Salaries down, but optimism up - Asian EEs come up for air after massacre of 2001

Salaries down, but optimism up - Asian EEs come up for air after massacre of 2001

After the salary freezes and cuts, industrywide layoffs and massive restructuring of 2001, the 1,257 engineers who responded to EE Times Asia's 2002 survey were generally optimistic that the recovery has begun. Salaries took a slight hit this year, with the average EE salary across the region-China, South Asia, South Korea and Taiwan-dipping a percentage point from last year's $13,546, to $13,344. But pay rose in China and South Korea.

The recruitment outlook is good, especially in China, India and Singapore, even though some companies are cutting pay and benefits to contain costs. China and India offer the most job openings because of the many multinationals expanding there, but Asian EEs still prefer to work in the United States, where salaries and benefits are higher and working conditions better. Companies in China, India and Singapore are looking for EEs with knowledge of specific technologies such as wireless communications and system design, to fuel what they expect to be a growing market segment.

Optimism about the industry's fortunes may arise from the fact that 66 percent of respondents said they got raises this year. Only 24 percent said their salaries stayed the same and a small 10 percent said their salaries decreased. That was enough to bring down the average-salary total for the region overall by 1.5 percent. But the specifics are mixed. Salaries rose in mainland China and South Korea, dropped in South Asia and Taiwan. The average pay was $8,135 this year, still about one-tenth what the average U.S. EE earned in 2002. EEs in China got the largest pay hike at 15.7 percent, but from a very low base of $7,033. The highest-paid Asian EEs were in South Korea, where the salary averaged $21,493, up almost 5 percent from $20,516 last year. Meanwhile, in South Asia EE salaries dropped 8.4 percent, to $15,189, and in Taiwan they fell 18.3 percent, from $22,692 down to $18,540. The reasons behind those falling numbers are unclear.

Engineers may not see layoffs in Asian companies this year, but employers are taking other measures to lower costs, such as cuts in compensation, lower pay increases and tiered payments. National Instruments Singapore, for example, expects no layoffs but "will freeze the salary of our employees," said office manager Alice Wong. Mentor Graphics India froze salaries last year, and Tektronix employees in Singapore took vacations to curb expenses such as special vacation compensation. Elsewhere, "The current downturn has introduced the concept of variable salary," said Rohit Bidappa, marketing communication specialist at Cadence India. "In this system, a part of the salary is fixed and a part is variable-the amount that's variable depends upon the performance of the individual."

Cadence India has been using variable salaries for almost two years. The variable part differs from company to company, and every company wants to keep this information confidential. Roughly 20 percent to 30 percent of the salary is variable; the rest is fixed.

Hiring boom
In any event, despite the new variable salary trend-or because of it-companies in Asia are hiring.

"There seems to be more recruitment since the middle of this year," said Cadence's Bidappa. "Multinational companies such as Texas Instruments, National Semiconductor, STMicroelectronics, Intel and Cypress are all expanding [in Asia]."

Two key regions of expansion are China and South Korea. At Agere Systems in China, managing director Zhou Zhen-Hong said the company is "adding IC designers and applications engineers to our design center as well as our applications engineering team."

Companies in Asia are banking on wireless communication as a growth sector and are thus eager to hire engineers with knowledge of that technology.

And in South Korea, engineers capable of developing embedded software for electronic products or mobile phones are in high demand.

Skills and demand
Looking at skill levels among the 1,257 EEs who responded to the EE Times Asia survey, 38 percent of design engineers possess skills in board layout and simulation; and 34 percent are experts in embedded-systems design. But at the other end of the scale, only 8 percent of them list IP and design reuse management.

Some 28 percent of the engineers in test companies mostly have board test skills, while the same number claim system test skills and just 11 percent can handle networking test. For production engineers, board assembly tops the list, at 20 percent; the least common skill is wafer-level process, at 5 percent.

With many technology companies opening IC fab and production facilities in China because of the low wages, lack of employment benefits and freedom from environmental and job-safety concerns, companies seek EEs with specific skills. The same is true in India and Singapore where additional expansion is taking place.

And with more semiconductor companies shifting their investments from the United States to China, there will be a rise in demand for professionals with needed IC skills.

The growth of the industry in Asia continues to fuel the desire of EEs to work in other countries. Some 78 percent of respondents to the Asian survey expressed their interest in working overseas, while the rest preferred to stay home and hope for better things in the future. And even though the industry is gradually shifting much of its work force to Asia-Pacific, 51 percent of the respondents want to work in the United States.

South Asian engineers, ordinarily paid less than their counter-parts elsewhere in Asia, are most eager to leave home, with 83.6 percent wanting jobs abroad. Not too far behind are South Koreans, with 80.9 percent; Taiwanese, with 78.5 percent; and Chinese, with 74.4 percent.

"The reason Asian engineers want to work overseas is [the attendant exposure] to new technologies, techniques and tools. Aside from higher pay, greater job security and a professional working environment, the experience of working overseas adds a considerable value to their resumes," said Wong of National Instruments Singapore.

Runski Fernandes, head of the consulting and value-added series at ABC Consultants in India, agreed. Indian engineers who opt to work overseas, Fernandes said, do so largely because of the better work environment, access to contemporary technologies and the superiority of the compensation packages offered.

Foremost among engineers' Asian dream destinations are China and Singapore; 9.5 percent of respondents want to go to one of those countries. Other desired destinations are Australia (7.7 percent); Europe (6.1 percent), with Germany singled out (4.4 percent); and Japan (3.9 percent).

Jaclyn Ong, Jerico Abila, Mark David, Denice Obina are editors for EE Times Asia.