due to security-clearance issues, he says. And, Mr. Napier notes, young people in general aren't joining the aerospace industry. The percentage of workers aged 25 to 34 in the aerospace industry (not just engineers) has fallen to 17% from 27% in 1992, according to Mr. Napier. Where the Jobs Are In the construction sector, "demand is strong," reports Jim Vockley, executive vice president of Kimmel & Associates, an Asheville, N.C., search firm. "Specialties like mechanical and electrical engineers are in very high demand," while civil and structural engineering demand is somewhat less robust. "Right now the public-sector and government work seems to be lagging behind." In geographic terms, "the Southeast is very strong," he adds, while New England is the lowest area. Kimmel's searches typically average in the $100,000-$150,000 range for upper-level managers and executives. Most of the current assignments reflect expansion rather than replacement hiring, he adds. He's currently searching for a branch manager with about 15 years' experience for a design-build firm in the Pacific Northwest for a position paying $100,000 per year. Mr. Vockley says an attractive candidate these days might be around 50 years old, with a half dozen or so jobs on the resume, but a "solid pattern of staying long enough to have an impact on an organization." Prospective employers are interested in past results: "Are candidates profitable? What fees have they generated, or changes in staff or policy changes implemented?" Mr. Vockley says private companies often can be more creative and flexible in fashioning compensation packages. "Large companies may be at the mercy of salary caps, but if a midsize private owner wants somebody badly enough, he can get creative." Job Hoppers Need Not Apply Some parts of the engineering job scene "are starting to look better," says Mike DeLaney, a partner with engineering search firm Global Network Recruiting in Rochester, N.Y. While the communications sector remains very soft, in his practice analog-chip-design engineers, sought by semiconductor makers, "are always in demand. And there's a good deal of activity in the defense sector," he says, particularly for systems engineers looking forward to designing new systems rather than upgrading or retrofitting work. The ideal candidate would have seven or more years' experience in the defense industry and a bachelor's degree or better. "Two or three years ago, companies were looking for a body. Today they want someone who can hit the ground running," which tends to rule out job-hopping engineers without skills very specific to a product or industry. Such candidates can earn $85,000 or more, and expect a 7% to 12% pay increase, Mr. DeLaney says. Texas Instruments Inc., Dallas, the big semiconductor company, currently has 460 job openings, including about 300 for engineers, primarily designers of analog circuits "at all experience levels from fresh graduates to multiple years," a spokeswoman says. The starting salary for a well-qualified graduate from a good college is about $60,000. Less-glamorous engineering jobs aren't easy to fill. Bill R. Lindley III, vice president of engineering at W & W Steel Co., Oklahoma City, says he and his competitors report a general shortage of structural engineers. "They're not coming out of the universities," he reports. "High-tech [degrees] have taken over at the university level." His company, which employs about 300, fabricates long-span trusses for buildings such as aircraft-maintenance hangers, arenas, and convention centers. He employs five engineers, and has posted an entry-level engineering position for which he expects to pay around $45,000 a year. He received a dozen or so e-mails one recent day after the position had been posted about a week. He's also contacted "steel-oriented professors" at three universities, although better students seem more interested in East Coast jobs. Mr. Lindley says lack of trained structural engineers has prompted his industry to raise funds for Oklahoma State University to encourage research into structural engineering. "The structural lab at the University of Oklahoma has gone to the environmentalists," he says. Not every jobless engineer is hitting the panic button. Jonathan Moore, 25, recently quit a job in California in order to move to Boston with his girlfriend. "I got tired of the freeways and the shopping centers," he says. He'd also lived on a boat for 18 months and had been able to save some money from his $50,000 a year field-applications engineering job at Orthodyne Electronics, Irvine, Calif. Mr. Moore has gone to some job fairs in the Boston area and has noticed that a lot of out-of-work engineers "are extremely qualified. A lot of smart people out there don't have a job right now." Still, he says, "most of them are upbeat. Everyone is talking about the 'turnaround' that they expect soon." Most interesting jobs these days require five years of experience, he adds. So he's currently "just exploring and checking out Boston. But call me back in 10 months and I'll be sweating bullets" if a job hasn't turned up. -- Mr. Hyatt is the former associate director of The Wall Street Journal's market data group. Email your comments to cjeditor@dowjones.com .