JUNE 2011 PROFESSIONAL ENGINEER REMUNERATION SURVEY SUMMARY REPORT

Transcription

1 JUNE PROFESSIONAL ENGINEER REMUNERATION SURVEY SUMMARY REPORT PRIVATE SECTOR SALARIES CONTINUE TO RECOVER The impact of the slowdown in economic activity precipitated by the global financial crisis of 8 has diminished significantly according to the results of the June APESMA / Engineers Australia Professional Engineer Remuneration Survey. The survey, conducted over March this year, reported an average annual increase in professional engineer salaries of % across all sectors combined. The result compares with an annual increase in salaries of.9% reported in June. Average Annual Increase (%) GRAPH - ANNUAL SALARY INCREASES BY EMPLOYMENT SECTOR VS ECONOMIC INDICATORS The Australian Bureau of Statistics Consumer Price Index rose by.% in the months to the end of March % GRAPH ANNUAL SALARY INCREASES - JUNE REPORTS All Private Public All Private Public Mfg Non-Mfg AWE (Feb ') Sector CPI (Mar ') whilst the Average Weekly Ordinary Time Earnings series rose by.9% to the end of February. The non-manufacturing sector reported an average increase in salaries of.%, whilst the manufacturing sector, comprising mostly private sector respondents, reported an average increase in salaries of %. Graph shows a recovery in the rate of increase in private sector salaries with annual salaries in the sector rising much more quickly than a year earlier,.9% () v.% () Mining or Quarrying Oil/Gas Explrtn/Prodn Industrial Machinery Food, Beverage & Tobacco Consulting & Tech Services Construction, Contract, Maint. Chemical & Petroleum Water, Sewerage & Drainage Transport & Storage Other Non-Manufacturing Electricity & Gas supply Communication inc Telstra Public Admin Other Manufacturing Defence Appliances and Electricals Transport Equipment TOTAL GRAPH - AVERAGE ANNUAL SALARY INCREASES BY INDUSTRY The average rate of increase in salaries of % reported amongst public sector employees was in line with the level of increase reported of recent years for the sector. The result reflects the greater reliance on industrial instruments to deliver salary increases. Remuneration of private sector employees could be seen to be generally more reactive to short-run economic conditions within a largely deregulated salary market. 7 average increase (%) The average annual increases reported by specific industry were as shown in Graph.

2 Mean Annual Increase (%) Annual Salary ($) Median Annual Package Value ($) JUNE PROFESSIONAL ENGINEER REMUNERATION SURVEY SUMMARY REPORT,,,,, GRAPH MEDIAN TOTAL PACKAGE BY RESPONSIBILITY LEVEL 7,8 9,9 8,, Level Level Level Level Level Above Responsibility Level 7,8 9, Graph illustrates the relationship between remuneration and responsibility level, and shows respondents above Level earning more than three times the average total package incomes of those at Level. Total package is defined as the sum of base salary, employer superannuation contributions, value of employer-provided motor vehicles, performance pay, and the value of any other cash and non-cash benefits provided. 8, GRAPH GRADUATE COMMENCING SALARIES,,, 7,, 8,, 9,8 9,9 Graph shows graduate engineer respondents commencing work during the last twelve months earned a median base salary of $8, on commencement. The amounts shown for graduates do not include compulsory employer superannuation contributions. Median Mean GRAPH MEAN ANNUAL INCREASE BY STATE/TERRITORY Graph shows that respondents located in Western Australia recorded the highest increases. WA SA QLD VIC NSW NT ACT TAS State/Territory GRAPH 7 MEAN ANNUAL INCREASE BY ENGINEERING DISCIPLINE Mean Annual Increase (%) Graph 7 shows that based on engineering discipline, chemical engineers reported the highest average increase in salaries of.8%, whilst aeronautical engineers reported the lowest average increases in salary of.%. Chemical Mechanical Other Electrical Civil and Structural Engineering Discipline Electronic/ Comm Computer Systems Aeronautical

3 JUNE PROFESSIONAL ENGINEER REMUNERATION SURVEY SUMMARY REPORT TABLE MEDIAN BASE SALARY & TOTAL PACKAGE ALL SECTORS ALL FULL-TIME RESPONDENTS Consulting & Tech Services Construction, Contract, Maint. Mining or Quarrying Oil/Gas Explrtn/Prodn Electricity & Gas supply Water, Sewerage & Drainage Communication inc Telstra Defence Public Admin Transport & Storage Education Other Non-Manufacturing Food, Beverage & Tobacco Wood and Paper Products Chemical & Petroleum Non-Metallic Minerals Basic Metal Products Steel Production Fabricated Metal Transport Equipment Appliances and Electricals Industrial Machinery Other Manufacturing TOTAL Level Level Level Level Level Above Level BASE TOTAL BASE TOTAL BASE TOTAL BASE TOTAL BASE TOTAL BASE TOTAL Median Median Median Median Median Median Median Median Median Median Median Median, 7, 7,7 89, 9, 8,8, 7,9,88 77,89,,8 7,97,9 7,788,8 97,9, 7,7,8, 89,87,,9 79, 8,,,, 7, 9, 8,77 8, 8, 8,,8 7,9 8,78 87, 97,9 7, 8,8, 8,8,,79,, 7,7 78,9 9,9 9,9, 7,77,,89,,9, 7,7, 77,9 7, 8, 9,7 8,8, 9,, 7,7, 7,88,, 8,9,9 99,,7 9,,,,, 8,9 8,,8 8, 9, 99,,,,8, 9,9.. 8,8, 7, 8,9 87,87,87 8,, 8,,98, 8,,79, 8, 9,9 9,,98,7, 9, 97,8 98, 7,.. 7, 77,9 8, 89,77 9,,,,9,,9 9,8,8 9, 8,8 88, 9,9, 9,, 8,,,.. 7, 78,,,78 7, 9,97, 7, ,,8,,7, 8,9.. 7,,..,,9,7,99 7,8 7,.... 8,7,9 98,,, 9,7 7,, , 9, 8, 9,7, 7, 9,,9.., 7,7 7, 88,7 9,, 87, 7,,9 8,.., 9,9.. 8,,,,,7 8,8.. 8,, 9,,9 97,7,88,, 9,,.. 8,,.. 9,7,, 7,9,8 9,78 9,, 7, 9, 7, 99, 78,8, 99,,,,87,,89.. 8,7 7,78 8,9,8 8,77 9,8 9, 87,87..,9 7,88 77, 9,9 98, 8,,,, 7,, 9, TABLE BASE SALARY & TOTAL PACKAGE BY YEARS OF EXPERIENCE ALL SECTORS ALL FULL-TIME RESPONDENTS Less than to less than to less than to less than to less than to less than to less than 7 7 to less than 8 8 to less than 9 9 to less than to less than to less than to less than to less than 8 8 to less than to less than to less than to less than or more TOTAL N BASE SALARY Median Mean TOTAL PACKAGE 8,, 8,9, 7, 8, 9, 9,9,9 7,8 8,9 7,,,8, 9,7 7,,9 9,9, 7,8 79,77 9,9 7,,, 8, 77, 87, 9,9, 7,8 8, 9,77, 8,7,7 8, 8, 9,, 8,77 7, 8, 99,,8,, 9 7,98 7,87 7, 87,, 8,87 9, 77,9 8,,,97 9, 9, 77, 8,7,, 89,78 79, 87,,, 8,8, 9, 78, 8,, 8, 97,8 78,8 89,,8 8,78,88,87 8, 8, 9, 7,7, 98,7 9,,87,,79,9,8 7, 8, 98, 7, 7, 99,9 8,8 9, 9, 7,,9 9, 7, 8, 9,8,,78, 8,8, 8,89 9, 8,9 7,89 7,7 8, 97,9,77,,7 8, 98,,9,78 8,8 8, 7 8,,, 7,,,8 9,77,78,89,9 8,8,9 8,79 9,8,,,, 99,8,,7, 9,, 8 7, 9,,,,7,8 9,9,7,8,9 9,,9 8,8 9, 9,8,,,,8,77,9 78, 7, 9, 87 87,,, 8,79 7, 8,,7,8, 79,88 8,,8 87,7,,7, 9,,,,97, 9, 7,8 9,9 89,77,7,, 9, 8,7,,,7 9,88, 8,9 9,,,,,,7 9, 9,87 7, 9,78,79 7,8 9 7, 88,9 9,779 7, 7, 7,877 8,9,779, 7,,, Median Mean

4 JUNE PROFESSIONAL ENGINEER REMUNERATION SURVEY SUMMARY REPORT A trend in the employment of professional CONTRACT engineers RATES is the increasing number opting to practice as contract engineers. Employers of professional engineers are making greater use of such arrangements as a means of meeting peak workloads or to engage contract professionals for specific projects or tasks. The Australian Bureau of Statistics estimates that up to per cent of the workforce are now engaged in non- standard work arrangements with professionals operating as independent contractors or consultants among the fastest growing group. Ultimately, the hourly rate charged depends on the market for the service provided and there is no substitute for specific knowledge of the particular industry and the value of the service being offered to a client, but these rates can be used as a benchmark to ensure that contractors don t undercharge for their services. These hourly rates should be read in conjunction with APESMA s Standard Terms of Engagement and APESMA s Guide to Writing Contracts for Independent Contractors and Consultants. Both documents take account of important issues arising from changes to Personal Services Income rules effective July. The changes will potentially impact on contractors and consultants engaged on an hourly basis. These documents are available to members from APESMA s website at The hourly rate for contract engineers takes into account the conditions of employment which apply to employee professional engineers, as contract professional employees must meet this cost themselves. Professional engineer employees have access to the Australian Industrial Relations Commission and receive annual leave, sick leave, paid public holidays, long service leave, superannuation, jury leave, compassionate leave, family leave, professional development and retrenchment/ redundancy provisions. The contract engineer may be engaged on an hourly basis and generally does not have access to these provisions. The contract engineer must take such provisions into account when determining the hourly fee to be charged. Based on a 8 hour week, the hourly fee is calculated using a 98 hour year (i.e. 8 hours by. weeks) and deducting from the year the following factors: Public Holidays days 9 hours Annual Leave days hours Long Service Leave. days hours Sick Leave days 7 hours Salary Continuance % hours Superannuation % 98 hours Professional Indemnity (inc public liability) % hours Misc. leave (family, jury, etc) days hours Professional Development days 8 hours Termination/Redundancy days 8 hours TOTAL 77 hours Base Salary GRAPH 8 COMPONENTS OF HOURLY RATE FOR CONTRACT WORK Thus the hourly rate should be calculated on the basis of about hours (98-77). If relevant, travel costs and workers compensation would be on top of these rates, and it may be necessary to factor in an additional charge to cover legal and accounting fees. Care should also be taken when to allow for rising professional indemnity insurance premiums. ASIC fees may also need to be covered depending on the particular business entity or structure the consultant or contractor has in place. If the contract engineer is engaged through a contract agency, their workers compensation/disability insurance and superannuation contributions (of 9%) are paid for by the agency and these components in the above calculations would be altered accordingly. If the contract engineer is engaged on a short-term basis, a further factor should be included to allow for the time and overheads involved in seeking contracts. A factor of % would not be unreasonable for this purpose. The hourly rate should then be based on hours. To use the formula described here, should a contract engineer seek a salary equivalent of say $, per annum then the hourly fee would be as follows: Short-term contract Long-term contract SHORT TERM ($ p/h) Superannuation Professional Development Sick Leave Annual Leave $,/ hours = $. p/h $,/ hours = $. p/h The survey found little movement in the the median hourly rate of pay compared to the previous survey. For short-term contractors a median rate of $ was reported compared to $ for long-term contractors. These rates do not include GST. LONG TERM ($ p/h) Level -7 - Level Level 9-8- Level - 9- Miscellaneous Leave Public Holidays Long Service Leave Salary Continuance Professional Indemnity Termination/Redundancy Level -7 -

5 JUNE PROFESSIONAL ENGINEER REMUNERATION SURVEY SUMMARY REPORT RESPONSIBILITY LEVELS DEFINITIONS LEVEL PROFESSIONAL ENGINEER The graduate engineer (as defined) commencement level. The engineer undertakes initial professional engineering tasks of limited scope and complexity, such as minor phases of broader assignments, in office, plant, field or laboratory work. Under supervision from higher-level professional engineers as to method of approach and requirements, the professional engineer performs normal professional engineering work and exercises individual judgement and initiative in the application of engineering principles, techniques and methods. In assisting more senior professional engineers by carrying out tasks requiring accuracy and adherence to prescribed methods of engineering analysis, design or computation, the engineer draws upon advanced techniques and methods learned during and after the undergraduate course. Training, development and experience using a variety of standard engineering methods and procedures enable the professional engineer to develop increasing professional judgement and apply it progressively to more difficult tasks at Level. Decisions are related to tasks performed, relying upon precedent or defined procedures for guidance. Recommendations are related to solution of problems in connection to the tasks performed. Work is reviewed by higher-level professional engineers for validity, adequacy, methods and procedures. With professional development and experience, work receives less review, and the professional engineer progressively exercises more individual judgement until the level of competence at Level is achieved. The professional engineer may assign and check work of technical staff assigned to work on a common project. LEVEL PROFESSIONAL ENGINEER Following development through Level he/she is an experienced engineer (as defined) who plans and conducts professional engineering work without detailed supervision, but with guidance on unusual features and who is usually engaged on more responsible engineering assignments requiring substantial professional experience. LEVEL PROFESSIONAL ENGINEER A professional engineer performing duties requiring the application of mature professional engineering knowledge. With scope for individual accomplishment and co-ordination of more difficult assignments, the professional deals with problems for which it is necessary to modify established guides and devise new approaches. The professional engineer may make some original contribution or apply new professional engineering approaches and techniques to the design or development of equipment or special aspects of products, facilities and buildings. Recommendations may be reviewed for soundness of judgement but are usually regarded as technically accurate and feasible. The professional engineer makes responsible decisions on matters assigned, including the establishment of professional engineering standards and procedures, consults, recommends and advises in speciality engineering areas. Work is carried out within broad guidelines requiring conformity with overall objectives, relative priorities and necessary co-operation with other units. Informed professional engineering guidance may be available. The professional engineer outlines and assigns work, reviews it for technical accuracy and adequacy, and may plan, direct, co-ordinate and supervise the work of other professional and technical staff. LEVEL PROFESSIONAL ENGINEER A professional engineer required to perform professional engineering work involving considerable independence in approach, demanding a considerable degree of originality, ingenuity and judgement, and knowledge of more than one field of, or expertise (for example, acts as his/her organisation s technical reference authority) in a particular field of professional engineering. The professional engineer: initiates or participates in short-range or long-range planning and makes independent decisions on engineering policies and procedures within an overall program; gives technical advice to management and operating departments; may take detailed technical responsibility for product development and provision of specialised engineering systems, facilities and functions; co-ordinates work programs; and directs or advises on use of equipment and material. The professional engineer makes responsible decisions not usually subject to technical review, decides courses of action necessary to expedite the successful accomplishment of assigned projects, and may make recommendations involving large sums or long-range objectives. Duties are assigned only in terms of broad objectives and are reviewed for policy, soundness of approach, accomplishment and general effectiveness. The professional engineer supervises a group or groups including professional engineers and other staff, or exercises authority and technical control over a group of professional staff, in both instances engaged in complex engineering applications. LEVEL PROFESSIONAL ENGINEER A professional engineer usually responsible for an engineering administrative function, directing several professional and other groups engaged in inter-related engineering responsibilities, or as an engineering consultant. Achieving recognition as an authority in an engineering field of major importance to the organisation. The professional engineer independently conceives programs and problems to be investigated and participates in discussions determining basic operating policies, devising ways of reaching program objectives in the most economical manner and of meeting any unusual conditions affecting work progress. The professional engineer makes responsible decisions on all matters, including the establishment of policies and expenditures of large sums of money and/or implementation of major programs, subject only to overall policy and financial controls. The professional engineer receives administrative direction based on organisation policies and objectives. Work is reviewed to ensure conformity with policy and co-ordination with other functions. The professional engineer reviews and evaluates technical work; selects, schedules, and co-ordinates to attain program objectives: and/or as administrator, makes decisions concerning selection, training, rating, discipline and remuneration of staff.

6 JUNE PROFESSIONAL ENGINEER REMUNERATION SURVEY SUMMARY REPORT TERMS USED For the purposes of analysis, the following statistics were used: decile the value below which % of data was recorded. quartile (Q) the value below which % of data was recorded. Median the value below which % of data was recorded. quartile (Q) the value below which 7% of data was recorded. decile the value below which 9% of data was recorded. Mean the sum of individual values divided by the number of data items. Base salary annual salary excluding allowances or noncash benefits Total Package annual salary plus the value of all components of remuneration items such as motor vehicle, performance pay, superannuation, overtime & award allowances. ONLINE ACCCESS Members of APESMA and subscribers to the Professional Engineer Remuneration Survey Report are able to access salary results on the APESMA website. Users can select a combination of position-related parameters and query the database to return specific remuneration levels related to the query. Parameters by which analysis may be performed include state, industry, qualification, years of experience, employment sector, scientific discipline and responsibility level. The Professional Engineer Remuneration Survey Report Online is available at Members will need to use their membership number to login. ABOUT THE SURVEY The Autumn Professional Engineer Remuneration Survey was conducted during March using a random selection of members of the Association of Professional Engineers, Scientists and Managers, Australia and the Institution of Engineers, Australia. Two thousand, three-hundred and thirtythree completed questionnaires were returned and were used for the analyses contained in the report. HOW TO ORDER This extract is a summary of the full -page Professional Engineer Remuneration Survey Report. Non-members can purchase a single issue for $9 (inc. GST), or can subscribe for a full year (two editions) for $9 (inc. GST). APESMA members receive a significant discount on these prices, but cannot purchase the report on behalf of any third party at the discount price. PROFESSIONAL ENGINEER REMUNERATION SURVEY REPORT JUNE For more information about purchasing the Professional Engineer Remuneration Survey Report, visit the APESMA website at where you can download and complete an order form or order online via our secure e-commerce facility. If you have any questions, please contact the Surveys Unit via survey@apesma.asn.au or phone () Copyright by The Association of Professional Engineers, Scientists and Managers, Australia. All rights reserved. No part of this work may be reproduced, used or stored in any form, especially typographically, electronically and including photocopying, without written permission of the publisher. The use of material for private study, research or criticism is excepted from the reservation and may be undertaken within the accepted meaning of fair dealing. The publisher makes no representation, in any form, as to the accuracy of the information contained in this work and cannot accept any legal responsibility for errors, omissions or consequences of any action taken by readers. ISSN -79 The Association of Professional Engineers, Scientists and Managers, Australia (APESMA) GPO Box 7 MELBOURNE VIC Ph/Fax: () survey@apesma.asn.au Website: