Tweet this – Outsourcing is here to stay

Oct. 30, 2013
A survey uncovers engineers’ attitudes about the profession as well as issues that are becoming more widespread, outsourcing and social media.

As part of this year’s Machine Design annual survey, we asked engineers about some hot topics — outsourcing and social media — as well as how they feel about their jobs and the profession.


It’s taken 15 years, but outsourcing is finally catching up with engineers. At first, outsourcing mainly involved companies sending manual labor to low-wage countries such as Mexico and China. But as globalization has taken hold, companies are now willing to let engineers from outside the firm, even outside the country, handle design and product-development work. In fact, just over half (51%) of those who answered our survey said their companies outsourced engineering work.

The Engineers’ take on H-1B Visas

H-1B visas were created to let companies bypass immigration laws if that can’t find employees with the right technical skill. It lets them recruit and “import” engineers who can then come to the U. S. and work. Most of the engineers surveyed (51%) say their companies do not hire H-1B workers and a third (33%) don’t know if their companies hire them. But 16% of the respondents indicate their companies do use H-1B workers.

Engineers seem to believe this trend will subside, with only 7% of the engineers saying they expect their companies to hire H-1B workers next year. Still, more than a third of those surveyed say hiring H-1B workers threatens employment opportunities for U. S. engineers.

“The H-1B visas increase the number of engineers available for hire which puts a downward pressure on our salaries,” points out one engineer.

“H-1B workers seem to be viewed as less costly alternatives to U. S. engineers, resulting in homegrown engineers not getting that work,” says another. He also notes a potential downside for the country. “I suspect there is also a good chance H-1B engineers will return to their home countries, taking the work and jobs with them. And they would definitely take the knowledge and experience they gained when they left the U. S.”

A significant percentage of engineers believe the H-1B visa is a management tool to lower wages. “We already send the menial work overseas,” says one. “Now the corporate types want to bring in overseas workers to put downward pressure on salaries. The rationale that skilled workers cannot be found is just a ruse.”

But many respondents voiced opinions similar to this one: “There is plenty of engineering work to go around. Plus, there are lots of smart foreign engineers. They keep Americans ‘on our toes’ in regards to performance.”

When it comes down to individual engineers, the vast majority (91%) are confident, perhaps arrogant or naive, and say they are not threatened by H-1B workers. Why aren’t they worried?

“Because I am insanely confident in my abilities,” says one.

“I have unique capabilities that would be hard for a foreign engineer to duplicate,” says another, echoing a common sentiment

A few hedge their bets, like the engineer who pointed out that “My company, a defense contractor, typically won’t hire H-1B visa engineers. But if I end up looking for another job, then I’ll have to compete against H-1B engineers.”

And some engineers are within five or six years of retirement or believe their companies value their experience too much to replace them.

But unlike the unskilled labor that was shipped overseas, engineering work is mostly going to other U. S. divisions or companies. Almost two-thirds of the engineers surveyed (63%) say their companies outsource engineering work to other locations in the U. S. When it comes to shipping engineering jobs to other countries, India leads the pack with 25% of respondents indicating jobs go there. Other popular destinations for this work include China (20%), Europe (17%), Canada (8%), and Pacific Rim countries (8%).

It’s not just design being sent out the door, though according to the survey, design does makes up 35% of the engineering tasks being outsourced. Other engineering work sent outside includes software development (22%), final test (5%), and even R&D (6%).

The reasons cited for the move to outsourcing make sense. Almost half the engineers (46%) say engineering tasks are going outside so the company can make better use of its engineering resources. Close to a third (30%) say the reason is to save money. And 12% indicate their company’s goal for outsourcing is to save time.

Despite valid reasons for outsourcing, over 93% of the engineers taking the survey say their company does not plan on outsourcing engineering work in the future. And 80% of the respondents say they are not too concerned or not concerned at all about outsourcing. Only 4% of the engineers say they are very concerned.

When asked their opinion of outsourcing engineering work, engineers’ answers ran the gamut. Many pointed out that companies must do it to remain competitive and that outsourcing gives management more flexibility in hiring and firing and where work takes place. Other designers admit that it “can be effective for tasks that are fairly discreet and not too technically challenging, but is ineffective for high-end mission-critical tasks.” There are also respondents who worry that the push to outsource is being driven by short-term profits at the expense of long-term investments and survival.

But engineers also feel that while outsourcing might make sense for their employers, it doesn’t bode well for engineers. “Generally, outsourcing hurts U. S. engineers. Even outsourcing seemingly menial designs tasks can take away assignments from entry-level engineers who need to learn the business from the bottom up,” says one survey taker.

Another points out that “it can lower morale, especially when engineering jobs are sent out of the country. And soon, the company will lose its competitive advantage because now some other firm can make the same or similar product.”

Then there are engineers who believe outsourcing is just a bad idea all around. “Outsourcing is a short-term scheme to save money devised by nonengineering managers who do not have to interact daily with those off-site engineers. In the long term, outsourcing actually wastes money for the company because of communication disconnects, differing standards between the countries, continual design reworks, and no face-to-face interaction between the local and off-site personnel,” points out one respondent.

Another notes that “outsourcing makes it inherently more difficult to get projects completed due to two sets of management, procedures, regulations, and requirements. And make no mistake, the goals of the outsourcing company and host company are very different. The host company wants to reduce costs and maximize production; the outsourcing firm want to maximize billable hours.”

One respondent seems to sum it up: “Outsourcing is here to stay. Companies save money by doing it, and although nobody likes it, most engineers realize there is little they can do about it.’

Social Media

Engineers are no strangers to working with the Web. This is clear from the survey. A vast majority of respondents (85%) say they download materials from the Web, and the majority (73%) also read articles on the Web. Most engineers who took the survey also watch the Web with 65% watching videos and 60% taking in Webcasts.

But less than a third (32%) say they partake of social media on the Web. The majority of respondents (69%) indicate their use of social media has remained the same over the last year. About a quarter of the engineers (26%) say the are using social media more this year. And a few engineers (5%) say they’ve cut back on social media over the past year.

The most popular form of social media for engineers to conduct business on is LinkedIn, with just over half (51%) saying the are members. Youtube is also popular, with 18% of survey takers logging in to watch videos and lectures. Other social media score much lower. Engineers don’t even make widespread uses of their own company’s Web site; only 12% say they tune in to it. And a third (34%) of the engineers taking the survey say they never use social media for business.

Many engineering respondents (47%) have used mobile-computing devices more frequently over the past year. But half say their use has remained the same and 3% used it less.

The most popular mobile devices by far are modern phones, with 50% of those surveyed using either an Android-based phone or an iPhone. But 37% of the engineers don’t use any mobile device.

The profession

Engineers have plenty to worry about in their day-to-day jobs. Their top three concerns are how to stay current with new technologies (33%), looming project deadlines (32%), and product reliability (30%). These are all perennial worries and probably haven’t changed much over time. Ditto for their other top seven worries. But some issues have only emerged over the past 20 years or so. About a fifth (17%) worry about their employers financial health. The same number dreads having to deal with smaller staffs due to layoffs. Outsourcing and age discrimination are other newer problems and each is cited by 15% as important. A happy-go-lucky fifth of the respondents say there are no problems at work that they are concerned about.

Even so, engineers overwhelmingly (67%) say they have never considered leaving the profession for greener pastures. And a similar slice of the engineering population (62%) believes a career path in engineering today holds the same potential for salary advancement as it did five years ago. They cite the growing importance of technology and the lack of good engineers on the market as factors contributing to a rosy future for dedicated engineers.

For those who have thought of changing careers, the most common motivation is to make more money, mentioned by 21%. The other top three reasons are to cut back on long hours (14%), for a better chance at advancement (13%), and because of the poor job outlook for engineers (12%).

While there are some disgruntled engineers who have thought of leaving, the overwhelming majority (90%) give the profession a ringing endorsement, saying they would recommend engineering as a career to a young person. They base this decision on the intriguing and satisfying work they’ve encountered in engineering, the way-above-average pay, and the interesting people they work with.

Sponsored Recommendations

Pumps Push the Boundaries of Low Temperature Technology

June 14, 2024
As an integral part of cryotechnology, KNF pumps facilitate scientific advances in cryostats, allowing them to push temperature boundaries and approach absolute zero.

The entire spectrum of drive technology

June 5, 2024
Read exciting stories about all aspects of maxon drive technology in our magazine.


May 15, 2024
Production equipment is expensive and needs to be protected against input abnormalities such as voltage, current, frequency, and phase to stay online and in operation for the ...

Solenoid Valve Mechanics: Understanding Force Balance Equations

May 13, 2024
When evaluating a solenoid valve for a particular application, it is important to ensure that the valve can both remain in state and transition between its de-energized and fully...

Voice your opinion!

To join the conversation, and become an exclusive member of Machine Design, create an account today!