Growing numbers of mid- to late-career engineering professionals are continuing to move into consulting. According to the 2019 IEEE-USA Consultants Fee Survey, this year’s respondents have an average of 17 years of consulting experience. This trend was also observed in the 2018 report.
Although the mean (average) age and years of overall engineering experience both increased sharply this year, compared to the last few survey findings — the mean age is now 61 and 26 years of engineering experience. The years of consulting experience declined slightly. Nearly half (49.8%) had 14 years or fewer, with 17.6% having five or fewer years of experience. Some 22.5% have been consulting for 25 years, or more.
Elsewhere in the report, it’s noted that as with IEEE membership in general, the vast majority of consultants is male (92.6%), and identify as non-Hispanic White (77.6%). The largest minority group among consultants remains Asian or Pacific Islander, with 4.3%. In addition, men have almost a decade more overall professional experience than women, with female consultants reporting 17.3 years.
Conducted this past spring, the Survey drew a large percentage (25.1%) of respondents over the age of 70, down only slightly from 25.6% in last year’s report. Another 36.1% reported being ages 60-69; the 45-59 age range drew 27.6%.
Almost 86% (85.8%) are United States citizens by birth. Another 11.3% are naturalized citizens; while, (and consistent with last year) 2.0% are permanent resident aliens.
The median hourly rate consultants charged this year is $160, reflecting a $10 increase over last year’s report. The typical consultant, who has been in the profession for less than 15 years, reported this hourly rate. Those respondents with 25-34 years of experience reported $175 — the highest median hourly rate. However, the rate for those with 35 or more years declined to $154 an hour.
Education level remains a significant factor in how much consultants charge. This year, those with a Ph.D. have a $40 advantage, with a median hourly rate of $200. Consistent with last year’s report, there is virtually no difference between the hourly rates of consultants with a Bachelor’s or a Master’s degree.
Nearly two in ten (19%) of the consultants in the survey have a Ph.D. Just over four in ten (41%) consultants’ highest degrees are Master’s — the largest group being MSEE/MSCE (20%). About three in ten consultants’ highest degrees (30%) are Bachelor’s, with most holding a BSEE or BSCE.
Although professional registration is required to practice as an engineer in many countries, it is not essential for most EEs in the United States. In this year’s survey, 32.4% reported they are licensed Professional Engineers (PEs); and they enjoyed a $10 hourly advantage over those without.
When looking at which parts of the United States offer the highest compensation rates in terms of Census regions, consultants in the Middle Atlantic region (New York, Pennsylvania, New Jersey) enjoy the highest median at $195. West South Central (Oklahoma, Texas, Arkansas, Louisiana) trails slightly at $188. East North Central (Wisconsin, Michigan, Illinois, Indiana, Ohio) has the lowest at $171. The survey analyzes responses using United States Census Bureau regions, not IEEE Region designations.
To understand their areas of expertise, consultants were asked to select all the specialties, of 96 listed, in which they offer consulting services. The top five areas for consulting services are: Systems Engineering (33.9%); Electrical Power Systems (28.9%); Project Management (26.5%); Expert Witness (25%); and Electrical Power Generation, Transmissions and Distributions (24%).
The five technical specialties with the greatest increases since 2015 are: Instrumentation and Controls (+4.3%); Electronic Components (+3.8%); CAD (+3.6%); Expert Witness (+3.4%); and Troubleshooting (+3.3%). Those showing the greatest declines since 2015 are: Diagnostic Software (-3.2%); Databases and Data Management (-3.8%); Project Management (-5%); Networks – LAN/WAN,
Other (-5.2%); and Software Development, Application and Management (-7.7%).
As in other recent surveys, most consultants (79.5%) had a home office for their work setting. A noticeable change from last year is that only about four in 10 (40.6%) carried professional liability insurance, in case of errors or omissions. In 2018, almost half (49.9%) reported having it.
Respondents who worked solely as an independent consultant in 2018 remained high. After peaking at 48.6% in 2018 (up from 31% in 2017), sole independent consultants dipped slightly this year to 44.3%. Similarly, almost four in ten (39.1%) worked with partners, as contract employees, as employees of another company, or were incorporated.
The majority of the average consultant’s business (55.6%) came from repeat clients; outside connections; however, remain important, as earnings also came from client and friend referrals (13%), and client contacts made by networking (10.2%). Several new categories introduced this year — but scarcely used by respondents — included social media networking (1.1%) and Internet/Google ads (0.9%).
Most consultants (59.1%) work with private, non-defense companies; when defense and utilities-related firms are included, the private industry share rises to more than eight in 10 respondents.
On average, the typical consultant billed 25 hours a week; and consistent with last year, continued the decline from 2017, when an average of 29 hours a week was reported. Hourly rates remain the most common billing method; more than seven in 10 (72.4%) use it. Fixed price is the next most common, with 20.3% (up from 15.8% in 2018) reporting that.
Consistent with past surveys, an average 12.5% are having trouble collecting their fees.
IEEE-USA has conducted surveys about the compensation and fringe benefits of its members since 1972. A separate consultants’ survey began in 1998. This past spring, 13,288 members identified as consultants in the IEEE membership database were invited by email to complete the 2019 IEEE-USA Consultants Fee Survey. Of this number, 1,133 participated. All findings in this report represent only those identified as self-employed consultants — the 751 individuals who reported that at least half of their consulting hours came from fee-based consulting. IEEE Strategic Research conducted the survey and prepared the report.
Helen Horwitz is an award-winning freelance writer who lives in Albuquerque, N.M. She was with IEEE from 1991 through 2011, the first nine as staff director, IEEE Corporate Communications.