November 2010

Waiting for a Rebound

As the economy creeps out of the recession, engineers are hoping for better days and facing a new kind of workplace.

BY DANIELLE BOYKIN

In 2007, a financial crisis created by a collapse of the housing market and banks that were deemed "too big to fail" ushered in high unemployment rates, a dramatic drop in consumer confidence, and uncertainty in business sectors not witnessed in decades. Economists at the National Bureau of Economic Research reported in September that the Great Recession ended in June 2009, but a slow recovery and an average national unemployment rate of 9.6% has the public and the business community feeling as if the recession is not yet over.

According to a survey by the Pew Research Center in June, 54% of participants stated that the nation is still in a recession while 41% said that the economy is beginning to come out of a recession. More than 55% of adults in the labor force said that since the recession began, they have experienced unemployment, a cut in pay, a reduction in hours, or have become involuntary part-time workers.

For U.S. engineers, there are some bright spots. According to NSPE's Engineering Income & Salary Survey, as of April 2010, licensed engineers made an annual median salary of $99,000 while those with no license or professional certification earned $94,000 a year. The median salary for engineers in training was up to $65,500 in 2009 from $61,500 in 2008. The median salary of executive-level engineers increased to $135,405 in 2009 from $129,000 in 2008.

Yet, professional engineers are aware that a post-Great Recession environment has presented new challenges when it comes to career growth opportunities, particularly in the hardest hit industries and states where unemployment rates exceed the national average.

More With Less
There are very few if any sectors of the U.S. economy that have not been changed by the recession. Despite positive economic progression as seen through a rise in gross domestic product, business leaders will need to remain wary and look to new and emerging markets. AEC industry expert Mark Zweig, founder of consulting firm ZweigWhite, recently predicted that the remainder of the year will remain flat for the architecture and engineering industry, and the construction industry will continue to struggle. He does foresee that projects involving health care, higher education, airport and aviation facilities, water/wastewater, groundwater, lead paint removal, highways and bridges, rail, and distribution centers are markets that show potential for improvements.

Doing more with less has become the new normal, particularly for the small business owner. As a resident of California, Ken Discenza, P.E., has faced this new normal and a state unemployment rate of more than 12% for quite some time. When projects started to slow down two years ago for the owner of Site Design Associates Inc. in San Diego, Discenza had to significantly reduce overhead. He was also forced to layoff three employees, including an EIT who was preparing to take the PE exam and the highest paid staff member who was nearing retirement.

Discenza also significantly changed the type of projects that he has focused on since establishing his firm in 1984. Public construction projects and residential projects are no more, and competition forced him to work at discounted rates. "We are doing industrial work now, and that is keeping us going. But it's not work that is producing jobs just yet," he says.

Discenza is closely looking for indicators that the economy is turning around. One of those indicators is bank lending to private industry. "If our private clients can get funding for projects, they will go forward. They cannot get funding right now," he says. "As the economy gets better, the engineering is the first thing to happen. They don't build houses, commercial, and retail space until it is engineered, designed, and permitted. I get calls from past clients because they want to know if we are busy. When we say that we don't have any new projects, they are disappointed."

What was the fate of the young engineer that Discenza once employed? He eventually earned his PE license, Discenza says, and after a year and a half he was hired by a larger company.

Small AEC firms and consultants aren't the only ones who have had to make major adjustments to deal with changing economic conditions. Kevin Brown, a human resources professional with the PBSJ Corp. in Miami, says that the recession forced the firm to layoff employees in June 2008—their first time in 19 years. The layoffs were followed by smaller reductions during the last two years. Brown says that there have not been any company-wide salary reductions or wage freezes, but the firm has not adjusted salary ranges for the last two years since market wages have been stagnant. The firm has also overhauled its benefits program to reduce overhead without passing on additional financial burden to employees.

Brown says that a slowdown of business growth opportunities has resulted in some restrictions in career opportunities for engineers. "Since we are contracting rather than expanding, there are fewer higher level positions for employees to move up into, and since there is very low turnover, there are fewer vacancies that might have been filled internally," he says. Brown adds that restrictions on conference attendance and onsite training have reduced professional development opportunities, and the firm's college graduate recruiting and training program is dormant until the economy improves.

Lemonade
When the residential construction market came crashing down, David Janover, P.E., witnessed the drastic effects as town engineer for the Town of Islip, New York. In November 2009, the town laid off 37 employees because most of its operating budget comes from the revenue brought in by mortgage taxes. Although Janover lost staff members in his engineering department, there has been less work due to a decline in home inspections and construction permit requests. In addition to layoffs, management employees were required to go one week without pay, though they can receive the money when they retire or resign.

After the turbulence of the past few years, Janover wants to "make lemonade out of lemons." He is starting to see signs of improvements in the economy, but he remains cautious and will continue trying to do more with less. "We have taken advantage of this period of low activity to develop a more efficient way to schedule and process inspections, so we will be able to easily handle additional work as it comes in at a higher rate," he says. "We do not anticipate gaining any additional staff over the foreseeable future, and we will need to work more efficiently to keep up with our inspections and permit program as more construction takes place. I consider our ability to improve our internal processes was only due to the fact that there was decreased activity, and we therefore turned something negative into a positive for the department."

Despite the challenges brought on by the recession, Janover believes the economic climate has presented a prime opportunity for him to exhibit the leadership skills required of a professional engineer. "Leadership during periods such as this is very important. Employees need to be reassured that we will survive this together and that the experience will make us stronger," he says. "Problems are more likely to arise in the workplace during these times. As the leader of the group, I look at the big picture, make decisions, and explain the reasoning behind it. I emphasize how important everyone is to the department and ultimately the town."

When Carlos Gittens, P.E., began his career, it was a time when internships for engineering students were abundant and new graduates fielded multiple job offers. Years later, Gittens knows many professionals in the field who have been laid off in the past 18 months, and some have changed careers in order to find stability. Although he works for the large international A/E firm Jacobs, there have been tough decisions made to deal with a loss of work from public clients for his Orlando-based office. "We had to make the difficult decision to [downsize] about 10% of our workforce in the state late last year," says Gittens. "Salaries were also frozen for the past two years with very few exceptions. The workload has increased significantly for many in our firm due to the layoffs, making it harder to meet client's budgets and schedules."

Despite these changes, Gittens feels fairly secure and foresees some room for growth within his firm, if he isn't complacent about his professional development. "Within my company, I'm trying to diversify my resume by gaining experience in other areas to make myself more marketable," he says.

Scott Wolf, P.E., made a career switch from the private sector to the federal government before the start of the recession in 2007. "Fortunately, as a federal government employee, I have not personally been impacted by the economic recession and have been able to obtain a promotion to my current position within the agency," says Wolf, a consultant services program manager in the Federal Highway Administration's Office of Infrastructure in Washington, D.C. "While the recession did not personally impact me, I have certainly seen its affect within the engineering industry. When recruiting at engineering college fairs, I have seen the uncertainty of upcoming graduates on the search for the first job as well as midcareer engineers who have found themselves out of work and looking for available opportunities."

Wolf believes that the "more with less mentality" is here to stay when it comes to employment in government sectors, including at the federal level, but he believes that adequate career opportunities still exist for engineering professionals. "Transportation engineering positions will continue to be in demand as critical government functions are required to deliver transportation programs," he says. "This atmosphere will require professionals with skills to meet increased demands and challenges and although competitive, will provide ample opportunity for advancement."

The Future
Marc Sampson runs a career services firm for engineers and management professionals in the construction, energy, engineering, and facilities industries in the U.S. and Canada. Recently, he has seen an uptick in companies interested in finding top-notch engineering talent in growing markets.

"There isn't any question that things are beginning to improve," says Sampson, CEO of BirdDogJobs.com. "We are seeing positive movement in the transportation sector with design work for roads and bridges. That's due to stimulus money for infrastructure projects. There will also be increased pressure to hire and find top geotechnical engineers and environmental professional engineers. Licensed mechanical engineers are in high demand and have been for the past five years."

Sampson's firm conducted a survey and found that when industry leaders embarked on major cost-cutting initiatives, which involved staff reductions, they may have cut too deep. The labor force is saturated with people eager to work, but major cuts in human resource departments have overburdened staff with reviewing numerous candidates and is resulting in a trend that Sampson calls "panic hires." This trend is working against building a pool of top-notch talent.

Economic conditions and employment rates have given executives the upper hand in the job market. But Sampson warns employers to not take their high achieving talent for granted when implementing plans to make their firms stronger in a postrecession era. He advises company leaders to create the right environment to prevent a mass exodus of solid talent when the markets start to open up again.

"There's so much pressure on executives and managers to think about the bottom line, and they have to move quickly with initiatives and that includes addressing the hiring cycles and developing their staff," he says. "This effort begins with improving the work environment, communications, and leadership inside the organization to allow professionals to at least have more control of their job descriptions. Compensation is always going to be three or four levels down the list of employee satisfaction."

No matter the market or career stage, the ability to improve career growth potential and command increased compensation will require more efforts to stand out among other candidates. Sampson advises licensed engineers to maximize their career opportunities by seeking out other credentials and specializations, such as with LEED certifications.

Others, like Brown of PBSJ Corp., believe online social networking is changing the job search. "Social networking is quickly replacing job Web sites as the primary source for identifying candidates, so job seekers should ensure that they take the time to create a robust profile that truly reflects the depth and breadth of their experiences," he says. "They should take the time to develop a broad network of connections to existing and new contacts, particularly in companies in which they would like to work."

Sampson says that historically, companies evaluated candidates based on their technical accomplishments. "There is clearly a growing change where employers require professional engineers to have developed interpersonal skills and the abilities to communicate and listen when working with clients and subcontractors," he says. "Because, at the end of the day, when [budgets] are still so tight and margins are thin, the defining difference when competing for projects is going to be relationships."