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What has happened to Pay Rates?

16 REPLIES 16
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Message 1 of 17
CelticDesignServices
559 Views, 16 Replies

What has happened to Pay Rates?

Sorry but I really just have to vent here once again.

It seems as time goes on, pay rates for jobs are trending lower and lower and lower.

 

I find this very disturbing on a couple of levels, one as an employer and two, as an employee.

I'm finding that jobs whether they are direct or contract these days are screaming for the best of the best as far as qualifications and then turn around and offer McDonald's Fry cook wages.

 

Less than 5 yrs ago I'd find requests for top level CAD Designers on Inventor getting upwards of $40 per hour. CAD Administrators pulling in rates of over $75 per hour. These were all 6 month plus contracts, no per diems, no bennies, etc., strick contract.

 

Today? Today I get requests or offers for these same types of people, one recently wanted a "very strong Inventor Design Engineer. Must be certified on Inventor, have extensive Sheet Metal experience along with Ansys" Long term contract, no per diem, no bennies, no relocation...maximum pay rate? Be sure you're sitting down and NOT drinking anything......

 

$18 ph.

 

That's right, a mere $18 ph hour is the maximum the company is willing to pay for this position.

I'm sorry, but I myself, as an employer can not afford to hire a person at those rates (consider a typical billing rate would be 35% more than the pay rate, not including any profit margin).

 

$18 ph hour are mid to late 1980's rates.

My business is failing to keep open because of employers like this doing nothing more than taking advantage of the unemployment situation and only looking at the short term benefits. For once the economy or employment start to pick up again, all those people they took advantage of are gonna be gone and the employer will be forced to start the process all over again, spending a ton of time and money advertising, recruiting and then training the candidate on their in-house processes, all while hoping the person actually picks it all up and becomes a valuable employee.

 

I'm sorry, but that is extremely poor business practice. That simply costs the company much more in the long run as opposed to paying a proper rate and not only getting, but maintaining the right candidate over the long haul. As we all know, each time a noobie comes in, everyone around them ends up having to hold their hands and guide them until they are able to work on their own, thus everyone that helps the noobie slows down a bit in their own production level. Why in the world would any decent manager put their department through that process on a regular basis?

 

Our rates are typically lower than my competition mainly becuase I don't have the overhead they do, but I still can't keep my employees working for those rates. I have people counting on me to find them work, including myself and I can't seriously look them in the face and ask them to relocate on their own dime 1/2 across the country for $18ph.

 

Anyone esle seeing this going on?

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Jim
Celtic Design Services, LLC

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Always for hire - celticdesign01ATyahooDOTcom
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16 REPLIES 16
Message 2 of 17

I know of companies in England, who for the last 5 years have not paid overtime rate, just flat rate, there are companies that won't even pay that, they have people working weekends and nights upwards of 60 hours for a standard 40 hour take home pay. And if you don't like it 'leave' because there are enough people who will do it.

Message 3 of 17

Oh, don't get me started.

 

When I first started working in the industry, and I was approached about jobs that I didn't want, I would pass them onto friends who worked for our contractors/consultants, etc. Once I got into conversations with those guys about the pay rates of the jobs I'd passed on to them, they were dumbfounded, because their employers told them that the low wages they were getting were 'industry standard' (and this was before the economy took a nosedive).

I know it's considered impolite to talk about money, but, a dialog had to start.

That networking was a big reason why I started my LUG here back in the day, and why I spend so much time working on salary issues with AUGI.

 

When my husband was looking for work after we were married, he couldn't take any of the available jobs... the pay was NOT enough to cover daycare and transporation, so he became a stay at home parent, and we were just lucky that my job was stable.

There's a guru with 10 years of structural design experience and a degree in civil engineering, dropping out of the workforce... leaving the work to be done by whom?

 

When I was looking for work over the past few years myself (outside of the design/construction industry), I saw the same things in other fields. Quality control techs, technical editors, IT project managers... all of them had advertisements requiring a degree and years of experience and special skills... and offering what I made back when I was still in college. Certainly not enough to pay back my investment for school, let alone raise a family in the typical standard. It was really appalling. So many times my husband and I were reading through job openings with total incredulity due to the high expectations and low compensation.

 

Some areas we didn't see as much of a disconnect, many IT PMs and Programmers and some Data Analysts, but, I guess those are just hard enough to fill positions that they don't have a desperate un-or-under-employed labor force to draw from like the design industry has these days.

 

I think the last poll I ran indicated that 40% of AUGI members are currently looking to jump ship from their current employer. Employers need to stand up and take note of that. The industry as a whole suffers from the 'brain drain' of losing people like my friends and my husband.

Now those experienced minds are doing html or landscaping or service industry jobs and are so disgusted with the industry as a whole that they'll probably never go back...

and so the inefficiency that already plagues it will only get worse.



Melanie Stone
Facilities Data Management
IWMS / CAFM / CMMS / AutoCAD / Archibus / Tririga / Planon / MRI Manhattan CenterStone / Revit / data normalization, data mapping, reporting and process documentation
mistressofthedorkness.blogspot.com/
Message 4 of 17

Thanks for the warning.  Would have sprayed my cola all over the screen!

 

$18/hr for Ansys technologist?!?!?  What are they smoking, and what's its street value?  This reminds me of the job market (no, I wasn't in it) back in the '70s during times of high unemployment and high inflation: "Wanted: 22 year old PhD with 15 years experience."

Message 5 of 17

I don't pay close attention to such things.  I do have to ask, what about the other side of the equation?  How much money are these companies brining in?  If the funding isn't there, the wages simply cannot follow.

 

And I do think its somewhat rediculous for a "fry cook" to be making that kind of money.  When that happens then there is the inevitable "Well I'm so much MORE, I should be making ___ times that amount!" which the economy can't necessarily support.  Other groups then jump on board with similar comparisons, and eventually everything spirals out of control.

----------------------------------
If you are going to fly by the seat of your pants, expect friction burns.
"I don't know" is the beginning of knowledge, not the end.


Message 6 of 17
graemev
in reply to: dgorsman

What is earned ought to be in relation to the local cost of living.  (So should the minimum wage, but that's a whole other wax ball.)  That being said, there's a supply and demand factor included in all wage negotiations.  (Note that all job interviews are a negotiation.  Desperation is not a good bargaining position, but sometimes that's where one is starting from.)

 

In Fort McMurray, AB, the local cost of living is huge.  $1000 per month for a basement room.  Not a suite.  A room.  Everything up there is, by extension, more expensive.  Tim Hortons pays substantially more there compared to the same job in Edmonton or Calgary.  What would be a good, comfortable income in Edmonton would see you homeless and hungry in Fort McMurray.

 

If I were offered $18/hr for what I do (machine design) and for the experience and skill set I bring to the job?  I'd snicker in the interview and ask them to call me when they get tired of useless CAD-monkeys who don't contribute the value and content they are actually asking for.  When they get serious about what they actually need, they know my number.

Message 7 of 17
sam_m
in reply to: graemev

The issue is further complicated this side of the pond...

 

For some reason it seems like the term "engineer" has lost its meaning here and has become a loose term for a range of "hands on" jobs...  The concept of an engineer being someone with an engineering degree/qualification/experience is a joke...

 

e.g. a "gas appliance engineer" - for someone who services the gas boiler...  I just remembered, I was speaking to someone the other day who said they were a "landscape engineer" and I asked what that involved and what he actually did - drive a digger...  wtf!!!

 

So, with the "engineering" section of any jobs paper/website now filled with such non-engineering jobs the perception of what an engineer is has been devalued even more, and will only ripple on into our wages...



Sam M.
Inventor and Showcase monkey

Please mark this response as "Accept as Solution" if it answers your question...
If you have found any post to be helpful, even if it's not a direct solution, then please provide that author kudos - spread that love 😄

Message 8 of 17
Charles_Shade
in reply to: sam_m

Shelf Replenishment Engineer

 

Work may no longer be pride in a job well done; rather it is what Title is held.

Message 9 of 17

dgorsman,

It's a viscious circle, isn't it? A company can't be productive and profitable and able to win repeat jobs without a skilled workforce. With unskilled people they could take much longer to produce the same amount of work, or take the same amount of time to produce substandard work. So, they can't afford to pay wages enough to lure in the best workers and increase their profit margin and the problem could only get worse for them.
You know, unless they get lucky and someone is desperate for a job, but, that someone will jump ship as soon as the market improves.

~shrugs~ Those issues are certainly why I'll never be a business owner. I'd rather criticise the process than figure out how to balance it. 😉


Melanie Stone
Facilities Data Management
IWMS / CAFM / CMMS / AutoCAD / Archibus / Tririga / Planon / MRI Manhattan CenterStone / Revit / data normalization, data mapping, reporting and process documentation
mistressofthedorkness.blogspot.com/
Message 10 of 17
dgorsman
in reply to: graemev

I can appreciate that.  Rental here in Calgary is *very* low supply with rates going through the roof as a result.

----------------------------------
If you are going to fly by the seat of your pants, expect friction burns.
"I don't know" is the beginning of knowledge, not the end.


Message 11 of 17

Melanie - 

 

and/or is it influenced by human greed? (of those able to make a difference).

 

The directors/investors will all be used to years of healthy fat cheques, bonuses and regular pay-rises and when the recession hit and profits dropped, would they willingly take a pay-cut?  So, if they wouldn't then that saving has to come from somewhere down the line.  Given that a director's wage is likely to be pretty decent it, what would be a 5% drop in their wage would be a much larger cut of a number of "lesser-beings".  More and more companies stretch their staff more and more then the average wage will only drop.

 

Not to mention that as any manufacturing industry declines then any directly related industry like design & engineering will be dragged down too afterwards.  I can only imagine how the fall of Detroit (as an ignorant non American I can't think of other massive US manufacturing that's gone under) would impact a broad wealth of jobs related to our skil-sets.

 

I saw this vid the other night - as it's all politics I'm sure it's biased, but it still makes you wonder:

http://www.youtube.com/watch?v=QPKKQnijnsM

 



Sam M.
Inventor and Showcase monkey

Please mark this response as "Accept as Solution" if it answers your question...
If you have found any post to be helpful, even if it's not a direct solution, then please provide that author kudos - spread that love 😄

Message 12 of 17

Sorry, I can't watch the youtube link you shared, but, I think it could be poor standards set for leadership value as well.

I recently read an article about how making top pay for executives public has caused an unreasonable spiral in CEO pay, etc. So, yeah, if stockholders or company owners or C-Levels have all grown accustomed to high pay and bonuses, companies could continue to fund that so their leadership team stays feeling good... but, you know, the production workers have their hours reduced and morale shrivels when they have to take a second job and then see their upper management roll in with new cars.

It's a pretty common thing when the belt-tightening happens to the front line workers. Most people at the bottom have to take it, and they're used to taking it.

I once quit a job because my pay was reduced from $6.50 an hour to $5.15 (which was min wage at the time) by a new manager who was 'cost-cutting'.
That was fine by me, I was looking for an excuse to quit one of my jobs, which left that manager with nobody but the morons who could barely count (that manager was fired a few months later when her promises of higher profit margins didn't come to fruition).


Melanie Stone
Facilities Data Management
IWMS / CAFM / CMMS / AutoCAD / Archibus / Tririga / Planon / MRI Manhattan CenterStone / Revit / data normalization, data mapping, reporting and process documentation
mistressofthedorkness.blogspot.com/
Message 13 of 17

"I once quit a job because my pay was reduced from $6.50 an hour to $5.15 (which was min wage at the time) by a new manager who was 'cost-cutting'."

 

The beatings will continue until morale improves?

Message 14 of 17

Exactly.

The crowing momement was when she got mad because I didn't give two weeks notice when I quit. FNORK!!! I'd been there for three years longer than she had and she was all smarmy and told me 'you shouldn't burn professional bridges.'
Needless to say, I never worked in that town again. 😉 Of course, that was my choice and not her's.

Oh, I like this Dilbert...
http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/00000/6000/300/6385/6385.strip.su...

Oh, this one, too...
http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/00000/1000/100/1159/1159.strip.gi...

There's one that I'm also thinking of but can't find.
There are some layoffs and Dilbert is expected to take on the extra work, then he says, wow, I know I will never get this all done, so all pressure has been lifted, thank you!
okay, I digress...


Melanie Stone
Facilities Data Management
IWMS / CAFM / CMMS / AutoCAD / Archibus / Tririga / Planon / MRI Manhattan CenterStone / Revit / data normalization, data mapping, reporting and process documentation
mistressofthedorkness.blogspot.com/
Message 15 of 17

Is that the one where Dilbert is telling others "Hey, come join us flicking our fingers... we get paid for this!"  Boss: "I'm not sure what success sounds like, but I'm pretty sure this isn't it...".  😄

----------------------------------
If you are going to fly by the seat of your pants, expect friction burns.
"I don't know" is the beginning of knowledge, not the end.


Message 16 of 17

lol, nope, that's a different one.

All scarily real, though, aren't they?


Melanie Stone
Facilities Data Management
IWMS / CAFM / CMMS / AutoCAD / Archibus / Tririga / Planon / MRI Manhattan CenterStone / Revit / data normalization, data mapping, reporting and process documentation
mistressofthedorkness.blogspot.com/
Message 17 of 17

Oh trust me, I fully understand the other side of the equation. As I tried to state, I'm not only looking for work for myself, but I also have a few employees or people who'd like to be employees as well.

 

I can't stay in business without making a profit, just as these companies, but at the same time I also can't stay in business if I employ sub-par employees. Afterall, they represent me and my company. Granted, I don't have any entry level types on my payroll, so I can understand lower wages for low experience. But I have people that all have at the very minimum 20 odd years of experience in the mechanical design field, I myself have been in the field since 1980.

 

The issue is, if these places want to pay such low rates, they need to be looking at local candidates and direct hires, not contractors.

Contractors will typically if not always have a set place of residence and travel to the job site, usually in another state. Meaning they now have to cover two places of residence along with all the added features and costs that come with that. On top of that typical contractors do not get any type of benefits. They don't get paid for holidays, vacation or sick days and they have to purchase their own healthcare if they so choose and that's usually extremely expensive.

 

I recall many years ago working at Westinghouse, they paid their contractors on avg just $2.00 an hour more than their directs. But those contractors did get benefits from their contract house, but nothing along the lines of the Westinghouse bennies. So at the end of the day, a direct employee was making out far better than a contractor. There was a reason they had a revolving door for contractors. They got to the point of recruiting recent grads from a tech college in upstate NY, paid them squat and once they got 6 months under their belt as experience, 90% of them bolted for higher paying jobs. We were in a constant state of training new employees and thus got very little down.

 

Back to my situation, if I offered an employee that $18 ph job, I'd have to expect to pay him about $10-11 an hour to cover my costs and that's giving me ZERO profit, that would be a break even for me. So, ask yourself, would you be willing to work for say $10.50 an hour as a mechnaical Design Engineer/Ansys Tech with at least 5 yrs experience and being Certified on Inventor and having vast experience on the Sheet Metal package? Oh and you have to relocate at your own expense, there's no per diem and no benefits included.

 

This is why there are still so many people out of work, people can't afford to take these jobs.

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Jim
Celtic Design Services, LLC

Inventor/AutoCAD/Vault WorkGroups
Always for hire - celticdesign01ATyahooDOTcom
https://www.facebook.com/pages/Celtic-Design-Services-LLC/184666001666426
==========================================================
Please use the "Accept as Solution" and "Give Kudos" functions as appropriate to further enhance the value of these forums.

Go raibh maith agat (in other words...Thank you!)

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