<p>This is an old clip from the 1950s of the president of NYU. In this clip, they were discussing the shortage of engineers and the demand for them. It is also interesting to note that engineering was always an lucrative career since it is mentioned in the vide of how an engineer grad has opportunities after college.</p>
<p>Fast forward to 3:16</p>
<p>YouTube</a> - LONGINES CHRONOSCOPE WITH DR. HENRY T. HEALD</p>
<p>Well, that claim was probably true in the 1950s, if we consider the rapid expansion of US manufacturing and industry immediately after WWII.</p>
<p>Yeah, there’s always a shortage at the low salaries they want to pay.</p>
<p>It’s only low to the students at the top schools. For the average student, it’s considered a relatively high salary. I don’t see those grads passing up engineering jobs for other positions.</p>
<p>@ken285:</p>
<p>If the engineering students at the top schools consider the wages offered by engineering firms to be low, then that might suggest there is a/are problem(s) within that labor market, presumably on the part of engineering firms and their apparent unwillingness to offer higher wages. Within a natural labor market, with as little outside intervention as possible, higher wage offers would take care of labor shortages within a reasonable amount of time.</p>
<p>One has to wonder why do engineering firms hire average students when these firms may always offer higher wages to attract top talent. Additionally, why are engineering salaries so low despite years, perhaps decades, of “shortages”? Starting offers for engineers should be well over $150k already if these “serious shortages that may threaten the US economy” are true!</p>
<p>I don’t know the answer of course, so the following is all speculation.</p>
<p>What if these firms don’t need the value (or supposed value) that the upper echelon of grads have? Can companies develop engineers that can satisfactorily perform their duties mainly though internal training and not rely on employee “talent” and previous schooling? In other words, employers see recent engineering grads as commodities.</p>
<p>Brainfood:</p>
<p>
</p>
<p>[Scientists</a> and Engineers in Short Supply? Not Likely - Brainstorm - The Chronicle of Higher Education](<a href=“http://chronicle.com/blogPost/scientists-and-engineers-in-short-supply-not-likely/5783]Scientists”>http://chronicle.com/blogPost/scientists-and-engineers-in-short-supply-not-likely/5783)</p>
<p>Additional reading:</p>
<p>[Scientist</a> shortage? Maybe not - USATODAY.com](<a href=“http://www.usatoday.com/tech/science/2009-07-08-science-engineer-jobs_N.htm]Scientist”>http://www.usatoday.com/tech/science/2009-07-08-science-engineer-jobs_N.htm)
[Study:</a> No Shortage of U.S. Engineers - BusinessWeek](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)
[What</a> Shortage of Scientists and Engineers? - NYTimes.com](<a href=“http://tierneylab.blogs.nytimes.com/2008/10/17/what-shortage-of-scientists-and-engineers/]What”>What Shortage of Scientists and Engineers? - The New York Times)</p>
<p>The “shortage of engineers” stuff is nonsense. These days, when a company says it can’t find engineers to fill positions, they mean engineers with the precise experience and education they are looking for. When the company I worked for last year went out of business after 10 years, I found that the only responses I got on my job hunt were for positions I was almost perfectly qualified for in terms of experience. And I’ve had a good reputation everywhere I’ve worked. Unless you are a 100% match for the long list of qualifications and experience they demand, don’t even bother applying. Unless, that is, you are the graduate of an MIT-level school (which I’m not). There is always a shortage of MIT grads.</p>
<p>I’m sure that is true of recent grads as well. If any company talks about a shortage of recent grads to hire, you can take that to mean a shortage of the only type of grad they are willing to hire… guys either graduating from top schools or at the top of their class at a lesser school.</p>
<p>
</p>
<p>Unfortunately, with the important exception of CS/software, that doesn’t seem to be true: MIT-level recent graduates do not seem to be paid significantly higher than are graduates from lesser-ranked schools. Much of the increase that does exist can be explained by either pure cost-of-living concerns, as MIT graduates tend to stay in the Northeast which is a rather expensive location, or by the fact that many MIT-level graduates take higher-paying *non-*engineering jobs, which means that the engineering jobs do not pay comparatively impressively. Heck, it is not uncommon for certain disciplines at MIT-level schools such as chemical engineering to actually pay less than the national average for that discipline. That’s right - less. You would think that if a true shortage of MIT-level engineers exist, firms would be paying more, not less. </p>
<p>
</p>
<p>Yet the irony is that these firms do seem to need the perceived expertise of those graduates - and will pay handsomely for the privilege - but apparently only if that expertise is packaged differently and channeled through an alternative firm budgetary process. Many of the very same engineering firms who refuse to pay a premium for top engineering graduates seem to have no compunction paying through the nose for consulting engagements with high-priced consulting firms, including tech consulting firms, who then turn around and employ the very same top engineering graduates who those client firms had refused to pay an engineering salary premium in the first place.</p>
<p>I know a guy who graduated from MIT and was offered a job at an engineering firm, but whose hiring manager was barred from offering much of a salary premium for internal organizational reasons (in other words, doing so would have instigated an internecine political battle that he lacked the political capital to win). So the guy joined a higher-paying consulting firm instead, where not only was one of his very first projects for the very same engineering company who had originally tried to hire him, it involved many of the same tasks - he even ended up providing many of the project’s deliverables to that original hiring manager. They even met for lunch one day, where that manager candidly acknowledged that the consulting salary was better than anything he was allowed to pay. </p>
<p>What makes the story all the more remarkable is that the company in question, in an effort to save money, surely and ironically ended up losing money than if they had simply hired him directly. Not only did they have to pay him a hefty salary premium anyway, they also had to pay for the fat overhead margins of the consulting firm itself. Perhaps the justification is that those funds come from an external ‘consulting’ budget, which is different (and apparently far larger and less scrutinized) from the standard engineering human resources budget. But that points to a dysfunction within the firm’s internal processes, a characteristic that seems to be remarkably common in today’s firms. </p>
<p>Or perhaps what we are witnessing is the ultimate triumph of marketing. The green eyeshade-types who would never dare to pay a premium for top-flight engineering talent under the notion of budgetary rationality become misty-eyed when tempted with such slick verbiage as ‘technology strategy’, ‘innovation engineering’, ‘process velocity’ or old catch-all standby term of ‘culture’, none of which are well-defined. Indeed, it is precisely that linguistic ambiguity that may imbue those phrases with their power, as they can seemingly be used to mean anything that the perpetrators want them to mean. </p>
<p>Yet at the end of the day, many engineers-turned-consultants end up performing tasks not dissimilar to those of regular engineers - but for far higher pay. For whatever reason, engineering firms do want name-brand engineering talent, and they are willing to pay for it, but apparently just not when they’re labeled engineers.</p>
<p>
What’s the nature of the business? It sounds like the engineering firm only needed an engineer for some work to be done for a single project or for a finite amount of time? Did they not need someone on a full-time basis? What did the engineering firm do instead of hiring the said person? Did they hire somebody else or nobody at all? </p>
<p>If you only need a car for a month, why lease one when you can rent one? It’s the same reason why many real estate developers don’t have in-house architects and engineers.</p>
<p>As you said Sakky, there’s also the marketing aspect of it. Consultants are considered to be experts in his or her field, while engineers are just engineers. Liability may also be a factor in hiring engineers. Perhaps the company wants to minimize their exposure to risk and sub out the design instead.</p>
<p>
</p>
<p>Auto manufacturing.</p>
<p>
</p>
<p>Let me put it to you this way. At the time that the guy I know had joined the consulting firm, the consulting project in question had already been going on for years, and continued long after he was cycled to a different project. {The project may finally have finished now, I don’t know.} Let’s be perfectly honest - nowadays, many (almost certainly most) people are unlikely to work for their very first post-college employer for more than a few years anyway before they’re either laid off, jump to a better job at another company, or move on to graduate school (i.e. an MS or MBA program). Companies should therefore understand that many entry-level employees are essentially ‘temporary’ hires, and if they fail to understand that, then that speaks to a fundamental dysfunction in organizational learning. </p>
<p>
</p>
<p>That I don’t know for sure. I suspect they instead offered the job to an engineering graduate from an average school. </p>
<p>
</p>
<p>But why would you rent a car for years on end, if you could lease? Plenty of consulting engagements go on for many years, and indeed, those are precisely the engagements that consulting firms desire to sell the most, because of the rivers of income that they produce. </p>
<p>
</p>
<p>Which makes it all the more remarkable that graduates fresh out of college can be considered to be ‘experts’ - and are paid as such - simply by virtue of being labeled as ‘consultants’. And the clients have to know by now that the ‘consulting expertise’ they are paying for is largely generated by fresh college graduates. Like I said, the hiring manager knew the guy who turned down his job offer only to encounter him again as packaged in a consulting engagement. </p>
<p>
</p>
<p>That may be true, but that doesn’t then explain why traditional engineering outsourcing firms do not pay their employees particularly well. For example, while HP outsources the design of its laptops to a (almost certainly Asian) OEM, it’s not as if the latter pays its engineers more than HP pays theirs - in fact, they almost certainly pay less. Low cost (and perhaps the accompanying transfer of liability) are the usual drivers of engineering outsourcing. </p>
<p>But when the label ‘consulting’ is invoked, the economic calculus is turned on its head. Firms can outsource work to firms that pay their employees much more - as long as that work is deemed to be of a ‘consulting’ nature. </p>
<p>The bottom line is that top engineering students who want to maximize their earnings potential probably shouldn’t label themselves as engineers at all, but rather as ‘consultants’ (or perhaps as financial engineers).</p>