January 2006

in my opinion

Engineers May Be Treated As Commodities... But So Are MDs

by Vern Johnson

In the October 2005 issue of Today's Engineer Online, George McClure wrote about the commoditization of engineers and some of the roles that are likely to be outsourced, offshored or fulfilled through other lower-cost solutions. Engineers who are hired simply for what they can do today rather than what benefits their knowledge and skills might bring tomorrow do  have a commodity-like value. Increasingly, when people with specific knowledge or skills are no longer needed, their employers let them go. The landscape is changing dramatically for engineers, but for professionals who are flexible, independent and entrepreneurial, the future is bright.

Today's Engineers Face Accelerated Obsolescence

With new technologies rapidly replacing old ones and corporate globalization on the rise, more and more employers are hiring skills rather than people to remain competitive. Individuals with the needed skills are in demand; those without them are not. And those who are in demand can expect their salaries to increase substantially. But skyrocketing salaries carry with them the expectation that employees will deliver exactly what employers need. And when they don't produce at appropriate levels, or don't develop the skills needed to match the next generation of products, those same salaries provide the justification for layoffs. Sadly, many employers utilize today's engineers not for their knowledge, skills, attitudes and abilities to learn and adapt, but because they can fulfill a specific need today. Tomorrow, on the other hand, will have to take care of itself.

Marketplace competition is now so keen that companies can't retain old product lines that cease to grow when exciting new technologies are waiting to be exploited. Changing technology doesn't just mean new products, it also means new ways of doing business. And it can substantially impact the workers who produce the products. Professionals who practice in rapidly changing technological fields are also in rapidly changing careers. It used to take a number of years, sometimes an entire career, for obsolescence to cause an engineer's skills to devaluate to the point where they could no longer be used to earn a living. Today, as new technologies rapidly replace old ones, engineers who do not keep up with new technologies and innovations can become obsolete in just a few years — sometimes less.

Engineering products and services have been moving into the global marketplace for many years, but never has the resulting competition for market share been more acute. The Pacific Rim manufacturers have proven themselves to be capable producers of quality goods and services and the European common market is trying to become a formidable competitor. China is also a competitor, as well as a future marketplace. No matter which countries are involved, levels of competition in the world markets of the future will increase, and soon consumers will be able to ignore any product or service that is not of world-class quality.

Going Global

The leading U.S. corporations of a decade or so ago are now almost all global corporations. They may have their headquarters in the United States, but many have more employees outside the country than within. At the same time, many of those Pacific Rim and European corporations have plants in the United States, managed outside the country, but employing U.S. citizens. In other cases, U.S. and foreign corporations have merged so it is difficult to determine if they are domestic or foreign firms. They are both and they are neither. They are global firms.

A number of arguments exist for companies to become global rather than national corporations. The marketplace for their products has been mentioned, but consider one other reason. Strong competition demands the best possible employee skills and the lowest possible employee costs. And these characteristics are required now, without delay, to get products to market before competitors do. Employers have little patience for retraining existing employees and upgrading their skill sets. To succeed, companies need to identify low-cost skilled labor, or at least low-cost, trainable labor for every possible work function. For many corporations, finding skilled labor at the lowest possible cost is the primary driver behind decisions to globalize. The offshore manufacturing concept grew out of pressures to become leaner and cheaper — not necessarily better.

Since U.S. workers wouldn’t work for low enough wages, companies moved their facilities to offshore locations where cheaper labor existed. Even though training was needed, once the new employees were brought up to speed, they worked for relatively low wages. It should come as no surprise that in many locations around the globe, well-trained engineers and skilled technicians living in poor economies are willing to work for significantly lower salaries than their U.S. counterparts.

Another way employers find low-cost skilled labor is by importing skilled workers from the same countries where offshore facilities had been previously established. Immigration laws place limits on this activity, but because of skilled-worker shortages — real or perceived — there is sympathy for increases in the admission of skilled workers. Theoretically, these workers are, sometimes referred to as "guest workers," because the companies only want to employ their skills for relatively short contracts. If guest workers are needed for extended time periods, that can be justified later when the need is more apparent. Also, since these temporary employees are from countries with relatively poor economies, they rarely demand the expensive employment benefits and retirement plans of their U.S. counterparts.

Is There Hope for U.S. Engineers?

The position in which U.S. engineers find themselves is similar to that of many other professions — and it is far from hopeless. For example, doctors, lawyers, accountants and piano teachers work for clients who contract with them for their services. What is more, the clients of these professionals may only want their services for a fraction of an hour, rather than a fraction of a year, or a few years. It was the industrial revolution that provided structured engineering employment with companies in the first place. Technical workers didn’t have career ladders or employers before the industrial revolution, and many independent entrepreneurial workers still don’t.

Ample numbers of good jobs still exist with good pay for technically vital engineers who have valued skills and are flexible enough to adapt. The future is changing, and engineers are well grounded in the basic sciences that support future technologies. All they need is flexibility.

Educational support is also becoming more and more available where and when it is needed. The government pays for the largest share of public college education; it helped to develop portable pensions and individual retirement accounts; and is interested in finding ways to support engineers' continued learning in dynamic technologies.

The future is bright for today's engineers. Some are experiencing career paradigm shifts and need to adapt to new realities. All engineers need to keep track of what is happening in global markets so they can identify gaps in their knowledge, skills and attitudes. Such awareness will enable them to know where to focus their learning. Engineers must become career development experts, so they can successfully coordinate their employment and learning activities. And, above all, they must learn how to learn to ensure their continuing employability.

In the future, engineers will have to become much more independent and entrepreneurial. Employers can no longer be expected to watch over engineers' careers and assure their futures. Tomorrow's engineers need to understand that  their knowledge and skills have a commodity-like value, but that doesn't mean they must become minimum-wage, hourly employees. With appropriate efforts, they can become fee-for-service professionals.

Vern R. Johnson is associate dean of engineering at the University of Arizona in Tucson and is IEEE-USA's Career Activities Editor. Comments may be submitted to todaysengineer@ieee.org. Opinions expressed are the author's.