Automation profession outperforms economy

October 072012
Automation profession outperforms economy

Increased demand, increased salaries

By Rick Zabel, as originally published by InTech Magazine & InTech Online - October 2012.

Last year’s salary survey (InTech September/October 2011) indicated almost no increase in average salary from the previous year. Yet, job satisfaction increased to more than 80%. Last year, I challenged you and other automation professionals to step up and solve those problems that hindered your manufacturing processes and bottom-line profitability. I suggested you use your expertise to analyze, optimize, and improve operations, and then measure the results of your improvements and return on investments. Prove to management the value of your profession, and ultimately be able to command higher salaries. Have you accepted that challenge? Are your employers putting more value on the automation profession? I believe the answers to those questions are “Yes!”

While job satisfaction remains high (79.9%), this year’s survey indicates salaries are on the rise—up a respectable 4.4% over last year. This rise is indicative of the noticeable increase in the demand for qualified automation professionals. Automation.com’s sister company, automationtechies, which provides direct-hire and contract recruiting services, has never been busier in its 12-year history. In fact, it has become much more challenging to find qualified automation professionals. And, when they do find qualified candidates for open positions, the candidate is likely to have multiple job offers on the table.

Year after year, I have argued salaries of automation professionals are low when compared to the value that automation brings to a manufacturing company. And each year, I keep waiting for those salaries to increase. That is now happening, and as more professionals retire, the demand will continue to increase. So will the salaries. The time has never been better for young engineers to enter the automation field. Manufacturing companies have been bringing, and will continue to bring, more manufacturing back to the U.S. To stay globally competitive, manufacturers will need to continually increase productivity and reduce costs. And how do you do that? By automating!

This year, InTech again collaborated with Automation.com to conduct the annual salary survey. The survey had 3,415 completed responses from automation professionals located around the world, with 64% from the U.S. Because salaries around the world vary greatly, we broke out the U.S. responses only to avoid skewing results. All the results quoted in this article, other than the “Average salary by region of the world” chart, represent U.S. responses only.

Snap shot of typical respondents

The job function of the typical survey respondent was an Automation/Control Engineer, accounting for 26.1% of total responses. The most prominent average age range was 45-54, indicated by 33.9% of respondents. Nearly half (45%) of the respondents were college graduates with a Bachelor’s Degree, with the largest percentage of those (35.1%) possessing a Bachelor’s Degree in Electrical Engineering. 26% of respondents attended some graduate school, and 17.9% received an Advanced Degree, of which the largest percentage (31.8%) acquired a Business Administration degree.

The largest percentage of respondents (25.2%) have 31 or more years of professional work experience, while 62.2% have been with their current employer for less than 10 years. It is interesting to note 23.4% of respondents have been with their current employer two years or less.

More than 75% reported salary increases this year, with the largest percentage (47.7%) seeing a 1-3% increase. At least a portion of the compensation of 65.3% of our respondents came in the form of commissions or bonuses, with 37.4% in the 1-10% range. The largest percentage of respondents (36.8%) clocked between 41 and 45 hours per week, and the average vacation time was three weeks per year.

Salary facts

The largest percentage of respondents (25.9%) reported a salary in the $100,000 - $124,999 pay range. The second largest percentage (12.5%) was a pay range of $125,000-$149,999. The average salary in the U.S. is now up to $103,910—that is an increase of $4,370 (or 4.4%) over last year. Two other regions of the world reported a higher average salary. Canadian respondents reported an average salary of $105,440 (a 3.7% increase over 2011), while Australia and New Zealand respondents reported a whopping $143,470 (an 18.5% increase over 2011). It is interesting to note that the dollar exchange rate in both of these regions is fairly close to a 1:1 ratio. However, the cost of living is typically higher in both regions, and the average salaries reflect those higher living expenses.

Within the U.S., the highest paid region is the West South Central (South), with an average salary of $116,570. The lowest paid region is the East North Central (Midwest), with an average salary of $89,170. (Regions are defined on Wikipedia. )

The average salary of the largest percentage of respondents by job function (26.1%, Automation/Control Engineering) was $104,040. The top five highest paid job functions are listed below; the highest paid job function is Engineering Management.

  • Engineering Management – $132,720 (7.7% of respondents)
  • Consulting Engineering – $124,290 (3.2%)
  • General or Operations Management – $123,050 (2.5%)
  • Safety Systems Engineering – $122,030 (0.7%)
  • Sales (Outside) – $117,020 (5.9%)

Job satisfaction

The job satisfaction of automation professionals remains high; nearly 80% of respondents indicated they are satisfied with their jobs. 33.8% said they are very satisfied, and 46.1% said they were somewhat satisfied.

Based on the survey results, this job satisfaction is tied to a number of factors. While salary is a leading factor, it is not the most important factor. Like previous years, the feeling of accomplishment rated the highest, with job security, benefits, salary, technical challenge, pleasant work environment, and good relationship with work colleagues all as contributing factors. The top four most important benefits are health insurance (76.1%), pension plan/401K (52.7%), flexible working hours (38.3%), and paid time off (36%).

This year, we asked respondents to tell us if they were currently seeking new job opportunities. Those who are actively seeking new opportunities made up 9.7% of respondents and had an average annual salary of $90,510—significantly less than the average. Passive job seekers made up 33.6% of respondents, whose average salary was slightly less than average at $101,800. Those not seeking new opportunities (56.7%) were making an above average salary of $107,560. I caution those companies who are paying less than industry average: With the demand for automation professionals increasing, you will likely lose your talent.

A degree of higher learning

More than 71% of respondents possessed a college degree or higher. The average salary of college graduates (without an advanced degree) is $105,230. The results show those who attended at least some graduate school (but did not finish) were able to increase their annual salary by $9,240. Last year, this difference was only $795. Those respondents who actually completed an Advanced Degree reported an average salary of $118,600; that is a $13,370 increase over college graduates. If you factor in that increase over your career, it certainly pays to get that Advanced Degree.

The largest percentage of respondents (35.1%) received a Bachelor’s Degree in Electrical Engineering, pulling an average salary of $112,750, an increase of $3,258 over last year. The top five average salaries by degree are:

  • Mathematics – $129,440 (1.7% of respondents)
  • Chemical Engineering – $128,800 (10.7%)
  • Physics – $126,440 (1.6%)
  • Control Engineering – $115,200 (2.4%)
  • Other Science – $113,110 (3.3%)

Participants in our survey work in 40 different industry segments. The largest number of responses came from the Engineering Services segment (11.3%) where the average salary is $117,410. The highest average salary ($140,630) is paid to those in Management Consulting. The next five highest salaries are paid to professionals in these industry segments:

  • Oil & Gas Extraction – $127,570 (4.9% of respondents)
  • Petroleum Refining & Related Industries – $123,540 (6.6%)
  • Utilities – Combo (Nuclear/Fossil Fuel, etc.) – $118,310 (1.5%)
  • Engineering Services - $117,410 (11.3%)
  • Pharmaceuticals – $112,530 (4.5%)

For a complete list of salary breakdowns by job function, degree, regions, industry, etc., please visit: www.automation.com/salary_survey_2012.

Not a joiner? Think again!

Once again this year, the results indicate professionals who are members of some industry organization(s) pulled in higher salaries, on average, than those who are not members. For example, more than half of all respondents (51%) are ISA members, and their average salary is $110,000. Compare that to respondents who do not belong to any organizations (37.3%), whose average salary is $96,750. It pays to join and get involved with the ISA organization. To learn more about ISA membership, visit www.isa.org.

No shockers here

This is the first year we compared the salary of those with a Professional Engineering license to those without a license. It is no surprise that those with the license (15.8%) can command an average of $22,430 more each year, or an average salary of $123,120 versus $100,690 for those without the license.

As you would expect, the average salary consistently increases with years of professional work experience. Those professionals with two years or less experience are averaging $57,940 per year. On the other end of the spectrum, those with 31 or more years of experience are being paid an average of $117,650 per year. The great news is, over the course of your automation career, you can expect to more than double your income potential.

The average salary also consistently increases as your tenure with a company increases. The average salary of a professional who has been at his or her company for less than two years is $91,731. That compares to $114,850 for those who have been at their company for 21 or more years.

Does size matter? When it comes to company size, it does seem to matter. Smaller companies pay lower annual salaries. For those companies with fewer than 30 employees, the average annual salary is $92,670. When the size of the company exceeds 10,000 employees, the average annual salary is $121,390. The trend line is pretty consistent (linear) on each end of the curve; i.e., for companies with fewer than 100 employees and for companies with more than 500 employees. However, in the middle of the curve, for companies with 100 to 499 people, the average salary dips down a bit.

The bottom line is you can earn more money by working for a larger company and staying with that company for the duration of your career.

Talent is leaving the industry

And they are not leaving for greener pastures—they are just plain leaving. We are in the middle of a major skills shortage that is only going to get worse. Nearly half (46%) of those surveyed said they will be retiring in the next 15 years. Fifteen years may seem like a long time to some of you, but we are talking about a lot of talent just disappearing.

There is a silver lining, at least for the time being. 45.8% (down 3.2% from last year) of those respondents who said they will retire in the next 10 years indicate they will continue to work part-time or offer consulting services after retirement. And why not? As Consulting Engineers, professionals can earn $20,380 more per year than the average salary.

Raising hope for the profession

When asked if respondents would encourage their children to seek a profession similar to theirs, a respectable 72.6% said “Yes.” 18.5% said “No,” and 8.9% said the question was not applicable or they did not have kids. The mere fact that nearly three quarters of automation professionals would encourage their children to enter the field indicates a high level of job satisfaction and gives hope that we can fill the future skills gap.

Automation newbies still lack basic skills

The seasoned automation professionals are tasked with mentoring the young professionals who are just entering the field. Like last year, our survey indicates many young professionals who are joining the automation industry are missing some key skills. I believe there are a couple of factors contributing to this deficit. One: There are very few college programs that focus on automation and control engineering, so newbies are forced to learn on the job. Two: There are so many college engineering programs that still teach too much theory and not enough practical engineering skills. The onus is on manufacturing companies and industry to put pressure on colleges, urging them to offer curriculum better tailored to fill the skill gaps.

The top skill missing with new automation professionals is the understanding of automated processes—40.2% of survey respondents selected this skill as missing. The second most lacked skill, coming in at 32.4%, is business acumen. In third place, 30.2% said newbies are missing basic engineering principles.

Economic effects

Economic uncertainty remains in the near-term and long-term outlooks. However, the manufacturing sector has continued to do well over the last year. We asked our survey respondents to give us an idea of how the economy is affecting certain factors within their companies.

For the majority of respondents (higher than 50%), many factors like salary, bonuses, overtime, layoffs, and promotions remain unchanged. However, here are three positive signs within some companies:

  • 37.2% indicate hiring of new employees has increased.
  • 36% indicate salaries have increased.
  • 32.9% indicate overtime has increased.

Some employees may think of overtime as a bad thing, depending on how they are compensated. But overtime generally indicates companies are trying to accomplish more with their existing employees in order to meet higher demands. The fact that the demands are higher is a great thing.

Conclusion

There is no doubt we are experiencing a skills shortage in the manufacturing automation industry. As a result, the demand for and salaries of automation professionals continue to increase. These factors will certainly help attract young engineers and technicians to our profession. One problem is many young people just do not know about these opportunities. Many of us just happened upon this industry by chance. It is our individual responsibility, as well as the responsibility of the manufacturing industry as a whole, to raise awareness and encourage technical schools and colleges to modify their curriculum to fill the manufacturing skills gap. In the meantime, it is imperative we continue to encourage our children to enter technology fields and mentor those young professionals who have an interest in manufacturing and automation. Show the younger generations why we love our jobs so much. After all, what’s not to love? Technology, challenge, accomplishment … oh, and did I mention the pay is pretty good too.

More analysis of salary data

Because many of you are highly analytical, we published a number of salary related tables, charts, and graphs on Automation.com, including a breakdown of average salaries by regions within the U.S. There are literally hundreds of ways to analyze and compare the data, but we had to stop somewhere. Go to www.automation.com/salary_survey_2012, and see how you stack up.

ABOUT THE AUTHOR

Rick Zabel is vice president and publisher of Automation.com. A special “Thank You” goes out to all of you who took the time to complete our survey; and to Jessica Kooiman and Kia Weller at Automation.com for all their help compiling the survey data.

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