A scarcity of in-house engineering ability is one of the leading workplace concerns among engineers in the public sector, an industry report reveals.

Data from the Association of Professional Engineers Australia’s Professional Engineers Employment and Remuneration Report 2018 shows 53.5% of public sector respondents saw an increasing lack of in-house engineering capacity as a major issue in their workplace during the past 12 months.

Speaking to intouch about the report’s findings, Professionals Australia Survey Manger Alex Crowther says a lack of in-house engineering capability had emerged as a concern in the past few years, and was recently incorporated into the survey.  

“Professionals Australia had been hearing complaints from engineers for a number of years regarding the diminution of engineering capability within organisations, particularly in the public sector,” Crowther says.

“Engineers were frequently being made redundant, only to have their function replaced with external contractors. External contractors serve important functions within the Australian economy, but there are many costs involved in contracting out important functions.

“With so many engineers coming to us with this issue during the course of Professionals Australia providing direct support to members, it was important to start collecting data on the concern to track the scale of the issue.”

The report gathered 2735 responses from Professionals Australia members and non-members.

Anonymous comments included in the report show some of the specific concerns engineers have about de-engineering: 

“The taxpayer’s money is not being spent efficiently. There is huge wastage on poorly managed consultants and contractors who are often just looking to set themselves up for their next job. The public service is totally deskilled.” 

“They can’t get good engineers at the rates of pay offered. They would rather outsource which costs more in the end.” 

 “Most technology work is outsourced. This means we develop minimal expertise in-house. Knowledge of our critical systems are held by one contractor who now can charge us three times the market rate. That means ratepayers pay more.” 

Crowther says it’s a concerning trend that can have wide-ranging impacts.  

“Engineers bring their technical competence to decision-making about in-house projects and costing and feasibility scoping to projects. You can outsource those functions, but If you outsource too many of those functions you become an uninformed purchaser,” he says.

“Organisations without sufficient in-house engineering capability will struggle to make effective decisions around resource allocation, lack the talent to assess submissions for tenders they put out, and be beholden to contractors who may not have the same priorities as the organisation engaging them.”

It’s not just the organisation that potentially pays the price; Crowther says it creates a problem for individual engineers where their skills are devalued, seen as external to an organisation and they are overlooked for promotion or career development.

“As part of our Engineering a Better Future campaign, Professionals Australia is explicitly pushing for organisations that engage in engineering activities to employ chief engineers and ensure strong engineering capability at decision-maker level,” he says.

“Clearly the issue is an important one. With greater engineering skill in the public sector having the potential to deliver $8 to $16 billion in savings by reducing waste over the next decade, we expect that it’s going to be a key priority going forward.”

Stymying innovation

Another key finding from the report was that 24% of public sector respondents said their organisation did not actively regard engineering capability as a source of innovation, compared with 9.8% of engineers in the private sector.

Crowther believes this is a direct result of a lack of in-house engineering capability, with engineers at risk of becoming de-motivated and overworked.

“As organisations, particularly in the public sector, have outsourced engineering functions to external consultancies, they’ve begun to disconnect from the value an engineering workforce contributes,” he explains.

“Engineers are the front line for implementing new technology and processes. Their expertise allows organisations to find safe and efficient ways to improve on what they’re doing. If you outsource your engineers, or overwork your in-house engineers by depleting their workforce, you stop seeing those innovations – not because the talent is gone, but because all their efforts have to be focussed on the projects at hand with so few to share the workload.

“The reality is that greater skills development and support for engineering workforces that gives them an opportunity to pursue innovation has far greater potential to reduce costs for an organisation than shaving the number of engineers and their functions. Infrastructure building and maintenance is clearly just as crucial to economic growth in this era as it was over the last century. The difference now is the pace and nature of change and in turn the professional capacity we need to see the potential and harness it.

"There’s widespread disruption – to government funding priorities, from policy changes at the state and federal levels, from technology shifts and shifting stakeholder expectations. For Australia to benefit, engineering capability must be at the heart of making the most of these disruption opportunities in both the private and public sectors.”

Strong wage growth, accreditation matters

There is, however, a lot to be optimistic about for engineers. The size of the professional engineering workforce is holding at historically high levels, and the report also showed that respondents working full-time who had been in the same role for 12 months or more reported a median increase in their base salary of 2.5%, exceeding the Consumer Price Index (CPI) and Wage Price Index (WPI).

“It means that not only are the earnings of the average engineer increasing ahead of the cost of living, but ahead of other professionals,” Crowther says.

“Wage growth can be seen as a proxy for demand for skills. When skills are in demand you need to offer attractive remuneration packages to retain those skills.”

Whether or not they hold accreditation was shown to impact how much money an engineer earns.

“One of the key takeaways from the survey is that on average engineers that hold an accreditation earn more than their non-accredited peers. The value of that accreditation was much more marked for engineers working autonomously but in an early stage of their career, or those working in a highly-responsible role managing a large team,” Crowther says.

“Better pay for engineers holding accreditation isn’t surprising. Whether mandatory by state law or not, pursuing accreditation demonstrates a commitment to the profession, and importantly a commitment to remaining upskilled.”

But gender wage gap continues

Crowther was quick to point out that there was another key factor that determined an engineer’s wage: gender.

The reported earnings of survey respondents confirmed a gender pay gap in engineering with an average base salary of $111,753 for full-time male respondents compared to $99,872 for their full-time female counterparts.

“With a 4% increase in the participation rate of women over the next decade potentially adding $25 billion to the economy, there is a national economic imperative for gender diversity in science, technology, engineering and mathematics as a mainstream economic and workforce development issue and a key economic reform priority for the coming decade,” Crowther says.

Crowther thanked everyone who participated in the 2018 survey.

“We had some of the highest responding rates we’ve had in years thanks to contributions of association members and non-member engineers. We hope all engineers who found the report interesting participate so we can continue to provide the most up-to-date and accurate benchmarking of Australia engineering working conditions.

Professionals Australia will circulate the next survey in April/May 2019.