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Engineering Compensation: The Return of Hiring Bonuses

Engineering Compensation: The Return of Hiring Bonuses

The race to recruit STEM college graduates is encouraging companies to engage students early on as part of their internship programs. These timely interactions can help fill the talent pipeline for years to come. Meanwhile, the recruitment process itself often involves a complex discussion around compensation and benefits.

As the engineering staffing experts point out below, rising competition for talent has boosted pay expectations overall and seen the return of hiring bonuses as part of the recruiting conversation.   

Jay Rogers, Vice President of Recruiting, Randstad Engineering
“Employers need to look internally at what they’re paying, but also research who else is hiring for the same skill set, and what they’re paying. For example, the medical device world is very competitive right now, but a mechanical engineer in Atlanta is going to be different than one in the Boston area. You need to research — not only to attract new talent, but also to retain your current talent.”

“We recommend that clients are very open about total compensation from the very beginning. Talk about base pay, any bonus potential, paid time off, health and retirement benefits, any stocks and sign-on bonuses. You don’t want to interview a candidate on the phone and then bring them in for 2 or 3 or 4 interviews in person, make the job offer and then find out that you’re nowhere in the ballpark of what they were looking for. It wastes their time and your time.”

“Larger companies might offer stock options or stock purchasing possibilities, or performance share bonuses. There may be a vesting time associated with that too.”

“Most everybody isn’t allergic to a little higher pay. Whether you’re working with a recruiter or directly with the candidate, if the candidate says, “I’m currently making X, and I’m looking for X+1,” your offer needs to be equal to or greater than X+1. If it’s less than that, the candidate will be a little upset. Have those upfront conversations and don’t waste everybody’s time.”

Steven Lewis, Director, Michael Page
“The average salary for a recent engineering grad is $55,000 to $60,000. And there is a major skills gap. There isn’t enough supply for each job. The more technical the role, the bigger the problem is to fill the position.”

“The must-have for hiring engineers is a bonus, typically 5 to 15 percent, based on hitting project timelines.”

“It depends on who you are looking for. The Millennial generation tends to be more motivated by base salaries, whereas people with more experience are more interested in solid base salaries and good benefits, healthcare and bonuses. The more experienced engineers are often interested in a long-term incentive or equity, which is a major draw.”

Peter Gault, President of Gault Staffing
“Companies are paying much closer attention to budgets for wages and salaries. Factoring in the usual basics of education, skill and applicable ability, employers are looking for engineers who can take on highly interactive roles with the clients they serve. The market for engineers is becoming tighter and tighter, primarily in the areas of mechanical design and aerospace; as such we're seeing employers who are budgeting for stronger starting wages.”

“Compensation packages that stand out, especially with smaller firms, include more vacation time, such as three weeks, often available for use after only six months of employment. A growing number of smaller engineering and engineering design firms are getting creative with time-off benefits, recreational benefits, even engaging other local businesses like restaurants, theaters and so on to offer special employment perks.”

“Within the engineering category, be it manufacturing and industrial, land development and civil, or IT related, hiring bonuses are seeing a comeback. Where bonuses and long-term incentives are involved, we're seeing offerings tied to bringing designs in under budget, or tied to unique patent developments with long-term residuals. The 10-year or 20-year watch has little to no meaning to the new and developing workforce. They're much more focused on the quality of life. Employers who can provide a stronger balance between work life and home life will likely discover the tenure of their employees increase.”

Laura Shoults, Senior Recruiter, Engineering and Operations, Versique Search and Consulting
“When a company needs some specific technology experience or they’re looking for a harder-to-find skill set, that compensation package will go well above the norm to attract them and pull them in.”

“An employer will bend on the tech experience if communication skills are strong. They’re looking at cross-functionality within the organization. Most companies aren’t as siloed as they use to be, and someone with strong communication skills can help with that. Strong communication is also needed for leadership positions.”

“Make sure you’re looking at the total compensation package. Engineers are detailed and analytical, so be explicit about what you consider as your compensation package. Bonus, profit sharing, work-life balance or vacation – some engineers will talk about those in dollar amounts — so a total compensation package is important.”

“Other creative things I’ve seen include covering COBRA costs between a resignation and the date benefits start after hire and delayed sign-on bonuses that pay out at three months and six months. That’s not just an attractor, but an attractor to stay.”

“Employers should come to the plate with the best offer first. If there’s a negotiation, people don’t feel quite as valued.”

Jamie Seward, Director of Recruiting, Adecco Engineering & Technology
“Engineering candidates are seeking jobs at a time when market conditions are in their favor.  There’s an increasing need for these specialized skill sets, and the best candidates often have choices on competing opportunities."

"We’re seeing that the most competitive companies are the ones that have realized this and adjusted their compensation packages to attract and retain top talent. Employers are re-evaluating their benefits packages, perks, relocation options and even company cultures to make sure they are not only attractive to potential new hires but stand the best chance of retaining the talent they have.”

“Over the past five years, demand for talent has increased consistently across all areas of engineering. As a result, we are seeing a lot of upward pressure on base salaries and in more specialized or experienced roles. It’s realistic that a company would offer higher compensation than in the past in order to win over a top candidate.”