What is the average salary for a mechanical engineer? What specific attributes or achievements are firms seeking when offering promotions? Should you expect more money if you attain a professional engineering (P.E.) license? What role has the COVID-19 pandemic had on engineering salaries?
We have the answers to these questions and more, courtesy of a survey of 100 engineering firms conducted by ClearSeas Research, the research branch of BNP Media — parent company of Engineered Systems.
We’ve combined that data with additional research and interviews to present this 2021 “State of the Salary” exposition.
A Google search for the “average mechanical engineering salary” provides quite a rabbit hole of responses. According to Salary.com, the average annual pay for an HVAC engineer in the U.S. is $70,572. Zip Recruiter reports the average salary at $82,752. On the upper echelon of the pay spectrum, our ClearSeas Research study notes the average annual salary at $107,707.47.
By averaging figures from 10 reputable websites, we determined the average mechanical engineering salary in 2021 at $82,500 (see Figure 1).
Average engineering salaries across 10 different salary-based websites.
Where Do You Fall on the Pay Scale?
Rushing, a Seattle-based integrated engineering and sustainability services firm, reports its average annual engineering salary at $110,443. Regardless if an engineer has five days, five months, or five years of experience, the firm works diligently to offer competitive salaries across the board, said Sara Young, director of business services.
“While we currently do not employ any entry-level HVAC engineers, our average salary for an engineer at that experience level would be closer to that industry average of $82,500,” she said.
McClure Engineering is a 67-year-old, St. Louis-based mechanical and electrical consulting engineering firm that boasts a staff of more than 80 mechanical and electrical engineers and designers. The entry-level salary for a new engineer right out of school with no prior experience ranges around $60,000-$65,000.
“Candidates who come to us with some prior experience will see a slight bump and are compensated in a range of $60,000-$81,000,” said Mike Contrera, HR director. “Our experienced engineers are compensated in line with the range of salaries featured in Figure 1, and engineers who are managing projects are often compensated at the higher end of that range.”
SmithGroup is a multidiscipline firm employing more than 1,200 people across 15 offices, ranging from Ann Arbor, Michigan, to Shanghai. A number of factors, including location, responsibilities, and experience, influence the amount the firm pays an engineer at each of its locations, said Cindy Cogil, principal, director of engineering.
“We tend to apply the Dietrich salary survey and pay particular attention to the regional differences,” she said. “We use a lot of metro regional information as well as national averages. For a firm of our size, each region is different. We've been growing engineering in certain parts of the country where we didn't have that service before, so the compensation makeup within those locations can be really skewed high or low, depending upon where we are at in our growth process.”
Ten states with the highest engineering average engineering salaries, according to the U.S. BLS.
For new hires, SmithGroup evaluates the average salaries offered to outgoing students from the university or school where they studied.
“We tend to use data from universities spanning back a couple of years, paying attention to salaries across each area of specialization,” continued Cogil. “This helps us understand the demand for students in various engineering options as well as what constitutes a competitive offer for salary and bonus.”
Among those schools is Kansas State University, which graduates 50-60 engineers annually. According to Ray Yunk, professor, architectural engineering and construction science, about half of all graduating students choose HVAC as their specialty.
“Our students are finding jobs with salaries averaging just under $65,000 per year,” he said. “In addition to this $65,000 base salary, their average signing bonus is around $2,500, ranging from zero to $7,500.”
ClearSeas Research: How many people are employed by your firm?
Time for a Raise
According to the BNP Media survey, 61% of respondents reported 6.74% higher salaries in 2019 than 2018. Forty-nine percent attributed this increase to a cost-of-living raise, and 46% said the increase was due to a bonus or compensation increase. Other reasons included company success, improved economic activity, and increased responsibility.
Glumac, a San Francisco-based mechanical, electrical, and plumbing (MEP); commissioning; and building optimization firm, employs approximately 300 individuals. The firm, which is a Tetra Tech company, performs annual reviews.
“Compensation adjustments are done once a year, typically in June, unless there's been a significant change in role,” said Staci Atwater, associate, project manager/mechanical engineer.
McClure also reviews salaries and titles on an annual basis.
“We offer mid-year equity adjustments for employees, where we take into account those who excelled on projects throughout the year and look to spot bonus them or, in some cases, raise their salaries in line with their abilities,” Contrera said. “Additionally, junior engineers receive compensation increases as they begin to show ownership and the ability to effectively manage projects.”
Yunk notes that new hire salaries tend to grow annually. Over the last five years, the average entry-level salary has increased around $1,000 every year, though that number fluctuates based on location, he said.
“Sometimes pay goes up by $500, and sometimes it goes up by $1,500,” he said. “Location is a major factor. We're heavily focused in the central U.S., and Kansas City is among the biggest markets in the nation. Dallas is another popular landing spot, and both of these areas carry relatively moderate costs of living, so entry level salaries may be a little lower there than they are in Chicago or Washington, D.C.”
It Pays to Be a Professional
Fifty-six percent of respondents to the ClearSeas survey hold P.E. licenses.
Glumac encourages its engineers to obtain a P.E. license and rewards them accordingly.
“Obtaining a P.E. license is an indication of a person’s interest in upward movement," Atwater said. "It shows they’re ready to take on more responsibilities. If we’re hiring for a position, and two people have the same experience, though one has a P.E. or WELL AP or LEED AP credentials, we take that into consideration. Licenses and credentials are a strong factor during the hiring process.”
SmithGroup recently implemented an immediate 5% salary increase upon the receipt a professional licensure.
“We have around 85 people in our Chicago office, and six or seven individuals have already received this bonus,” Cogil said. “It has been a very well-received incentive.”
McClure Engineering also awards a spot bonus for employees who receive P.E. licenses.
“In addition to an immediate bonus, these employees are now taking on greater responsibilities, and their annual salary increases reflect that,” Contrera said. “Licensure has an impact on employee billing and the projects they can work on as well.”
The COVID-19 Crunch
The COVID-19 pandemic has had an impact on nearly all walks of life, including engineering compensation.
Last spring, McClure Engineering acted quickly to offset the pandemic’s looming impact.
“Early on, we froze some of our fringe benefits,” Contrera said. “That said, we ended up having a strong 2020 and were fortunate enough that we did not have to lower employment numbers or permanently reduce benefits. Our raises, which were halted for a couple of months, were reinstated back to their original retro dates, and all fringe benefits that were frozen have been reinstated.”
COVID-19 impacted SmithGroup’s ability to move ahead with several planned projects in 2020, which impacted the firm’s projected revenues.
“Early on, we did invoke some temporary furloughs,” Cogil said. “We did reduce employment in some locations within certain disciplines, but, at the same time, we've also hired to fill key roles. Regarding employee numbers, COVID-19 has been kind of a mixed bag.”
Clear Seas Research: What was your company’s estimated total annual revenue in 2019?
As more employees transitioned to working from home, SmithGroup offered staff members a helping hand through a COVID aid payment.
“At the end of 2020, everyone received a flat payment to help offset the costs of working from home, such as higher utility bills, faster internet speed, and improvements to the home office,” Cogil said.
Rather than lowering compensation or cutting benefits, Rushing’s opted to slow down hiring and focused on retaining its existing talent.
“Unfortunately, we did undergo some strategic layoffs in 2020,” Young said. “Our goal in 2021 continues to be retention, and while we never hope to do layoffs, we acknowledge we are operating in a precarious time, and remaining agile and responsive to the market is critical. As of February 2020, we employed 90 people; today, we have 83 full-time employees.”
Clear Seas Research: Which of the following registrations/licensures do you hold?
The pandemnic has delayed recruiting activity and limited employment options for many graduating seniors, said Yunk.
“It’s taking longer for our graduates to get jobs,” he said. “Usually, they sign on in the fall, before they graduate, though many more of our students’ job searches have extended into the spring semester this year. And, they're not getting as many offers, because firms are being cautious about adding staff. COVID-19 has certainly dampened the market a bit.”
Benefits and Incentives
The ClearSeas study reports 91% of responding engineering firms offer health insurance, and 74% offer dental insurance. Other popular options include vision, life insurance, 401(k), and continuing education.
Glumac offers health, dental, vision, and life insurance; short- and long-term insurance; and a few other attractive benefits and incentives.
Clear Seas Research: On Dec. 31, 2019, what was your annual gross income?
“We offer a 401(k) match up to 6% of an employee’s salary,” Atwater said. “We also offer PTO [paid time off] on a sliding scale based on seniority.”
Glumac also recently implemented an incentive to reward employee creativity.
“If you have an idea you think could help the firm, you can make a proposal, and the firm will reward you if the idea is implemented,” Atwater said. “We also offer recruiting bonuses on a sliding scale. If you bring in a new graduate, the incentive is a little lower, but if you bring in a principal, there’s a fairly decent bump given for that.”
SmithGroup allows employees to buy and sell PTO, granting them more flexibility with their time off.
“Employees can roll over PTO from year to year up to 320 hours,” Cogil said. “We also allow people to buy or sell up to five days of PTO. Rather than losing that incentive, we allow them to cash it in. Maybe someone is coming off of maternity leave or planning a trip to Europe. Individuals in those situations may be interested in buying a few extra days of PTO, so we offer that option as well.”
The firm also utilizes an 8 ½-hour workday, which aims to provide employees with some additional flexibility over the course of the year.
Clear Seas Research: By what percentage did your pay increase in 2019?
“That extra half hour every day results in 14-15 additional days off every year,” Cogil said. “So, while you don't really notice that extra half hour during the work day, you definitely enjoy the extra time off. This is really great for work-life balance and allows employees to plan a few extra days for themselves.”
Rushing offers medical, dental, vision, life insurance, short and long-term disability, an employee assistance program, and a 3% 401(k) safe harbor contribution regardless whether or not an employee contributes themselves. Additionally, the firm offers end-of-year bonuses and implemented a 1% discretionary profit-sharing contribution in 2020.
“On top of our benefits, Rushing employees enjoy a plethora of perks,” Young said. “Our Monday morning breakfasts, Friday happy hours, and monthly massages have temporarily been replaced by the occasional virtual movie night or Zoom happy hour. We had to pivot in a similar fashion for our end-of-year holiday party, but we made the most of a night filled with cocktail making classes, round of Family Feud, and historical trivia from the comfort of our own homes — raffle prizes and dinner courtesy of a doorstep delivery service kept the festive atmosphere alive.”
Mechanical engineering remains a very competitive occupation, and the COVID-19 pandemic has certainly increased this competitiveness as firms continue to thin the herd in an effort to operate as efficiently as possible.
The most successful firms will persistently navigate the challenges surrounding compensation, benefits, and bonuses as they strive to offer clients top-notch performance.
Clear Seas Research: What primary factors contributed to your 2019 pay increase?
Atwater said Glumac is very precise when it comes to filling key positions.
“We've been trying to hire the right electrical engineer in our Seattle office for a while, and our Orange County location has been working hard to find senior electrical engineers,” she said. “We’ve conducted a handful of interviews, but we simply haven’t found the right fit for our culture.”
“Engineering is not something that a lot of high school students tend to think about, and those who do tend to gravitate toward traditional electrical or mechanical engineering,” Yunk said. “As students age through the KSU program, several seem to find themselves in the HVAC line of study. Those who do tend to land jobs quickly and rarely are they disappointed with their careers.”