Is your salary growing fast enough?

June 2006 » Exclusive
The 8th Annual CE News Civil Engineering Salary Survey documents a vital profession.
Bob Drake

The 8th Annual CE News Civil Engineering Salary Survey documents a vital profession

Following healthy growth in 2005, construction spending across the country continues to increase. While some of the increase is paying for higher-priced construction materials, inflation has not totally overshadowed real market growth. According to an exclusive ZweigWhite survey, the architecture, engineering, and construction (AEC) business outperformed the U.S. economy as a whole in 2005, and almost three-fourths of firm leaders surveyed expect the AEC business to repeat this performance in 2006. This is proving to be good news for civil engineers, both in terms of professional opportunities and income growth. Overall, respondents to the 8th Annual CE News Civil Engineering Salary Survey reported larger gains in median salaries, bonuses, and benefits, compared with last year's survey, with another banner year underway in most areas.

According to ZweigWhite's 2006 AEC Industry Outlook, hot markets this year should include several sectors that are heavily civil engineering dependent—highways and bridges, transit, and municipal water and wastewater. The U.S. Census Bureau reported recently that construction spending in March 2006 reached a seasonally adjusted annual rate of $1.2 trillion, the ninth straight record month and an 8.4 percent increase compared with March 2005. "On a year-to-date basis, the gain was 9.2 percent compared to the January- March 2005 period," said Ken Simonson, chief economist of The Associated General Contractors of America. "Moreover, there was great balance among the major sectors.

Private nonresidential construction was up 10.6 percent year-to-date, while private residential and public construction each gained 8.8 percent. Although private residential construction is expected to slow later this year, it hasn't happened yet." Knowing that it's been a good year for the AEC industry, we dug into the data collected from the Civil Engineering Salary Survey to see if civil engineers' compensation grew as expected and to see where it stands at this point.

Results

The growing construction market has supported salary growth at most civil engineering firms. Eighty-four percent of respondents to CE News' survey reported receiving a raise during the past 12 months. While the overall median raise was 4.2 percent, a breakdown by private- and public-sector employees and by years of experience shows that private-sector civil engineers who received raises got a larger boost at almost all experience levels, compared with their public-sector counterparts (see Table 1). However, for all except the 5-7 year and 8-10 year experience levels, a greater percentage of the public-sector engineers reported receiving raises.

Years of experience and employment sector, however, are not the only differentiating factors in total monetary compensation (salary plus bonus) for civil engineers.

Licensure also appears to play a key role.

View Table 1 (New window)

According to survey data, Professional Engineers (P.E.s) command an almost 25 percent premium at all experience levels compared with engineers with no registration (see Figure 1). However, survey data does not indicate clearly whether engineers who obtained their P.E. registration received a 25-percent raise or comparable bonus, or if some or the entire premium results from a more rapid ascendance into management positions. For this article, we did not analyze the relation, if any, between licensure and job title.

View Figure 1 (New window)

Firm size also may influence median salary. Following are the median salaries for civil engineers working in private-sector firms of different sizes (Sufficient data was not available for all firm-size categories):

• two to five employees—$68,000;
• 11 to 20 employees—$70,350;
• 21 to 40 employees—$75,000;
• 41 to 75 employees—$72,317;
• 76 to 125 employees—$73,500;
• 126 to 299 employees—$75,000;
• 300 to 499 employees—$78,550; and
• 10,000+ employees—$91.000.

View Figure 2 (New window)

Median salaries of private-sector civil engineers responding to the CE News survey increased by a wider margin in 2006, compared with changes from 2004 to 2005 (see Figure 2). The jump in median salary is particularly pronounced for respondents with 5-7 years and 11 years or more of experience. In addition, salaries for entry-level engineers (0-2 years of experience) increased significantly, by about 7 percent, perhaps reflecting the optimism of firm leaders about business prospects and, consequently, their need to increase personnel to accommodate future growth.

By contrast, data from public-sector respondents with seven years or less of experience indicated slightly lower median salaries in 2006 compared with 2005.

However, a low number of responses (49) from this group probably accounts for the apparent decline in salaries. In all other experience-level brackets, public-sector median salaries increased modestly.

View Figure 3 (New window)

The other component of total monetary compensation—bonuses—also increased significantly in 2006 for private-sector civil engineers responding to the survey. For the second year in a row, the percentage of these respondents who received a bonus increased; and at almost all experience levels, the amount of the median bonus increased as well (see Table 1 and Figure 3). Results for public-sector respondents were mixed, and median bonus amounts continue to lag behind those received by private-sector engineers in most experience brackets, particularly for those with eight or more years in the business.

View Figure 4 (New window)

Median bonus increases are particularly impressive for private-sector respondents with 16-20 years and 26 or more years of experience (Figure 3). Note also that bonuses comprise a greater proportion of total compensation for these industry stalwarts—8 percent or more—compared with about 4 percent of compensation for younger employees (see Figure 4).

While this delivers greater rewards to experienced engineers during profitable years, it also increases the risk of greater total compensation fluctuations resulting from business downturns.

One survey respondent extolled the knowledge base and perspective that older, experienced engineers bring to the business.

"I've had senior engineers pull out old resources on railroad design, for instance, which are now out of print. Had it not been for the 'oldtimer' being in the office, we wouldn't have had a design resource. It scares me a little when I learn of a rule of thumb or an industry accepted practice which is not readily found in common resources. What would I have designed had I not been told of this rule of thumb?" While public-sector civil engineers may receive comparatively minimal bonuses and generally lower salaries, they can claim a potential advantage in retirement benefits.

View Table 2 (New window)

Eighty-two percent of public-sector respondents said that they were eligible for employer-provided pensions, and 47 percent said that their employers offered deferred compensation benefits, compared with 4 percent and 2 percent, respectively, of private-sector respondents (see Table 2). The most popular retirement benefit offered to private-sector respondents is a 401(k) with some level of company match.

About 5 percent of private-sector civil engineers reported that their employers do not offer any retirement benefits. Of this group, 27 percent are self employed and 47 percent work for small firms with two to five employees.

What's in a name? Table 3 provides information about the median salaries and bonuses reported by civil engineers working in different capacities within the private and public sectors.

View Table 3 (Not available at this time)

For the titles surveyed, there is a fairly narrow range from the top to the bottom of the median salary scale. Median salary at the highest paid position—president/CEO/owner—is only about twice that of the lowest position surveyed—staff/design engineer (see Table 3). The bonus spread, however, is significantly greater. The president/CEO/owner median bonus is more than 20 times greater than that reported by staff/design engineers, and a significantly greater percentage of engineers in management and executive positions receive bonuses compared with staff and design engineers.

View Table 4 (New window)

Understandably, the larger salaries and bonuses come with greater responsibilities (see Table 4).

More than 67 percent of executives—senior associate, vice president, president/CEO/owner, and principal—include client presentations, public meetings and presentations, contract writing, fee negotiations, and internal staff management as their job duties. Fewer than 33 percent of staff/design engineers claim the same duties.

Of course, for small firms and selfemployed civil engineers, such a clear division of duties doesn't exist, nor is the compensation as high. Self-employed survey respondents reported a median salary of $90,000 and median total compensation (salary plus bonus) of $100,000. Total annual compensation for self-employed civil engineers responding to the survey ranged from $40,000 to $235,000.

However, one self-employed respondent complained that the CE News survey did not adequately measure this sector of the industry.

View Table 5 (New window)

"Please revise this survey!" the respondent said. "Many of us (surveyors) are one-man shops with our income fluctuating based on our revenue each year. We don't all work for someone else or even our own company. I take money out of the business as I can. I have never written myself a paycheck. You're missing a certain group of people that earn a great deal of money." More than money Self-employed engineers may enjoy a level of freedom not available in larger firms; however, even small- to mediumsized civil engineering firms increasingly are offering employees a range of attractive fringe benefits. The ranking in this year's Top 10 fringe benefits (Table 5) are identical to last year's list with one exception: Cell phone or phone allowance surpassed flexible scheduling by a narrow margin to take over the fourth spot.

In addition to communication, engineering firms appear to be increasing emphasis on employee training and education.

The percentage of survey respondents who indicated that their employers offered paid professional registration, paid training for continuing education units/professional development hours, and tuition reimbursement—the top three benefits—increased by 5 percentage points compared with last year's survey results. The proportion of respondents who are offered one or more of the other Top 10 benefits increased by 2 to 4 percentage points.

The 8th Annual CE News Civil Engineering Salary Survey does not measure employee satisfaction, even though a few respondents did complain about being underpaid when asked for general comments. Nevertheless, the majority of respondents reported salary, bonus, and benefit increases that denote a healthy, growing sector of the U.S. economy with increasing professional opportunities.

Survey method

Invitations to participate in the CE News 8th Annual Salary Survey were e-mailed in March 2006 to more than 34,000 subscribers to Civil Connection (an online e-newsletter that includes CE News and Structural Engineer subscribers, as well as others). Of the 7,806 e-mails that were opened (23 percent), 2,917 people launched the online survey.The survey remained open for two weeks,and during that time we received 2,887 completed records.For this analysis,we separated the data provided by civil engineers (58 percent of the responses) from the structural engineers' data, which was reported in the May issue of Structural Engineer.

After cleaning up the civil engineering data, 1,500 responses were analyzed—965 from employees in the private sector and 535 from public-sector employees. Females represent 7 percent of the civil engineering respondents; 93 percent are male.

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 and management of projects in disciplines such as, but not limited to, transportation engineering, utility engineering, land development, geotechnical engineering, environmental engineering, and/or land surveying."


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