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RE: Salary Survey

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Excellent points made by Stan Caldwell. As most of you know, I sell BillQuick (a Time Billing software) to engineering and consulting firms. I must say that I have been shocked to see how poor most of the engineering firms are at their time keeping, billing and project budget tracking. A good percentage of engineering firms use spread sheets for time keeping and word processors for producing invoices. Terms like "Budget comparison report", "Aging Report", "Work in Progress Report" are unknown to most engineers.

How can we make more money when we don't even keep track of our most valuable asset: Time.


At 04:33 PM 5/5/99, you wrote:

It is unproductive to generalize on the compensation levels of structural engineers, or of any other professionals.  There are all sorts of singers and songwriters, ranging from penniless street corner performers to multi-millionaire "platinum" recording artists.  Does it really make any sense to talk about the *Average* or *Maximum* compensation of singers and songwriters?  Of course not!  To some degree, the same can be said of structural engineers.

Your friend was wrong in assuming that all structural engineers "max out" at $70,000.  I happen to know a number of structural engineers making more than twice that amount, while still in the prime of their careers, and while living in states (like Texas) with no income taxes, no earthquakes, and no plan-checkers.  In my opinion, structural engineers who feel that they are not compensated adequately should first blame themselves, rather than the profession.  If a structural engineer feels financially limited by his/her profession, then he/she should realize that the limitations are largely self-imposed.  That individual would likely feel the same or similar limitations if he/she were in any other profession.  After all, there have always been plenty of itinerant lawyers, and now there are an increasing number of doctors declaring bankruptcy.

To those structural engineers who feel inadequately compensated, I would offer the following advice:

1.  Be a Rainmaker > In any profession, the dollars flow most freely to those proactive individuals who "make things happen."  It's the people who compulsively network and live for the thrill of the big sale that make the big bucks.  It's never the production folks in the back room.  Being a great structural engineer no longer guarantees job security, and certainly doesn't guarantee wealth!  Remember the old adage:  "It's not what you know, but who you know, that counts."  The counting is done in dollars.  Firms grow and shrink based on the rainmaking abilities of the principals and key staff.  For better or worse, this is true of all professions. 

2.  Develop a Niche > Regrettably, a large share of the building design market is now driven almost exclusively by price.  As a structural engineer trying to make a living designing buildings, you are destined to sell your services in a commodity market unless, or until, you develop a special expertise that will clearly differentiate you from the masses.  What do you or your firm do better than anyone else?  Do your clients know this?  How about your competitor's clients?

3.  Sell Based on Value > With each passing year, structural engineering becomes more automated.  In part, this is done to keep prices down despite rising labor costs.  Each design project can be done with less man-hours than its most similar predecessor.  Does it then make any sense to sell your services on an hourly basis?  Of course not!  The best opportunity to make a profit on design jobs is to sell them on a lump sum basis.  Furthermore, lump sum fees should be based (whenever possible) on the perceived value of your services to the client, rather than upon the estimated effort required to complete the work.  This assumes, of course, that the former is more than the latter.  If not, you should run (not walk) away from the job!

4.  Pursue Bigger Fish > On any project, the total professional fees are usually related (directly or otherwise) to the size and complexity of the project.  Consequently, it follows that an engineer can obtain much larger fees if he/she is able to successfully pursue larger and/or more complex projects.  If you primarily work for architects, this generally means pursuing larger and more prestigious architectural clients.  If you live in a remote area, it probably means moving to a metropolitan area where these clients and projects exist.  Do better projects and clients seem like an impossible goal?  Remember:  No one can make you feel inferior without your consent!  Convince yourself of your ability, then convince others.

5.  Be a Prime > Structural engineers often blame their low compensation on the fact that they are nearly at the bottom of the design team "food chain", ranking above only the unfortunate geotechnical engineers.  The architects, of course, are usually at the top of the food chain for building projects.  Who put them there?  They did!  There is no rule that a structural engineer cannot serve as the prime professional, and subcontract the architecture and MEP to others.  Why settle for one-sixth or one-eighth of the total professional fees, especially when you might do up to one-half of the overall effort?  Find an opportunity to work as a prime on just one project, and you may never agree to be a sub again!  If this is impossible on building projects in your area, then switch to bridges or to industrial work, where you can be the prime professional.

6.  Be Selective > Many engineers struggle to make a respectable profit because they do not exercise adequate discipline in screening their clients and their projects.  Every "opportunity" should be screened and a "go/no go" decision should be made before any proposal is written.  It is often very difficult to turn down work, but this is frequently necessary to run a profitable business.  My simple rule, taught to me years ago when I was a branch manager for a firm based in San Francisco is:  "You are a businessman who happens to be an engineer, not vice versa!"  If you follow this rule on a daily basis, your profits will increase.

Okay, now I'm going to step down from my soapbox and go earn some money!

$tan R. Caldwell, P.E.

Dalla$, Texa$

(Hockeytown $outh)