Engineering Salary Guide

Throughout this month, I’ve been posting articles related to money. When I asked my readers what they would most like to learn about when it comes to money, one theme emerged time and time again: salaries.

Engineers want to know what they’re worth and how to earn a salary that’s commensurate with their value. This is definitely an important subject, and one that is often a bit taboo to discuss with your colleagues, depending on where you are in the world.

This is also something that I’ve dealt with a lot over my own career. I’ve made some big mistakes and won some major victories along the way.

Today, I’m going to share all my lessons learned, resources, and tips on how to figure out what you should be getting paid, and how to go about earning that salary.

How an engineer can figure out what salary they should be getting

Let me start this off by saying that this is not an exact science. Salaries vary wildly depending on your location, discipline, education, experience, industry, job title, etc. If you take a look at the mechanical engineering salary study I did a while back, you can see this for yourself. With this in mind, it’s important to take the numbers with a grain of salt.

There are four good ways to figure out what your salary should be:

  • Engineering salary surveys
  • Payscale.com
  • Local engineering regulations
  • Your company’s own internal policies

Below, I’ll help you make sense of how to use each of these tools.

Engineering salary surveys

Depending where you live, there is likely an engineering salary survey that has been conducted that covers your geographical area. In North America, regional or national engineering organizations often sponsor these surveys. If your region has separate organizations for governance (i.e. disciplinary committees, regulations, etc.) and advocacy (i.e. professional development, training, etc.) be sure to check both.

For example, here’s one for the region of Canada that I live in.

Many engineering salary surveys are free to access, like the one above, but others are paid. If the surveys for your region aren’t free, then you can probably convince some of your engineering friends to split the cost with you.

When looking for a survey from your area, it’s important to understand how the survey was put together. Many surveys provide information depending on your seniority and level of responsibility. In Ontario, Canada, for example, engineers are rated from level A (new graduate) to level F (Chief technical officer). Make sure you poke around to find out how engineers are ranked in your area in order to make sense of the survey results.

If you can’t find a survey from the relevant engineering authority, just start Googling or get in touch with your local professional engineering chapter.

Payscale.com

Payscale.com is a website that allows you to enter in your personal and professional details in order to see what people similar to you are earning. This is as simple as it sounds. It takes a while to enter in your information, but once you have a profile set up, you’re good to go. You can also set up scenarios to see how much you might get paid if you did another degree, got a certification, etc.

A word of warning: the results you get won’t be reflective of people who have identical characteristics to you. Take a close look at the results that come up to see that they are actually relevant to you.

The mechanical engineering salary survey that I mentioned above was put together using data from Payscale.com.

Local engineering regulations and guidance

Some places actually have regulations in place that dictate approximately how much companies can charge for their services on an hourly basis. For example, in British Columbia, Canada, this guide is freely published to help consulting firms ensure they are charging fairly for their work. Guides like this are important because it prevents firms from undercutting one another in a race to the bottom, ensures clients get a fair rate, and also ensures engineers are paid fairly for their work.

With some effort on Google, you should be able to find something similar in your area. When you do, determine what level of seniority engineer you are and find the corresponding hourly rate. To figure out what range your salary should be in, divide by 2.85 to get the high end, and divide by 3.15 to get the low end. This will give you an hourly rate. Multiply that by the length of your work week in hours, and again by 52 to determine your annual salary.

This range is only a rough estimate. I would recommend you rely more on the salary surveys and payscale.com mentioned above.

Internal company policies

This may not be an option for everyone, but in some companies, especially larger ones, there are set salary ranges for certain jobs and certain levels of experience. Human Resources or your direct manager might share these ranges with you if you ask.

Knowing the pre-set salary ranges is useful in that it can tell you whether there is room to grow salary-wise within your level or grade. Typically, getting a higher salary within a grade is easier to make happen than getting into a higher grade, which requires more justification, and paperwork.

Knowing that there’s room to grow within a grade can help you to build your case if you believe that you should be earning a higher salary for the work you do (as determined by your excellent research using the resources above).

In the past, I’ve used our company’s internal policies to negotiate a higher starting salary for a new role within the company. Our HR department wouldn’t share the range of pay to be expected for my new grade, but were happy to tell me my new grade. I asked some close colleagues who were already at the grade I would be moving up into and asked if they thought the salary I was being offered was reasonable. I had four different people tell me the offer was well below what they would expect given the grade. I used this, in part, to negotiate a more reasonable salary.

How to use your research to get a better salary

Ok, so you’ve done your research. You have a few different sources that tell you that you should be earning a higher salary. Good for you! Now, the question is, what the heck do you do now?

The first thing you need to do is not freak out. Half of all engineers in your situation are getting paid less than average – by definition. This isn’t necessarily cause for concern. If you find there’s a gap between what you’re being paid and what the market says you’re worth, congratulations! You’ve found an opportunity.

The question is: how do you take advantage of this opportunity? In my experience, there are four different times that act as natural punctuation marks in your career where seeking a salary increase makes sense.

  • Starting a new job with a new company
  • Getting a new role within your existing company
  • Completing a degree or certification
  • Annual performance reviews

Starting a new job

This is an obvious opportunity, but one that people often don’t know how to pursue. The most important thing to do when being offered a new job is to know what you should expect for a salary (using the research we talked about above) and knowing what your lower limit is when being offered the job.

It’s important to know your lowest acceptable salary before getting the offer. This way you can more objectively evaluate a job offer when it comes in and not make an overly emotional decision. If an offer is on the low end, and you believe you should earn more, you can negotiate this with your potential employer. They expect you to do this. Remember, it’s human resource’s job to get a company great talent for the lowest cost possible. Most companies will offer new employees a “low-end-of-fair” salary to start. That’s just business. It’s also important to remember that if a company offers you a job, they want you, and are likely willing to make adjustments to their offer to get you. The moral of the story here is that you need to be comfortable negotiating for a higher salary if you feel it’s a justified request.

If, after negotiating, the company doesn’t give you your bare-minimum salary, walk away. This is true of any negotiation: you have to be willing to walk away if you can’t come to a win-win arrangement with the other party. This makes it all the more important to have done your homework to make sure your bare-minimum number is actually a reasonable one. If you run into several companies who can’t meet your minimum, you may need to double check your research to be sure you aren’t overlooking something.

Getting a new role within your company

This is a great opportunity to try and negotiate a higher salary. When you start a new role within a company, it’s likely the result of you having done a good job with your last role. You’ve got people on the inside who know and like you and can vouch for your quality. It’s a great situation to be in.

You should approach this the same way you would getting a job with a new company. know your target salary and know your lowest acceptable salary.

This approach did wonders for me in one instance. I had done extensive salary homework while pursuing a new position in my company. When the offer came with a salary lower than my low threshold, I said no thank you. After a week of further negotiations where I laid out exactly what I was looking for and how I arrived at that number. Using this approach, I was able to secure a salary almost 20% higher than the original offer.

Completing a degree or certification

When completing some sort of degree, certification, or professional designation, you should have a good sense for what this will do to your market value based on research using the methods above. Upon completion, be sure to inform your manager and the human resources department so that your HR files can be updated. Completing something like a degree means you’re better able to contribute to the company and are more marketable, and you should be compensated for this.

To pursue this, I recommend you wait a little bit to have this discussion during your annual review, which I’ll go over next. It’s also incredibly helpful to be able to demonstrate how you have actually used your new skills and knowledge to the company’s benefit.

Annual performance review

The annual performance review is the best time to ask for a better salary when you haven’t changed roles within your company. This is your one opportunity during the year where your company is actively asking you about how awesome you are. Smart engineers will take this opportunity to talk about their accomplishments, any education they’ve completed, and any certifications they’re received. If the review goes well, it’s an excellent time to ask for a raise. In many cases, the company is already prepared to provide a raise, so asking for one shouldn’t come as a shock to anyone.

Next steps

Next, I’d love it if you would actually go about doing your research and share what you find in the comments section below. Are you paid fairly or not? What’s your plan for closing the gap? Any lessons learned that others might benefit from? Share it all in the section below!

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