Could more engineering professionals be turning to consulting careers at an earlier age? This possible new trend is one of several intriguing discoveries in IEEE-USA’s Consultants Fee Survey Report ” 2014 Edition.
According to the new survey, conducted in the spring of 2014, the average consultant is 55 years old. This statistic compares with an average age of 60 in 2013. Further, only 5.4 percent this year reported their age as 70 or older, compared to 24.1 percent in the 2013 survey report. On average, this year’s respondents have spent 21 years in the engineering profession”down from 24 years in the last survey”and have 15 years of experience as consultants. Further, just over two in five (41 percent) have been consulting for 25 years or more.
The executive summary of the 2014 IEEE-USA Consultants Fee Survey Report notes that as with the IEEE membership in general, the vast majority are male ” 95.5 percent. Men also have slightly more years in consulting than women, with the female average being 14 years. Slightly fewer than nine in ten (88 percent) of all consultants in the survey identify themselves as non-Hispanic White, and another 5.4 percent as Asian or Pacific Islander.
For the third consecutive year, the median hourly rate remains at $135. Less than one respondent in five (18 percent) reported charging $200 or more an hour. Unlike recent years, however, the median hourly rate remained relatively stable with the number of years the respondent has been consulting. For those with less than 15 years of experience, the median rate is $130; it increases to $140 for those with 25 or more years of experience. Those with 35 or more years of experience charged an average of $135, down from $150 in the 2013 report.
Education levels also affect how much the consultant charges. Those with Ph.D.s enjoy the highest median hourly rate of $159, while a Master’s degree translates to an average rate of $145–also is higher than the $135 average.
Sector is another factor that influences a consultant’s rates; those who work in utilities charge an average of $150, while those in private industry, other than defense or utilities, charge $126. Also, consultants in a number of lines of business charge above the overall median; in communications and aerospace, the rate is $150, and in utilities, $146.
To better understand their areas of expertise, the survey asked consultants to indicate all the technical specialties in which they offer consulting services. More than one-quarter of all respondents mentioned two areas: systems engineering (35 percent) and project management (29 percent). Electrical power systems (28 percent and software development, application and management (26 percent) were also mentioned frequently.
Most consultants (67 percent) continue to work in a home office, although this statistic is down–from 76 percent last year. Some 46 percent carry professional liability insurance for errors and omissions. Thirty-four percent reported working entirely as an independent consultant in 2013, while 50 percent performed their consulting hours with partners, as a contract employee, or as an employee of a company not their own.
In terms of geography, the South Atlantic and New England regions have the highest median hourly fee, at $150. The Pacific region has the second highest average, at $140.
In early 2014, IEEE Strategic Research e-mailed the survey to 9,444 U.S. IEEE members who had indicated their primary job function as consulting, and invited them to participate. Some 927″almost 10 percent”participated, of whom 617 were self-employed, with at least half their consulting hours coming from working independently, with partners, or incorporated. IEEE Strategic Research also conducted the survey, and prepared the report, based on the responses of the 617.
IEEE-UA has conducted compensation surveys of U.S. members since 1972. Separate surveys of consultants’ compensation began in 2002, and except for 2003 they have been conducted annually since then.
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.