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Wages slightly rise amid economic uncertainty

Posted: 01 Oct 2003 ?? ?Print Version ?Bookmark and Share

Keywords:salary? engineer? survey? compensation? employment?

Midway through 2002, much optimism revolved around the projected upturn in the electronics industry that was supposed to happen early or mid-2003. But as 2003 came, these projections dramatically blurred largely due to the worsening downturn in the global semiconductor industry, and partly by the Asia-originated SARS and the war in Iraq.

Midway through 2003, the projected recovery has once again been tempered as a handful of companies cut back their early projections from double-digit to single-digit growth. Beset by economic uncertainty, companies have become more conservative with their investments, causing more engineers to worry about issues like layoffs and salary cuts.

In its third annual "Salary & Opinion Survey," EE Times - Asia found that despite the economic uncertainty brought about by various factors, Asian companies in general rewarded engineers with higher salaries, but lowered total compensation by cutting-back on some benefits like medical insurance. EE Times - Asia also found out that while the salary gap between beginning and veteran engineers is widening, average annual salaries between those with Ph.D.s and those with either master's or bachelor's degree seem to be narrowing down.

The disparity

The 2003 survey indicates that higher education does not necessarily equate to higher pay. Average salaries of Asean respondents with Ph.D.s, as compared to those with either master's or bachelor's degree seem to be narrowing down. South Asian EEs with doctorate reported an average salary of $42,045, down 9 percent from last year's figures; while those with master's and bachelor's recorded an average of $37,813 and $33,210, respectively.

Higher education is an advantage but individual performance will ultimately determine the total compensation, says Anthony Quek, VP for human resources at Infineon Technologies Asia-Pacific in Singapore.

On the contrary, the salary gap between beginners and more experienced engineers are increasing. Engineers with less than one year experience recorded an average annual salary of $18,278, up 31 percent from last year's $13,917. Engineers with more than 15 years of experience, on the other hand, reported a salary of $49, 417.

According to Amy Choi, regional human resources manager of Microchip Technology in the Asia-Pacific, "Microchip prefers to hire experienced engineers because of the added value and maturity they bring to the job."

With conservative investment plans and decelerated expansion programs in South Asia, there is also a slight decrease in the number of Asian EEs undertaking freelance projects to augment income. From last year's 15.1 percent, the figure went down to 9.2 percent.

Slight increase

In general, salaries have improved. But the increases were partly a result of additional workload, staff movement and promotions. "Salaries are adjusted to commensurate with the individual's performance and contributions, and to reflect market trends," said Microchip's Choi.

Starting salaries, on the other hand, have remained relatively the same, said Ernest Chew, human resource manager at STMicroelectronics in Singapore.

STMicro, Chew said, "has implemented hiring freeze and stringent cost control," but still rewarded engineers with a slight increase in their salaries. "In the Asia-Pacific region, salaries of our engineers have seen an average increase of 3 percent."

"Retaining the best in engineering talent is absolutely critical," said Infineon's Quek. As such, Infineon provides "fair compensation package" to deserving candidates, amid the "company's prudent cost reduction measures."

Eazix Inc., a design house in the Philippines, said that their engineers received as much as 5 percent to 10 percent increase in their salaries--a figure similar to what the company gave last year. "We put premium on the human resource and we look at it as a long-term investment. We had to do it, otherwise, we'll lose our engineers," said Chicho Mantaring, director and head of the component development group. "Although we have had no layoffs, we have become more conservative with our capital investments."

Eazix, Infineon and STMicro are not the only firms that have become more cautious with their investments. To avoid cost-cutting measures like frozen salaries and layoffs, Indian firm MosChip Semiconductor, for example, has also slowed down on its expansion plans. "We are very careful about expansion plans so we won't need to go through any drastic cost-cutting measures," said MosChip VP Vinay Kumar.

In Hong Kong, companies are expanding and hiring more people. Hong Kong-based Microchip grew by adding six sales offices in the last three years, increasing manpower by 20 percent to 30 percent, says Microchip's Choi. Alongside, "it also granted salary increases to deserving employees," varying the percentage increase on a case-to-case basis. "Microchip believes that employees are its greatest strengths," Choi added.

Intel Hong Kong is also increasing its presence in the region by equally increasing its capital investments. "As our revenue and opportunities have continued to increase in Asia, we have also continued to invest in new facilities and functions," said Carmen Law, sourcing manager of the Greater Asia Region for Intel in Hong Kong. "And though our total compensation is linked to overall market performance, our salaries remained the same."


In addition to basic salary, other benefits are given as part of the overall remuneration package. Same as last year, our respondents in South Asia have again named medical/health insurance, performance-related bonus, stock option/grant of shares, dental insurance and life insurance as the top five company benefits.

In this year's survey, medical/health insurance is still at the top with 67.7 percent, down from 74.8 percent last year. Performance-related bonus is still at the No. 2 spot with 49 percent, up from 38.4 percent last year. Dental insurance is still No. 4 with 31.5 percent, down from 32.7 percent last year.

Stock option grant and life insurance switched places. Down from fifth spot last year (30.8 percent), stock option/grant is now No. 3 (35.6 percent), while life insurance is now No.5 with 24 percent, down from 35.8 percent last year.

Only 8 percent of EEs in South Asia said they do not get any benefits.

- Jerico S. Abila

Electronic Engineering Times - Asia

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