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27-05-2008, 10:34 PM
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1785
I am an ex-engineer working in a bank as some calls it front office treasury role.
As for the question on why engineers are lowly paid compared to bankers, it all boils down how much money can you bring to the firm.
E.g. I used to work as R&D engineer, and I work together wih 10+ R&D engineers to innovate 1 product, and a assembly line with another set of product engineers, technicans and factory workers to produce the finished product. Besides of the huge human resources requirements, there are large capital expenditures e.g. machines, factories. The margin is low with high overheads (engineer pay is one major overhead).
In a bank on financial markets, there is product developement team called the quants, abt 3-4 people with phd in maths, who comes up with new structured products and risk management solutions, a desk of 3 traders who manage the risks, a few sales to push the product. There is a middle/back office settling the trades, etc. For a relative small operations, the pnl can be enormous at roughly 5% of volume, thus can be around USD25mio/yr. Divide the bounty between 5-10 FO staff, and you can see how much bonus they get.
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28-05-2008, 11:38 AM
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1788
begtodiffer
That's the best answer! I think generally there are 2 sectors in any industry. (1)The people who help to create a product, and (2)the people who help to sell a product. Engineers fall into category (1). The more you pay them, the less profit the company make. Sales is in category (2). The more you pay them, means they are bringing more profit. Assume the sales earn 20% of total sales, so if they make $200k a year, means the company make $800k a year! A top sales always win a top engineer/lawyer/doctor/pilot handsdown. Sim Wong Hoo is the best example, he can easily become a engineer in a big MNC, but he chose to sell soundcards!
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28-05-2008, 11:29 PM
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1792
In response to your comments about PE being paid peanuts and made to shoulder heavy responsibilities, I beg to differ. Your example is skewed towards a one off Nicol Highway incident. But you cannot generalize this incident and deduce that all PEs will be made scapegoats if something happens. Engineering is more than one or two person's efforts and decision. In an established multinational company, nobody makes a decision based on his whims and fancy. There are many systems, policies and various subject matter experts to comply and consult before a decision is arrived. And if some mishaps were to happen, investigation will be carried out. If the mishaps occurred as a result of flaws in systems and not due to negligence or wanton attitude of the employees, the employees will not be taken to task. In other words, it is easier to be an engineer than what most people will think. Coz we do not operate alone. Neither do we sit behind the desk all day long to do lengthy pages of calculations. And regarding the comment that PE are paid peanuts, I am surprised that 10K - 20K/mth is peanuts and butter to you. Based on the singapore labour force wage statistic for all age group, if you earn 10k - 20k/mth, you are already the top 5% earner. While it is little when compared to people like Mr Sim Wong Foo who earns millions of dollars a year, I still think that it is a respectable pay compared to majority of the Singaporean. Maybe you will like to share with us how much you are earning or expect to earn in order to qualify the peanuts comments.
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30-05-2008, 09:19 AM
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1809
hi nicholas
agree with your supply & demand theory. oil industry is relatively comfortable now, but when it cannot find the bodies it wants, "foreign talents" will come in. this is like what is seen in other industries eg IT, engineering, banking. not so sure where u will be then.
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30-05-2008, 05:03 PM
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1812
I have been in Software Engineering for 10+ years and I can tell you that it is a lot of hard work , late nights and below average pay when compared to the people in the financial section. But we had our good days (remember the dotcom bubble), when everybody wants to be in Software (even actresses) and salary was rocketing.
Last few years, globalization has made Software Engineering not so attractive because you have to compete with Engineers from cheaper Asian countries and thus limit your salary. If Singapore engineer pay go up, it has to be justified with higher productivity (which may mean longer working hours) and better innovation (which is easier said than done).
The statements about demand supply is correct, as it more or less sums up the situation I described above. The only silver lining I see is that Singapore has highly motivated and skilled engineers compared to the cheaper Asian countries and many MNCs are aware of that, so they still depend a lot on us to provide their IT solutions.
One question, will the finance and banking industry one day face globalization like IT ? I remember reading that it was already happening with Accounting jobs going to India , but anybody can comment on this?
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31-05-2008, 04:05 PM
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1818
hi i am gonna be an intern at an oilngas mnc. i think the main reason y banks can pay so much is there r little costs to cover.... as compared to (for oil gas) huge refineries, chemical plants...
their construction, maintenance n operating costs amount to a lot...most engineers r employed in capital-intensive industries... so even sky-high oil prices translate to high profits... they will invest billions into new plants or better technology rather than give out as big fat bonuses or salaries compared to banks.
wat to invest in for banks? higher salaries to attract top talent !
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