Ask The Readers — How Much Is An Engineer Worth?

Ask The Readers — How Much Is An Engineer Worth?

I was talking to my brother-in-law about salaries the other day. He mentioned he knew some police officers in the area that had base salaries in the $70-80K range. With the regular overtime they got policing public events like carnivals and sporting events (rough gig!), their salaries went into the six-figure range. Aside from the shock I had at my decision not to be a police officer, I caught myself wondering:

How much do I think that job is really worth?

Part of me thinks that the police should be paid well. They are protecting people and that’s an important thing. It’s an odd situation too, because we are in a relatively safe area. Should cops in the safer areas get paid well because they continue to keep us safe? Or should they be paid less because the area is already safe? (And for those wondering: yes, this is a suburb and yes unions are involved, but really that’s not the point) Regardless, I did think this compensation was a little high, especially when I compare it to engineering salaries and the amount of training required to get that position.

But then I realized I really don’t have any clue how to value people.

One of the most popular posts here at Engineer Blogs is my post on “Expectations and Electrical Engineering Salaries“. In it, I talk about the (realistically) linear vs the (assumed) exponential growth of EE salaries and how this is hardly ever the case, for a variety of reasons. But in that and all other posts you see about salaries, the following phrase is almost always a prominent part of the article: “Market Valuation”.

Sure, you might think you’re worth more. The work you do might even actually be worth more. But no, it doesn’t matter. If the market says you’re worth $50,o00, you’re often anchored with that number and have some amount of wiggle room around it. Any time you can be put into a category where an HR department can compare you to a larger group of people (and therefore spend less on you), they will try to do it.

I also was reading an interesting post on Hacker News and Stack Exchange about why business managers and project managers get paid higher salaries than programmers (engineers). Many of the comments referred to the higher stress levels of PM because of the expectations that it will actually eventually be the manager that needs to get the product out the door. Also the fact that the project manager is “closer to the money”, a topic that often comes up when comparing engineering and sales salaries. This is a theory that as you get jobs that are closer and closer to when the product actually gets sold, there is more and more money to be had. When you’re just a “cost center” in the production of a product, each additional person that works on the product is just a multiple of the average cost of employing an engineer, versus how much value an individual engineer actually adds to a product.

So my question for our readers is: How would you value an engineer? Perhaps you already do. Perhaps you have knowledge about how other engineers are valued? Should the value be tied to the ultimate market valuation of the product? (ie. should the inventor of the iPod be paid millions more than the inventor of the Zune?) If so, should an engineer be punished when there is a failure of a product? How the heck do we figure all this money stuff out, anyhow?

Thanks to 401K 2012 for the money shot…


Hi Chris, your post raises several important questions, mainly related to what your value is to your company or how much your company should pay you in relation to what others may earn.
The salary of a policeman is based on many dufferent criteria’s mainly his rank, experience, qualification,knowledge, service and the value he adds to his/her force. Also policeman are a slightly different breed in that they are here to protect us and with that comes a risk. Police salary’s are laid down and fixed to a certain degree across the country.
An engineer like we both are/were in my case, i’m recently retired, a victim of down sizing but that’s another story.
An engineer who seeks a higher salary has very specific avenues open to him. That is, gain higher/better qualifications, take on more responsibility agreed with your immediate manager for a certain time to specifically increase output/production/quotas etc in the hope of a pay raise later in the year when your success can be measured. Move to a company that seeks your skills and is willing to pay for them. Move to a new area/region. Different regions pay higher salary’s based on a) can they get the staff at the required level they need. b) Is the geography or position of the company not suitable to raise a family. I know of at least two companies that pay higher than norm just to get people through the door in an area where no one wants to live.
There are plenty more of reasons why an engineer earns what they do and why a policeman earns what they do, the two aren’t really comparable, let me ask you this, would you swop your salary to be a policeman today? I think your answer would be no as mine would be.

Can you just measure engineer’s worth by present salary that too comparing with policeman. Can policeman change job for salary jump? Can policeman do for higher studies and jump to higher level. Its unnecessary to compare technically qualified person with other from another field. For a good engineer sky is the limit. If he start his own business in engineering then he employs the people of the salary you are talking about.

I’m afraid that you’re asking the wrong audience. You need to ask C-level executives. Then you’ll probably find that they act the way most other people do: they value their own interests and skills higher than those of others. They figure that they do the “real” work, and that they can hire help to do the stuff they cannot or will not do fairly cheaply and easily – especially during a down economy.

Admiration for engineering generally changed when the balance of power changed at the top of business. Many companies were started by engineers or others with technical backgrounds, and while those executives were in power life was good as an engineer. Management understood what it took to create products and get them out the door. But then the company grew to where it needed people with business and finance backgrounds to take over day-to-day operations. As many people do, those business and finance people valued their own skills more than skills that they didn’t understand (engineering). Next came the New Golden Rule: those with the gold, rule. Engineering transitioned from being the company’s foundation to a cost center. In too many companies playing the Stock Market and generating reams of spreadsheets became more important than product research and development, to the point that we now have a faltering GDP and have lost our world technical leadership in many areas.

Anybody’s value is based upon what they’re perceived to contribute. If you value safety, law and order then you can support high police pay. If you value the illusion of somebody in complete control then you can support high CEO pay. If you value the quality and usefulness of a product then you might support higher engineering pay, but there’s a caveat. Most engineers work outside of the public limelight. Most people do not know what engineers really contribute, and others (like those business and finance people) tend to steal their spotlight. So engineers are under-valued.

It depends upon how much risk and exposure an engineer is willing to take. If he toils in his cube and does what he’s told, he will be taken advantage of. If he is willing to start his own company and go the extra miles required to make it work, he can break the mold. That is how I access value upon everybody: the results of the actual efforts that they themselves make.

My company’s revenues and profits are tied to engineering productivity (in Defense, profit is limited to 8%). So take 92% of company revenue, divide by number of engineers, ignoring overhead staff (managers, HR, IT). That’s how much the engineers are worth. In my particular company it works out to about $200/hr. They pay about 1/2 of that in salary and benefits. So there’s a $100/hr return on investment. As long as there is easily accessible growth potential, my company would be smart to hire as many engineers as it can, because we generally return $2 for every $1.

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