Civil engineers report salary gains, but cracks appear in many firms’ financial foundation.
The economic uncertainty that loomed on the horizon early last year came into clearer view late in 2008 and early in 2009. And it’s an ugly vision. Although the civil engineering profession has not been devastated as much as other industries, it has not escaped unscathed. Cracks in many firms’ traditionally solid salary, bonus, and benefits programs are evident in the results of the CE News 11th Annual Salary Survey, a snapshot of civil engineers’ compensation taken earlier this year.
For example, an average of 29 percent of survey respondents who work for private firms reported experiencing a decrease in or elimination of their annual bonus, 34 percent said salaries were frozen (no raises), and 10 percent reported pay cuts. The situation was less extreme for respondents employed in the public sector, where, on average, only 4 percent experienced a decrease in or elimination of their annual bonus, 23 percent said salaries were frozen (no raises), and 4 percent reported pay cuts.
In general, at the time of the survey, a smaller proportion of respondents working at larger, private-sector firms reported compensation cuts, compared with those employed at smaller firms (see Figure 1). This may be explained, in part, by a stronger financial foundation and greater work backlog at larger firms, helped by a larger array of service capabilities and broader geographic exposure that softens recessionary impacts, at least temporarily.
In the public sector, on the other hand, a greater proportion of respondents working for larger cities or agencies experienced salary freezes, compared with those employed at smaller public organizations (see Figure 2). Pay cuts and bonus decreases were less of a concern for public-sector civil engineers, in part because fewer public-sector employees (less than 30 percent) receive bonuses.
Unfortunately, a measure of how layoffs caused by the economic downturn have impacted civil engineers in the private and public sectors is not captured adequately by the CE News survey because most unemployed individuals would not have received invitations to participate in the survey (see "Survey Method" below). However, according to ZwiegWhite’s 2009 Financial Performance Survey, half of architecture, engineering, and environmental consulting firms cut staff in 2008. The median staff reduction was 7.7 percent.
Nevertheless, median salaries (not including bonuses) increased, at least marginally, during the last year for private-sector civil engineers at most levels of experience (see Figure 3), according to survey respondents. Median salaries for respondents with two to four years, 15 to 25 years, and more than 30 years of experience showed large increases. Contrary to the general trend for older workers, median salaries for respondents with 25 to 30 years of experience decreased, as did those for civil engineers with less than two years of experience and four to seven years of experience.
Table 1 lists median salary, bonus, and raise data reported by survey respondents in the private and public sectors in nine experience categories. Additionally, first (Q1) and third quartile (Q3) salaries provide a range within which 50 percent of reported salaries fall.
Of particular note, median bonuses decreased this year between 10 percent and 58 percent for private-sector respondents in seven of the nine experience-level categories, compared with last year’s survey. Entry-level respondents (zero to two years of experience) saw the deepest cuts in both median bonus (down 58 percent) and salary (down 11 percent). Respondents with 15 to 20 years and 25 to 30 years of experience reported increases in median bonus.
However, fewer respondents in all experience-level categories reported receiving a bonus or a raise during the last year, especially those in the private sector. In 2008, 76 percent of private-sector respondents overall said they received a bonus during the previous year. Only 63 percent of private-sector respondents reported such compensation in this year’s survey. Likewise, in 2008, 81 percent of private-sector respondents reported getting a raise during the previous year. This year only 63 percent reported raises, and the raise amounts were lower by about 1 percent.
On the public-sector side, about the same proportion of respondents (29 percent) said they received a bonus during the last year and in the 2008 survey (28 percent). However, fewer respondents in the public sector this year reported getting raises—82 percent versus 90 percent in 2008. But for those who received raises, the rates were almost identical to the previous year, ranging from 3.0 percent to 5.0 percent.
These private- and public-sector trends are also evident by examining salary, bonus, and raise data by position or title (see Table 2). For example, 90 percent of assistant city engineers, 81 percent of city engineers, and 80 percent of county engineers reported receiving raises within the last year. Among private firm managers, significantly fewer principals, vice presidents, and presidents/CEOs/owners reported receiving raises than did firm staff. Additionally, more presidents/CEOs/owners, senior associates, and project managers took hits when it came time for bonus payouts. The proportion of civil engineers in these positions who received bonuses were lower by 23 percentage points, 17 points, and 21 points, respectively. However, median bonuses received by survey respondents in these positions increased by 20 percent, 80 percent, and 40 percent, respectively.
Smaller financial gains, however, have not lessened the workload for many civil engineers. In both the private and public sectors, more respondents to this year’s survey said they were working, on average, more hours per week than respondents to the 2004 CE News survey claimed. For civil engineers in the private sector, fewer report average work weeks of 41 to 45 hours and more say they are working 46 to 55 hours (see Figure 4). In the public sector, the greatest shift during the last five years is from 40 hours per week to 41 to 45 hours per week (see Figure 5).
Despite longer work weeks, fewer and smaller raises and bonuses, salary freezes, and even pay cuts, most survey respondents said they were satisfied or very satisfied with their earnings. This year, a greater proportion of civil engineers in most experience categories in both the private and public sectors expressed satisfaction with earnings compared with last year (see Figure 6). Exceptions include respondents in the private sector with four to 15 years of experience and those in the public sector with four to 10 years and 25 to 30 years of experience.
Given the job losses experienced within many civil engineering firms and the widespread recession that has hit the construction industry particularly hard, satisfaction with earnings is a reasonable response for those who have retained their jobs.
Repairing the cracks
Although the current economic situation has certainly cracked the financial foundation of many civil engineering firms and the professionals they employ, anecdotal evidence suggests that spending from the American Recovery and Reinvestment Act is beginning to shore up the industry. According to Sanjay Sathe, CEO of RiseSmart, a job search website and human resources service provider, over the next two years, civil engineering and urban planning will be among the top six white-collar occupations that should see an upsurge in demand. "Thousands of civil engineers will be needed to design and supervise the construction of roads, bridges, tunnels, buildings, wind turbines, and other projects that get a green light as a result of the stimulus package," he said. "The government employs about 12 percent of the nation’s engineers; the rest work in private industry."
The relative timing of individual salary reviews (earlier or later in the year), worsening economic conditions in different parts of the country—which moved some firms to cut or freeze salaries—and of this "snapshot" survey certainly impacted reported salary increases and bonuses, both the number of employees who received them and the amounts. Next year’s CE News Salary Survey is likely to provide an even clearer picture of how the deep recession affected compensation for civil engineering professionals, and hopefully, how the recovery is progressing.
SIDEBAR: Survey method
Invitations to participate in the CE News 11th Annual Salary Survey were e-mailed in February 2009 to more than 33,300 subscribers to Civil Connection and Structural Engineer eNews (e-mail newsletters that includes CE News and Structural Engineer subscribers, as well as others). Of the 10,427 e-mails that were opened (21 percent), 2,095 people launched the online survey. The survey remained open for four weeks, and during that time we received 1,645 completed records. For this analysis, we separated the data provided by civil engineers (44 percent of the responses) from the structural engineers’ data, which is reported in the June issue of Structural Engineer.
After cleaning up the civil engineering data, 792 responses were analyzed—490 from employees in the private sector, 265 from public-sector employees, and 37 self-employed civil engineers. Specifically, the data presented in this article represents full-time employees who responded positively to the statement, "I primarily engage in the civil engineering profession, which includes design, management, and construction of projects in disciplines such as, but not limited to, transportation engineering, utility engineering, land development, geotechnical engineering, environmental engineering, and/or land surveying."