Are Salaries, Not Skills, Keeping Automation Jobs Unfilled?

Fast-growing industries like oil and gas and mining are capturing skilled engineering resources by paying higher rates. What must food and beverage plants or small machine builders do to find the qualified engineers, operators and technicians they need? 2014 may require new strategies.

Automation World’s news feed has been filled lately with stories of upgrades, expansions and technology retrofits. Industrial plants, utilities—and their automation and machine-builder suppliers—seem to be in the midst of that U.S. manufacturing renaissance so many have predicted. Others, having downsized to survive or making due as retiring employees take their leave, are feeling the affects of all this activity too.

Enterprises—large and small—say automation-related vacancies are occurring and are difficult to fill. To find out if the problem is a skills gap or something else, Automation World conducted a survey (see “The Search for Skilled Workers”). While 57 percent of respondents said that a lack of skills among those applying was the main reason for the difficulty filling positions, a quarter of respondents also believe that low pay contributes to the problem.

“To be honest, there is a reasonable amount of people available for industry, but low pay is driving out North Americans from this sector,” commented one respondent. “Chinese economics rule… so industry continues to offshore their manufacturing or is importing foreign workers under the guise of unavailability, yet the real lie is low pay scales.”

Something similar happens in Germany, according to another respondent: “Lack of skills is described as a bigger problem than it is, in order to push down the salary of the already-working people. German engineers have been compared with foreigner engineers from other European or extra-European lands. Foreigner skilled employees sometimes are ready to accept low salary in comparison with the standard of the industrial sector: This fact is used to scare skilled people in order to force acceptance of a lower salary.”

While these examples are anecdotal, they point to a real issue that every company who needs engineers, operators and industrial technicians needs to be aware of—getting the right people with the right skills may require paying more than you have in the past.

Automation salary information published by the International Society for Automation (ISA) revealed almost no increase in average salary from 2011 to 2012, but a “respectable” increase of 4.4 percent from 2012 to 2013. Fast-growing industries like oil and gas and mining are capturing skilled engineering resources by paying higher rates. North American automotive suppliers are expanding their engineering staffs in response to new vehicle programs, and are paying bonuses to get the talent they need. Competition for industrial software engineers, HMI/PLC programmers and manufacturing IT specialists is especially fierce, in part because of better pay for computer scientists in other industries.

Crain’s Detroit Business reports that data from Michigan State University's College of Engineering shows that starting salaries for engineers are rising. 2013 data shows “the average starting salary for MSU engineering graduates is $62,900, up from $56,200 in 2008. Starting salaries for computer scientists average $71,900, up from $60,600 five years ago,” said the report.

Bill Eppich is vice president of Weiss North America, said, “we decided to spend a little more money and got experience” when he looked for and hired additional engineers earlier this year. Located 10 miles east of Cleveland, Ohio, Weiss North America is a 25-person wholly owned subsidiary of Weiss Gmbh, a $75 million manufacturer of assembly plant products including rotary barrel cam indexers, tooling plates and machine bases. Sales had tripled since 2007 and the Cleveland facility was expanded by 15,000 sq. ft. to accommodate the growth.

“We were fortunate. We went to a warm market first: people I know or I have a relationship with. The last two [engineering] new hires were people I’ve worked with, or who were referred by people I’ve worked with. On the production side, it’s more difficult, but if you’re willing to spend the money, you can get what you need.”

Eppich’s additional advice for finding skilled workers is simple: “We made a focused plan and put together a distinct job description. We held to that job description and we didn’t settle for second best, even if it took four or five months.”

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