Building the Technical Workforce of Tomorrow -

Who Will Win the Great Talent Chase?

Paul J. Kostek, VP IEEE-USA Communications & Public Awareness

NEDA Conference 3 November 2008

Today’s Challenge

Competition for talent What steps are being taken to increase the

numbers of students entering engineering? How is the current engineering workforce being

utilized? How will companies compete for talent,

differentiate themselves and what impact will this have on business?

Where is the growth taking place outside the US and can we find ways to tap this?

The Current Numbers

Engineering Students Undergrads all disciplines

385,690

2006-2007 Degrees awarded 73,000 undergrad 30,000 MS 6,000 PhD

Engineering Population ~1.978 million

Bachelor’s Degrees, by Disciplines 2006-07 (73K)

Undergraduate Enrollments

What steps are being taken to increase the numbers of students entering

engineering? K-12 initiatives

Professional Societies Engineers in schools Job shadowing IEEE-USA Future Cities SAE Wheels in Motion

Trade Associations SIA Program to attract and retain undergrads

Companies Intel Science Fair Siemens

Federal Government COMPETES legislation

(response to NAE Study- Rising Above the Gathering Storm)

Competing for Talent

Industries Aerospace Computing (hardware and software) Web – based Gaming Green Semiconductors Utilities

Companies Google

Degrees growing in enrollments Bio-Med Environmental / Civil Engineering

Where is the growth taking place outside the US and can we find ways

to tap this? India China Vietnam Russia + former satellites

Even these areas are faced with retention problems

The Current Population

The conversation, whether in DC or Silicon Valley, centers on the next generation of engineers/scientists while seeming to forget there are over 1 million electrical engineers in the workforce.

Where do they fit in? Are we utilizing our current population? Does retention matter? Does how we treat the current workforce impact the

future workforce? Companies can now access engineers in Eastern

Europe, Asia and India, what will the impact be for engineers here in the U.S.A.?

Do we need to graduate more engineers , the same, or less?

The 4 Generations

For the first time ever we have 4 generations in the workplace – WWII Baby Boomers Gen X Gen Y

The challenge how to integrate these very different groups

Skills

The Challenge For Engineers:

Identifying in-demand skills and positioning themselves to fill them through:

Training Applicable experience

For Employers Finding engineers with in-demand skills Attracting/Retaining/Training

The Skills Market

Software Java Web 2.0 Software as a service Virtualization IPv6

RF design Analog Design ASIC Nuclear

Industries

Critical Infrastructure Protection Government/private industry

Utilities Nuclear Power Green Power (solar – wind- geothermal - wave)

IT Cybersecurity

Green revolution Autos/Transportation Buildings

Biomedical/BioTech

Other Factors to Consider

Salaries We’re not seeing salaries for professionals

climb at a rate that shows a shortage New Grads

CS $53,000 (vs $60K in 2000) EE $51,000

Working professionals 20 year EE – $108K (EE Times Salary Survey) w/avg increase 4%

Other Factors to Consider

Productivity Automation and tools

Skills Training, gaining applicable experience

and finding employment at appropriate level

Impact of outsourcing and use of foreign temp labor

What About the Boomers?

Working later, by choice or as a result of current economic situation

Large population that can be a resource to companies

Options to consider – Phased retirements Job sharing Telecommuting

What good is productivity growth to workers?

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Productivity Avg Earnings Production Compensation Median Hourly Earnings

Source:Average hourly earnings, production and supervisory workers, from Economic Report ofthe President 2006 Table, B-47Productivity, Real hourly compensation from Economic Report of the President 2006Table, B-49 with 2005 updated from http://frwebgate2.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=971353361824+9+0+0&WAISaction=retrieveMedian hourly earnings, Economic Policy Institutehttp://www.epi.org/datazone/06/wagecuts_all.xls

Offshoring and the Long Term Impact on Engineers and Competitiveness

Is offshoring the death knell for the engineering profession in the U.S.? Or will it lead to increased opportunities?

I believe the answer lies somewhere in between. Offshoring will kill opportunities in some fields and

industries, while opening up others. The question is will we have trained people to take

these positions and will they be positions people are interested in?

We shouldn’t presume that because positions are created that they will interest the current population.

How will we retrain and utilize engineers? What incentives will be provided to the engineer to move into new fields and relocate?

Impact of In-Shoring

We really don’t know the impact of non – U.S. companies locating here. How many U.S engineers are being

employed? How many are bringing over their own

employees – L1, H-1B? Could this lead to increased

opportunity/challenges?

Competing in a Global Marketplace

Doubling of global work force when China, India, x-Soviet join

Human resource leapfrogging: developing countries invest in university education; multinationals spread modern technology

trade, offshoring, immigrationGreater supply competitionShift in balance toward capital More difficult for market forces to help workers

Source: Richard Freeman

Opportunities

Technologies Software Semiconductors Sensors

Industries Power Telecom Defense and Homeland Security

In-sourcing Semiconductor Automotive

Applications

Realities of Competing in a Global Market

The $800 engineer A Russian engineer with 25 years

experience vs a U.S. engineer with 25 years experience and a 96K salary

If the work doesn’t involve national security or local customer interface – who gets the job?

Differentiating Yourself - Engineers

Skills are not enough, engineers need to have: Business knowledge

New business models Understand the customer’s needs Learn how to apply skills in new areas Create own opportunity – consulting-

start up.

New Ways of Thinking for Engineers

Technology: What are the key emerging technologies and how are they being used inside and outside your industry, company and region to create proprietary advantage?

Business Models: Are there new business models emerging that you can adopt or adapt to deliver radical improvements in the way you and others do business? Will these improvements drive profitable growth by creating proprietary advantages in the way you do business? Can you expand not just “your share of market” but also “your share of wallet” by adding new business models – for example – if you currently have a product business, can you add information, services or solutions? Can you expand into adjacent businesses by either taking over activities that use to be done by someone else in your industry, expanding into new markets, or adding new products?

Source: Lynda Applegate Jump Starting Innovation HBR 9/24/07

Differentiating Yourself - Employers

How do your differentiate your company from others?

What makes your company the one to work for?

Money? Technology? Flexibility? Making a difference? The “It” factor?

Legislative Reponse

Legislative solutions to limit or prohibit offshoring will not succeed, however there will be a need to develop incentives for retraining and hiring of engineers. The U.S. also has challenges when looking into having a population of engineers to work for the Federal government (and states also) along with developing the next generation of defense systems and maintaining today’s systems.

Legislative/Policy Changes

COMPETES – Focus is on STEM, R&D, but nothing for industry professionals

Tax incentives for companies, why not individuals – training, relocation

What Others Think

Succeeding in the Global Economy A New Policy Agenda for the American Worker – Authors: Aldonas/Lawrence/Slaughter – Sponsor The Financial Services Forum

Calls for a new policy agenda with innovations to facilitate adjustment by workers, communities and firms

Adjustment Policies - Individuals

Combine Unemployment insurance and current Trade Adjustment Assistance program into a single Integrated Adjustment Assistance program

Wage insurance Portability of health insurance Assistance with geographic relocation or

establishing a new business retraining

Adjustment Policies - Individuals

Congress should allow individuals to deduct from their gross income for tax purposes the full cost of education and training expenses even when directed at preparation for an entirely new career

What’s Happened Before?

1989 NSF Future Scarcities of Engineers and Scientists

Lead to similar effort, but by 1991 the Peace Dividend had kicked-in and engineering unemployment grew to new records – surpassed by DotCom implosion

New Economy of the 90’s – DotCom We’re still impacted by what happened during

this period

Conclusion

Who will win the great talent chase? Companies that are flexible and open to

change Companies that are willing to be as

innovative in employment as they are in technology

Provide opportunities and encourage employees to take control of their careers and contribute to the success of the business

Thank You !

Resources

Succeeding in the Global Economy available at: www.financialservicesforum.org

IEEE-USA Website – ieeeusa.org EETimes www.eetimes.com The Offshoring of Engineering – National

Academy of Engineering – www.national-academies.org

Michael T. Gibbons - Engineering by the Numbers – ASEE.org/colleges