Suppliers race to hire engineers

Elektrobit's Papadopol: “It's a bidding war.”
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As North American vehicle production rises, suppliers are scrambling to find many types of engineers: mechanical, software, electrical, manufacturing -- you name it.

Last month, a survey of 100 North American suppliers revealed that 90 percent planned to expand their engineering staffs. Of those, 75 percent said they were having trouble finding candidates, according to the survey by the Original Equipment Suppliers Association.

Suppliers "have got so many vehicle programs to launch that it's crazy," says Neil De Koker, president emeritus of OESA. "There's a tremendous amount of overtime."

Software engineers are in especially high demand as automakers add infotainment, collision avoidance systems and other high-tech gadgetry.

The additional content is straining the engineering resources of suppliers at a time when automakers are expanding their lineups.

In 2014, automakers will launch 33 new vehicles in North America, up from 18 this year, according to IHS Automotive of suburban Detroit. The glut of new products has triggered an acute shortage of experienced engineers, as automakers prepare for the launches.

As a result, suppliers often have to settle for engineers with less experience and train them. According to the survey, 45 percent of respondents said they needed to boost their training budgets by more than 10 percent.

Suppliers' "hope is that these engineers will stay with them," De Koker says. "The minute you train them, they're worth more."

Not surprisingly, compensation is rising. Thirty-two percent of respondents said they expect to increase bonuses next year.

De Koker says a supplier executive recently told him that a candidate for an engineering job had verbally committed to join his company -- only to renege when an automaker offered $20,000 more.

The OESA survey did not ask suppliers to divulge their pay scales. But data from Michigan State University's College of Engineering show that starting salaries are rising.

This year, the average starting salary for MSU engineering graduates is $62,900, up from $56,200 in 2008. Starting salaries for computer scientists average $71,900, up from $60,600 five years ago.

Those salaries are likely to rise more, says Garth Motschenbacher, director of employer relations at MSU's College of Engineering.

"We are not producing enough engineers," he says. "Over the next 18 months, you're going to see some huge jumps in salaries."

While engineers of all types are in short supply, competition for software engineers is especially fierce.

"It's a bidding war," says Manuela Papadopol, global marketing director for Elektrobit, a software developer in Nuremberg, Germany.

Elektrobit, which helps develop software for Ford Sync, maintains technical centers in suburban Detroit and Seattle. The company has about 100 U.S. employees, mostly engineers, and it wants to expand its work force 20 percent next year.

It won't be easy. "We have to fight Microsoft and Amazon and Google for talent," Papadopol says. "It's the reality."

You can reach David Sedgwick at dsedgwick@crain.com.


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