<p>I dont think it is so much of an argument as it is a discussion of career paths available to engineers and the variance in those paths across industries. </p>
<p>My point is certainly not to say that big oil will never lay anybody off. However, I do think that in comparison to other major industries the risk of such an occurrence is less. My reasoning behind this is simple, money. These companies are all among the most profitable corporations in the world. Even in hard times they have massive cash reserves to sustain their workforces. However much they may be tempted to cut jobs when oil prices are low, most of them restrain because they learned the hard way that the positions are hard to fill quickly.</p>
<p>True. I am with you on this. Choosing a job for the skill set you will acquire is a good thing to do. And yes, there is somewhat of an issue about the transferability of skills learned in the oil industry. In an increasingly tech based world the skills acquired in a high tech start up become far more valuable. However, my point was not really addressing this issue. </p>
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<p>Really? I would have to disagree. While the chance at becoming a millionaire by 30 in somewhat of a lottery type fashion is far more probable in the tech industry, the chances of becoming a millionaire by 30 in a systematic manner is far more probable working for big oil. For instance, if I am fresh out of school at 23 years old making 90K working for big oil – in all likelihood I have no spouse, no children, no mortgage, and very little holding me back from pursuing any number of risky investments. I now have 7 years until I hit 30 and a solid cash flow to work with. Assuming I am out on the rigs for the first 3-5 years I can expect my salary to hit 150K pretty quickly. A couple real estate investments, or even investments in start-ups could easily pan out to a multimillion dollar deal very quickly. On top of this, even if I’m a bad investor and I lose my *** in all my deals, I still am making more money than the kid who chose the start-up to begin with – who is likely making somewhere near 50K. On top of this, most start-up rich locations (San Fran, Boston, etc.) are exponentially more expensive places to live, which further decreases his take home. He takes far more risk and his potential for upside is hardly any better. Meanwhile, I know I’m not going to starve, have less stress worrying about my job hopping, and more time to focus on a systematic approach to my millionaire status My money begins to work for me quickly, and the kid at the start up might even be working for me.</p>
<p>Actually Sakky I wanted to see whether this financial-brain drain is localized at MIT or it is a widespread phenomena within elite engineering schools/programs. For example, Caltech is a great analog to MIT but I’m curious as to whether its graduates fill the same investment banking/consulting slots as MIT engineers. </p>
<p>Of course, I realize that is a sort of a circular argument based on “prestige” which dictates campus recruiting and ultimately employment slots. What is “prestigious” in terms of engineering isn’t always prestigious in terms of Wall Street–I say that hands down that GATech has a stronger engineering program than Harvard but I’m sure that Harvard is seen as much more prestigious as GATech in Wall Street. Hence, I’m sure there are much more Harvard minds on Wall Street than GATech. </p>
<p>Anyway my point is that it is one thing if ONLY MIT grads are flocking to Wall Street but it is another thing if engineering grads across the top programs are leaving as well.</p>
<p>And let me stop you right there - are you really going to be making that at ‘Big Oil’ as a 23-year-old right out of school? To be sure, I can agree you might make that working for one of the smaller, scrappier E&P contractors or service firms, but I think we agreed that those firms are far more volatile in terms of hiring and firing. </p>
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<p>Again, will you? We’re talking about Big Oil, not the oilfield service firms or the E&P’s. Big Oil salaries do not rise particularly quickly. </p>
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<p>This actually depends on the risk you’re willing to assume. Truly early-stage startups, I agree, will probably pay you 50k, or even less, but in exchange for a large dollop of equity. On the other hand, more established startups can pay you extremely well - often times even more than will the established firms - while still providing an excellent shot at riches. For example, in 2008, certain starting salaries at Facebook reportedly hit $92k (and Google countered with $95K, and up to $130k for those with master’s). And of course, nobody really joins Facebook for the salary, but rather for the bank-breaking IPO that everybody knows is coming. </p>
<p>What you seem to be comparing are the oilfield service/E&P jobs vs. the tech startups, and I would agree that there are comparable in many ways, both in terms of potential payoff, but also in terms of job volatility. Schlumberger, for example, recently cut 5000 jobs in just the first round of an expected series of layoffs. Baker Hughes has similarly laid off thousands.</p>
<p>Then, as I said, many Stanford engineering grads also left for Wall Street. Hence, you have the two most prominent engineering schools in the country.</p>
<p>The obvious counterargument to that is that those locations are expensive for a living - they’re very nice places to live. San Francisco is arguably the nicest city in the country, and Boston is arguably the nicest city in the East Coast (I think it’s a tie between Boston and NY). There’s an abundance of sites to see and things to do, culture galore, plenty of interesting people (i.e. girls) to meet. </p>
<p>Meanwhile, as a petroleum engineer, you’re…stuck on a rig. Often times offshore. For weeks at a time. Even when back onshore, you’re probably in a location that other people don’t really want to be (otherwise, they would have already moved there, driving up the cost of living). </p>
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<p>That is, unless we undergo 1999 all over again, when I remember the service companies seemed to be in nihilistic competition to see who could lay off the most people. Who’s to say that those days can’t come back? In fact, it already has, at least in the case of natural gas, whose prices have driven into the ground due to the surprising abundance of new discoveries lately. </p>
<p>Look, my point is not to denigrate Big Oil, nor the oilfield service or independent E&P firms. I certainly agree that they’re excellent career choices for some people. I also agree that other engineering industries should probably treat their employees more like the oil industry does today. </p>
<p>However, none of that speaks to the original point of this thread which is that, for years now, the best engineering students at the top schools such as MIT or Stanford have been highly attracted to non-engineering jobs such as finance or consulting. For that, I’ve always blamed the engineering industry as a whole for not providing stronger career opportunities.</p>
<p>Perhaps I missed the discussion about what Big Oil is? I could be mistaken here, as I am only moderately versed in the industry however, would you not consider ExxonMobils E&P division as part of big oil? In any case, I happen to have recently spoken to a recruiter at a big oil firm who implied the starting figures for refinery type positions and they are around 80K. I dont have the figures for the E&P positions, however, I can only guess they would be higher. Now, I guess there is the possibility that the recruiter was being unintentionally misleading or I misheard them but I doubt it. As for the rest of the comparison, if the 80K holds, same deal in my opinion. </p>
<p>As for the service contractors, I agree about the volatility and that was not where I was trying to make my point.</p>
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<p>My guess here is that Facebook is the exception, not the norm. I would be wildly surprised to find that there were lots of opportunities to make that kind of money at a start-up. I think you hit the nail on the head when you said
IMO, this is the reason that people go work for a start-up. While the payoffs can be great, it is almost a lottery type situation where you have very little control of the outcome. If your numbers arent pulled, you go play again, and again </p>
<p>Fair enough. My point was not to fuel an oil vs start-up competition, as I dont really think that one exists lol. However, I would argue that the starting salaries for the E&P positions do offer a way out of the rat race if you can parlay it into good investments. My brother lives in San Fran and makes around 70K, however, the cost of living is so incredibly high that after his monthly living expenses(and trust me hes not living plush), hes able to save $1000/month. The firm he works for is on the cutting edge of the industry he works in, and in his position specifically he has a great potential for upside with them. However, 1000/month is hardly enough to get out of the race quickly, which ties him intimately with his job. The real estate there is so expensive that hes having a hard time find something worth investing in for less than 400K, which to me is just absurd. My points in the above example were outlining a way to play the hand of a non-elite engineering job. My personal opinion is that all of these highly competitive fields (consulting, banking, Facebookesque start-ups, etc) are so attractive to people for the money but why not just bypass that whole mess if we are going to get to the same place in the end? If some firm wants to pay me 100K to go out on a rig and live in some no-name town in West Texas(where I pay no state income tax) and only 400/month for a cozy place to lay my head you can be damned sure that in five years I wont be punching the clock any longer. Then, Ill move to San Fran to enjoy the interesting girls youre meeting with enough money to take them on a date or two ;)</p>
<p>In any case, I understand your frustration about the top students leaving the engineering field. I agree that this is not only a problem for society, but also kind of sad.</p>
<p>E&P is even hiring now? Last I heard is that Chevron had a hiring freeze on certain business units. Conoco is letting people go. Shell is doing a total business reorganization at the upper-management level.</p>
<p>Twelve months ago is not <em>today</em>. My company is not hiring in any meaningful way.</p>
<p>CVX E&P is still hiring but mainly for international positions–there are only handful of slots for CNAP and those are going to past interns. Most hires will end up at ETC. XOM still has the same hiring targets from last year. Smaller oil companies like BHP-Billiton, Total and Marathon are still recruiting for E&P but the targets are down.</p>
<p>The independents, as expected, were hit the hardest–Devon is only looking at interns. </p>
<p>Sakky, I can attest that those are the typical salaries for some of the majors. CVX/BP/Shell would be 75-85k (not including sign on bonus) for facility engineers. The petroleum engineers can very easily hit 90k or so. XOM pays insane salaries, usually 10-20% higher than the competition. The typical big oil (majors) internship monthly salary is 4500 and can go up to 6500 in some cases (XOM). I had a few friends who made a borderline 6 figures–granted they were shipped off to Alaska.</p>
<p>A little caveat is that most of the people I am talking about were very qualified.</p>
<p>It really doesnt run the gamut of top engineering schools. Generally speaking, Ive found that this phenomenon happens at elite schools in a general sense, and specifically those with solid business programs. MIT and Stanford would be the classical examples, however, schools like Northwestern, Cornell, Berkeley, Michigan, and others have varying degrees of the same issue. I have not found this to be the case at numerous other good engineering programs. Gtech, for example, is arguably the best public engineering program outside of Berkeley, and theres no mass exodus to Wall Street from Gtech. Purdue, Illinois, and many, many others also fall into the same category as Gtech. So to answer your question, no, it is not happening all over the country from all the top engineering schools. There are very, very few of these highly coveted positions nationwide and you really cant even get your foot in the door for one of these positions without belonging to a very, very small population of students (a comprehensive list of the engineering programs that have this phenomenon would include maybe ten schools). Not only this, but out of that very, very small eligible population, you must belong to an even smaller population of the top students compared to your peers (who already top students in their own right). In a broad sense, its not that the supply of engineers is not sufficient for the engineering jobs available, but rather that the top students at the nations best schools are finding more attractive offers outside of engineering. Subsequently, it is an arguable case to say that society as a whole is suffering because we have some of our best human resources being applied where they may not contribute the most.</p>
<p>I would consider ExxonMobil to be only one member of BigOil - and clearly the exceptional member of that set. Nobody can presume that they will automatically obtain a job with ExxonMobil, or with any BigOil firm for that matter. It is entirely possible - indeed probable - to finish a chemical or petroleum engineering degree and be stuck working for a mediocre oil firm.</p>
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<p>Facebook (and Google) are no more the exception in the tech space than is ExxonMobil the exception in the BigOil Space. </p>
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<p>Here I would actually disagree, simply due to the sheer number of tech startups, as I mentioned before. There are literally thousands and thousands of tech startups, and while many (arguably most) probably pay less than average, that still leaves hundreds more that actually pay above-average. If you have marketable skills, you can probably find one of those firms. </p>
<p>That is, if you so desire. Many startup engineers deliberately choose to trade salary for equity. Whether doing so is wise or not is in the eye of the beholder. But certainly the option is available. Those engineers who simply want to make cash and forgo equity usually opt to work as contractors, making a hefty and guaranteed sum per hour worked. I remember a couple guys fresh out of school who were each making over $60 an hour. </p>
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<p>But you just highlighted the problem: you’re stuck in some no-name town in West Texas. Or, even worse, you’re stuck offshore somewhere in the Gulf of Mexico for weeks at a time. Let’s face it: that prospect is distinctly unappealing for most young, ambitious people. It basically feels like going to prison. </p>
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<p>I don’t know about anybody else, but I rarely meet women who are interested in only money. They’re more interested in men who, in their opinion, have had interesting lives and exciting stories to tell … and that rarely if ever involves being stuck on a rig in a no-name town in West Texas or offshore in the Gulf. (Maybe women should find those stories more interesting…but I digress). </p>
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<p>Trust me, I understand the oil industry just fine. I have never denied that those are indeed the salaries for some of the majors. The key word is some. Clearly not all or even the majority of jobs at the majors pay those sorts of scales. </p>
<p>My personal take is that if you were good enough to get one of those higher-end and higher-paying BigOil jobs, then frankly, you were probably also good enough to land an Ibanking or consulting job if you had attended one of the targeted elite schools, or to have successfully transferred to one of those targeted schools and then made your way to Ibanking or consulting. UTAustin is one of the target schools, and I don’t think it’s ridiculously hard to transfer to UTAustin.</p>
<p>As a case in point, I know one guy who graduated with an engineering degree from UTAustin yet who has never worked a single day in his life in engineering. Rather, after graduating, he spent 2 years at Goldman Sachs, then got his MBA at Harvard Business School, then joined a venture capital firm. Then went back to HBS to obtain his doctorate and now he’s a business school professor. Not once did he ever use his engineering degree for its purported purpose. Nor is he a lone exception - he recounts that quite a few of his UT engineering classmates never once worked as engineers, but instead became consultants or bankers.</p>
<p>I certainly agree, and clearly none of the above discussion holds for those who attend average/mediocre engineering programs. </p>
<p>Hence, allow me to say for the record that the vast majority of Americans who are interested in boosting their salaries and improving their standard of living should seriously consider obtaining proper education/skills and then moving to the Gulf Coast and finding a job in the oil/petrochemical industry. I myself have said on other threads: A guy who was merely a mediocre high school student may be able to earn a ChemE or MechE degree from some lower-tier school and then find an engineering job on the Gulf Coast paying $50-60k a year, which is a tremendously sweet deal considering that you can buy a house around Houston for 50k. {Granted, it won’t be a great house, but it’s still a house.} </p>
<p>I certainly also agree that those people who end up taking regular (i.e. non-startup) enginering jobs in Boston, SF, or NYC after college are getting screwed financially. They would have been financially far better off working as engineers in Texas. For example, I know quite a few guys who graduated from Berkeley and work in the refineries in the Bay Area. Financially speaking, they’re clearly getting shafted. They would have been far better off moving to Texas or Louisiana, where they would probably make higher salaries while having to pay far less in living costs. {But maybe the geographic beauty of the Bay Area provides sufficient compensation.} Nevertheless, I certainly agree that the oil industry is a killer deal for the average American, and I’m surprised that more people don’t pursue that opportunity.</p>
<p>But none of that speaks to the issue at hand in this thread, which is what happens to the very best students at the *very best * engineering schools such as MIT or Stanford for which consulting and finance truly are viable career options and against which the engineering firms don’t seem to be able to compete strongly. Hence, the engineering industry suffers from constant brain-drain of the very best students.</p>
<p>16% still looking for employment after graduation. 14% pursuing other endeavors(part of which will be legitimate and part will not be). In the list of careers, it is true that many got decent jobs like an ASIC designer which is certainly a solid start from any school, but about 15% of the positions were jobs you take out of desperation. I’m reading that berekely engineers are taking intro level programming jobs and intern jobs?!..in the heart of Silicon valley. Also there were a number of finance jobs, and not all of them were at Goldman. Some of them were just regular old finance jobs. This list actually scared me and depressed me as an engineer. Seriously, what are you reading that I’m not…I ask this sincerely.</p>
<p>With rougly 25% of Berekely’s engineering not finding reasonable jobs in 2007, I still say these engineers are open to finance because of the lack of good engineering jobs. These finance companies weren’t stealing. The good engineering jobs were not there for a number students at even berekely. You’d never have seen a list like this at any one of the top 20 engineering schools in 1999. There would be 90% to 95% employment.</p>
<p>More than likely, those who just took regular old finance jobs were one of the following.</p>
<p>1.)Students who went into engineering because they thought the degree from Berkeley would be able to land them that position, and when it didnt (bc truthfully most students cant), they thought they would try to break into finance however they could.
2.)Students who, while surrounded by a number of classmates enamored with finance, then too became enamored with the prestige of the banking world unknowingly took an offer that they might have thought is going to eventually lead to this prestigious world, but it wont.</p>
<p>The fact of the matter here is that these jobs at the heart of the topic of this thread are virtually unattainable for most people (even Berkeley engineering students). Undoubtedly, those who get picked up from Berkeley engineering are at the top of their class with a plethora of achievements outside of school as well. These are NOT fallback positions. The root of the topic at hand lies soundly grounded in this fact.</p>
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<p>Probably the reason that these students dont find jobs suitable for them is because they carry some entitled mentality (whether deserved or not), that they should have better job prospects than they actually do. Its a sobering realization when a student becomes aware of the fact that they have worked hard for the last 16 years in school only to take a job that they really dont want. Hence, they hold out and see if they can find something better down the road. After all, there is a very limited supply of these decent jobs to go around. Obviously, there are going to be the bottom 20% of the class (yes, it happens even at Berkeley) and if Im a hiring manager, why do I chose a bottom 20% student at Berkeley over a top 20% student at ASU? The answer is most likely that I dont. And perhaps the student was actually a decent student at Berkeley who was just dead set on getting his/her dream job, and that dream just didnt materialize for whatever reason (perhaps bad communication skills), and they then refuse to settle right away for one of these non-decent jobs. I have a feeling that these are the primary reasons that you see the stats you do. I tend to agree that most, if not all, students at Berkeley will be able to find a job. Whether or not they are willing to take the offer they get really depends on their situation.</p>
<p>How can you disagree with what the pay scales tell? Again, perhaps I am misinformed here, but it seems like many, dare I say most of the jobs in Big Oil firms ARE WITH majors? After all, this is the same oligopoly we talked about earlier, isn’t it? 80K seems to be the going rate for a facilities position (not even one at XOM), which, as you know aren’t even the high paying jobs. Yet, I would certainly assume they are the most common positions to work in for engineering graduates.</p>
<p>As you can see, majors don’t encompass some vast list of companies to work for. In fact, as we spoke about earlier – this list is rather small. </p>
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<p>Well, as much as like to think highly of myself – it was never a question of whether or not “I” (meaning literally, me) could attend one of these target schools for Ibanking, I couldn’t have. In fact, I go to a school where, up until just recently they didn’t even require an SAT score if I’m not mistaken. I am a “decent” student here, not even close to the top of the class – yet, the prospect of Big Oil IS a reality for me. So, as complimentary as your comment here is I have to disagree. Perhaps I could transfer to UT but that is the end of the rope for your example – I can’t think of another school I could transfer to.</p>
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<p>This must be why all of the girl’s eyes glaze over when I start talking then??..lol. In any case, I really would have very little interest talking to a woman who likes to talk about their man’s “interesting lives and exciting stories” when they work in finance or consulting. In fact, I’m dead sure that I could sell an Alaskan oil venture as a more intriguing story than I could “Joe, the guy who worked in the cubicle next to me…” My comment about the money in San Fran wasn’t that the money could get me the girls there – only that, at that point, I could actually afford to show them around San Fran.</p>
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<p>I would have to say that this is solely grounded in personal opinion. Yes, I can appreciate the fact that it’s not for everybody. However, for some it is certainly more appealing than cramped studio living, and long hours in front of a computer screen hacking away on spreadsheets. </p>
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<p>Yes, maybe Oil in general – but not Big Oil or as we have defined “majors”.</p>
<p>“1. This engineering to IBD comparison is a bit tired. We graduate 85K engineers a year. How many new-hire IBD positions exist?”</p>
<p>Exactly. They hire at only a small handful of engineering schools, for only a few positions, relatively speaking.</p>
<p>Plus, it’s not like they are just swooping in taking the best engineers only, they are swooping in and taking the best talent they can get from liberal arts colleges much moreso. And business schools too. They overpay vs. industries/ fields generally, not just engineering.</p>
<p>If they are hiring an english, history, anthropology major- which they do more often than engineers- it’s a pretty safe bet they are paying those individuals more than their alternative employers were going to pay them, also. Ditto the accounting and finance majors they hire. They overpay vs. everyplace, for everyone, not just engineering firms, for engineers.</p>
<p>But for most engineers, good luck trying to get one of those jobs, even if you want one. Which most don’t anyway, their skill sets and personalities frequently don’t match these jobs.</p>
<p>IMO a lot of engineering types who become swayed by the apparent big money would be better off in the long run just staying closer to what they are actually comfortable with and good at. The banking firms are predominantly run by arts & sciences types, it can be very frustrating being a staff guy, taking orders from people who can’t do what you do. After a while lots of these people don’t really like their jobs, in these respects, I can attest to that. And it’s true one has to perform almost everyplace these days, but at least one bank I’m familiar with, which gets a lot of press, deliberately overhired and pushed the lowest x% out every year, the engineering outfits I worked for didn’t do that.</p>
<p>“But you just highlighted the problem: you’re stuck in some no-name town in West Texas. Or, even worse, you’re stuck offshore somewhere in the Gulf of Mexico for weeks at a time. Let’s face it: that prospect is distinctly unappealing for most young, ambitious people. It basically feels like going to prison.”</p>
<p>Not really–it depends on your discipline. Unless you are Drilling and Completions, you’ll typically start off in a desk job at Houston for a few years with interlaced visits to field visits and career development workshops. Reservoir engineers typically will remain at desk-jobs. Anyway after your graduate/horizions/rotation training you can choose where to go.The degree of field work really depends on your preference but it is a double-edged sword, if you want to rise up the ranks you should take as many international opportunities as you can. </p>
<p>Of course the feeling like a prison is a very personal choice–I have found that the majority of young male engineers really enjoy being out in Bakersfield or on site due to the camaraderie. On the same token, I know many engineers who find a desk-job as a godforsaken prison filed with boredom. </p>
<p>Anyway, while a small percentage of elite engineering students are entering banking/consulting, I think it is inevitable and no cause for widespread concern. The top firms recruit at “prestigious” schools and will of course throw high salaries to lure engineers–how else Could these talents be more “efficient” somewhere else? Probably. </p>
<p>Yet the concept of optimizing society for it’s lowest energy and maximum good is at odds to the individual freedom of the student. We could make the very same argument about dwindling nurses, the lack of medical scientists staying within academic medicine or even physicians who leave hospitals for private practice. To be honest, just because you graduate with a degree in X doesn’t mean you need to work in X. I know plenty of engineers who are so burnt out or demoralized by engineering programs that the though of an engineering career abhors them. Other students might go into engineering just because of the skill-set and career spring-boarding option. The point is that college is just an education and the student has all the freedom of choice to pursue any avenue they want. Ideally, they a top technical mind would revolutionize some scientific field but heck, if they would be much happier making origami, so be it.</p>
<p>Yes, while the financial service industry might have a dubious role in the “general welfare” of society, especially accentuated by the recent meltdown, it still doesn’t mean engineers shouldn’t have the choice to enter the ranks.</p>
<p>In the Berekely list sakky showed. Morgan Stanely, Goldman, and merrill lynch each took 1 or 2 Electrical Engineers and hired them as analyts. Also one of the analysts that Goldman hired was a technical analyst. This could actually be a genuine computer engineering job. One of those jobs where there is one stock traded on two different markets and sometimes you make money buying on market and selling to the next. They hire computer engineers to write programs and do this work. The point is that this is no real drain of talent…its a drop in the bucket. It is hard to say these investment banks are stealing engineering talent when a number of berekely engineers aren’t really finding great engineering jobs and these investment banks are only taking a handful of engineers.</p>
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<p>As an engineer I couldn’t agree more, and I bet a number of engineers would say the same thing. If I’m an engineer being offered a VLSI design or ASIC design job at major company, I’m personally not interested in the investment banking job. I also just don’t think the Investment banking career path is that much better than a career path in engineering(if you get a good start in a good company). This is why a genuinely think that some of these engineers are taking the investment banking job because they are not getting the VLSI design job at a good engineering company.</p>
Sakky, I agree with most of what you write. I disagree quite heavily with this statement though. You are so focused on the top 1% you don’t know what a good deal is for the top 5%.</p>
<p>An oil industry job is a great deal for someone at the 95th percentile of this country, not just the “average”. When I look at where I ended up I think that there are very few jobs I could have gotten better than my upstream E&P job. For someone with a 98th percentile intellect one is looking at Banking/Consulting/High Tech career tracks. Or other far more risky endeavors like starting a business, etc.</p>
My money begins to work for me quickly, and the kid at the start up might even be working for me.</p>