In my career I worked with a lot of engineers and also with a lot of hourly blue-collar technical workers. The engineers I knew made from $60,000 to $1.5 Million, with most clustered way closer to the lower end of that range. Only my boss’s boss made the $1.5 Million, and another small handful of the higher paid engineers like me eventually made it up into the multiple six figure range, though most topped out in the $100-150k range by the end of their careers. The hourly workers started for around $40,000 but within a few years could be making over $100k if they worked significant amounts of overtime. However, that was as high as they could go in that job, there are only so many hours in the day you can work if you are getting paid by the hour.
So, at any given time a lot of my younger engineers and some of the older ones actually made less than some of the hourly guys they helped to run the plant efficiently. And that was appropriate, the higher paid hourly guys had a wealth of knowledge they had gained both by experience and intensive on the job training and they earned their pay. I sometimes pondered who had the better deal, the non-degreed hourly worker, who could usually totally forget about the plant during his off hours or me, an engineer, who sometimes carried the worries and problems of the plant home with me. We’d see that dynamic play out in the hourly workers as well. We promoted from within whenever we could so it was possible for an hourly worker to move into a salaried management position, even up into a corporate officer’s position without a college degree of any kind. In fact, I watched two of my hourly friends do just that and they earned far more than $100k in their VP jobs. But to get there they had to work their way through several lower and middle management jobs that paid only slightly better, if any, than their old hourly ones and I think they suffered more stress in the management roles where there was no union protection against being fired.
It wasn’t unusual for hourly employees to turn down “promotions” to managerial jobs because there was little or no extra pay and zero overtime pay. In spite of no overtime pay there was plenty of mandatory overtime work required when there were problems. And when you work in a chemical plant that runs 24x7x365 hours per year, including every holiday, there are always problems resulting in people being called in to do extra work. Hourly workers could at least soften the pain of being called to work on their days off by the fact that they received 50% higher than normal pay but salaried workers got no extra pay for extra work on their days off. In theory there was some compensation built into the salaried workers’ pay to account for overtime but in practice almost nobody thought it was sufficient compared to the number of extra hours worked.
With the uncertainty and probable higher stress, why would any hourly worker take a salaried job? I think there are two main reasons. One, a natural desire to achieve as much as you can. Leading a team brings a different kind of growth and experience versus being one of the ones being led. And secondly, moving into a salaried management position can be a first step in a longer path of promotions and increased compensation. My two friends who ultimately became corporate officers were eventually compensated with stock bonuses and large annual bonuses that brought their total compensation to a level much higher than their previous hourly jobs. It is a common debate at most plants in the chemical and refining world as to whether staying as a highly paid hourly worker isn’t preferable to moving into a salaried position with more potential future growth. It is a tough decision to make because usually there is no second chance to choose again. Just last year I met an hourly union worker at a plant in Texas that made $185,000 that year and had not made less than $140,000 in each of the previous two years. That’s a lot of money! But I also have met people who promoted from hourly jobs to salaried ones and ended up multimillionaires due to their rising to the top of their companies.
I knew two guys who wrestled with this very decision, decided differently, and had very different outcomes. Donnie was a process operator. His job was to control a complex set of equipment through a computer control system to make the most amount of product possible, safely and with the least input of energy and raw materials. He had only completed a high school degree but he was very intelligent, had studied with diligence on the job and was a talented operator. He worked overtime when it was available and made right at one hundred thousand dollars a year, in today’s dollars. Bob, Big Bob we called him, because he was six foot five inches tall and well over 300 lbs, was likewise a high school graduate and a very intelligent operator. Donnie and Bob had one other thing in common that was unique to the two of them. Both of them had finished over three years of college in engineering but for their own reasons had dropped out prior to graduation. And both had wondered for years if it made sense to go back to school and finish up their degrees.
As it turned out one of them, Donnie, decided to do that. He returned to college and a year later he obtained his chemical engineering degree and went to work for another chemical company. But Bob considered the cost, and although he was only one semester away from completing his electrical engineering degree, he decided to stay in his hourly position. Both paths were open to both men and one took chose to return to college and the other stayed in his hourly job. So, how do you think their careers worked out?
These are real people, people I worked with for many years and I can vouch for this story. The results were somewhat surprising to me. Donnie, when he earned his chemical engineering degree, applied for work at our company. At that time, we did not have an opening and, frankly, his technical skills did not impress us when we interviewed him. There were a lot of jobs available and he easily found a position somewhere else. We kept in touch for years and I followed his career until we saw the sad news that he had died unexpectedly. I never tried to ascertain his actual compensation but I hired enough engineers to know what the kinds of positions he held paid, and I’d say he ended up making in the low one hundred thousand range. Good money but not much higher than he would have made staying in the hourly operator position and probably less than had he promoted up into management.
Big Bob kept his hourly job and in time he did promote to a first line salaried supervisor position. And he was a very good manager. Over time he was given more responsibility, more promotions, and he and I basically rose up in the ranks together. When they eventually split our company into a manufacturing division and a transportation one. I ran the plant and he ran everything else. His pay was in the multiple six figure range even though he never finished his college degree.
So why did his career go so much further than Donnie’s? The short answer is that Bob was a better leader and manager and offered more value. Donnie had the technical degree but his soft skills were not as good as Bob’s. That isn’t a severe criticism of Donnie, Bob was truly exceptional. Also, Donnie started over at the midpoint of his career and that left him less time to move up. In addition, I would guess that engineering students that leave college during their final year do so because they have realized they are not a great fit with engineering. Either the technical demands of their courses exceed their ability or it just does not interest them. In either case it does not bode well for a top tier engineering career.
If you stay as a technical person and are judged to have median technical skills, which is where Donnie was, your engineering pay will cap just like an hourly operator’s pay. Your market value will just stop growing and so will your paycheck. But, if you keep rising in responsibility like Bob, which in most cases means management, the sky is the limit. Bob and I had hundreds of people we were responsible for so our pay was a small thing to our CEO. If we could get better performance out of our teams then the CEO was happy to pay us for that. In a way moving up the management ladder is a way of decoupling your pay from the number of hours you work because you are leveraging the efforts of your entire team. If you can get the team to perform 1% better and your team is hundreds of employees then that’s a lot of return to your shareholders and is likely to come back to you as far more than a 1% raise. I know it did for both Bob and me.
What’s the point of this true parable from my past? There are several, I think. First, make career decisions carefully. Both Donnie and Bob were proficient at what they were doing as hourly operators but maybe not cut out to excel at engineering. Going into any job that you’ll never be better than average at is a bad choice in my opinion. If engineering doesn’t light you up and get you excited, then don’t try to be an engineer. I have to think that if engineering had excited them, they would not have dropped out of college prior to graduating, in the first place. However, working in the plant did light up Bob, and he was a joy to work with for all those around him. And that made him a great leader, which propelled him to a great career. A career that far outshined what he could have accomplished as an “average” electrical engineer.
With Donnie the situation might be more complex. I do not think his plant job satisfied him but he also would not have been a great management candidate, because he did not demonstrate Bob’s leadership ability. Maybe he really did enjoy his engineering career, even if it went along an average-ish path. Or perhaps there was a third choice he should have gone toward. It is impossible to know since his path was cut tragically short.
I’m not trying to impart great wisdom here, only to say that in Bob’s case the lack of a college degree cost him nothing, in my opinion. He had a great career both in terms of compensation and job satisfaction. In Donnie’s case I think going back and completing his degree was an accomplishment he was proud of but I’m not sure he enjoyed his career any more than he did being an hourly operator. The lesson I’m sure of though, is that both of them made a conscious decision about finishing up their education. And maybe the lesson is simply, do not just drift. If there is a decision you know you should make, then think it through and make it. Even if the decision ends up being to just stay where you are and grow where you are already planted.
What about you, have you had friends who left their secure jobs to do something difficult or risky?
Or do you know people, maybe you, who contemplated making a drastic detour to finish college or start up a new venture but decided it wasn’t what you wanted to do.
Did it work out awesomely like Bob’s choice not to finish college?
Or did it work out more, meh, like Donnie’s where there is satisfaction with finishing but maybe still failing to find that dream job they were looking for?
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I have a friend who left behind a lucrative job to become an actor. Time will tell if he’ll become enormously successful but for now he does seem to enjoy living his life dream. I’m not sure how common a story like Bob’s is. There are for sure people who built a successful career without a college degree, but most decent paying jobs these days require a college degree or higher. Getting a degree doesn’t guarantee a high-paying job but it certainly helps with building connections, knowledge and credentials to get there.
I think most people would agree with you. Certainly the tech degree I obtained made me a lot of money and also offered me a variety of choices about where I might live and what type of career I wanted. Being a performer is a long shot because there are relatively few positions with decent pay and a great many people with more than enough talent to compete with. The best way to increase your chances of success is to minimize the number of people you have to compete with versus the number of available jobs. I chose chemical engineering because there are more jobs than there are people to fill them.
LSW, it is highly, highly, unlikely your friend will have success financially as an actor. To make even 100K per year would be a dream for most actors. For bit players (small speaking roles for no-names), it would take booking 10-20 TV shows and/or movies PER YEAR to earn 100K. There are probably less than 100 actors that book THAT MANY small parts per year. Making money in acting/music/arts is probably the hardest career choice one could make (I’ve produced a few independent movies, know a number of actors, and I’ve analyzed the financial side of this business for the past 20 years).
I think that the same can be said about musicians, vocal performers and artists in most cases. It is sad that it is true but it is nice to have an expert confirm it, Hobo.
My brothers friend never went to college. He called a fortune 500 mortgage company and begged for a broker job. He kept calling and calling until they finally agreed to give him a chance. He turned out to be their best broker in sales and now owns his own business. Needless to say things worked out well for him. Sometimes, persistence is key to your own success.
Persistence and talent both, no doubt he had those. I think it is unfortunate that so many people are overlooked because they do not have a degree even though many jobs are learned by doing,and do not rely on college training. Mine did use almost every engineering class I took and it would be very difficult for a non-engineer to handle. But once I got into upper management my engineering training was less important, there were lots of people doing the same job I did without any technical training except on the job experience. I admire people who overcome resistance, I never had to, they are way better than me.
as you might remember, steve, i finished school around age 30. i’ve been on both sides of the fence of management/hourly since then and my last management job they beat the hell out of me for not nearly enough pay. i’ve been in a tech job in a bargaining unit the past 15 years and i’m not getting rich but the low pressure is perfect for me now. we had a couple of other non-degree folks get promotions i went for also and they were eventually fired for lack of performance. i don’t think the lack of degree was the reason but they weren’t really cut out for the big jumps they made. my life at work is so easy now i can practically do it with both hands tied behind my back, so i guess that’s good. but i have to find intellectual problem solving challenges outside of work and that’s ok too.
I do remember, and I was thinking about you when I wrote this Freddy. My examples glossed over the third path, which is to stay in the hourly job and pass on the arbitrary nature of salaried management. I think it is valid and maybe the best choice statistically. I was very lucky to be in the right place at the right time but it is telling that my two engineering kids both avoided the corporate management ladder like it was covered in snakes. They saw how many times I was called in to work on holidays and nights and overheard my conversations with their mom about the ridiculous demands I faced so often. My personality is pretty upbeat and Teflon coated, so I enjoyed the job until the very end when it got to me finally, but it chews a lot of people up and spits them out, no fault of their own. People are not made to be beat down constantly. It takes a toll and eventually took one on me.
Interesting stories. I work in the specialty chemical space, so it feels especially relevant to me. In my case, I’m in R&D which is all salaried, but manufacturing and engineering has a mix of hourly and salaried employees. I know both Donnie’s and Bob’s, and I think the key is that the choice they make fits who they are. If someone is meant to be a leader, that is probably the right path to pursue, especially if the technical skills might be lacking!
Similar to Freddy’s stance, I’m trying to maximize pay and satisfaction while simultaneously maintaining a low-stress environment. It’s been a challenge lately, but in general I will take a little less pay for a great work/life balance and relatively little stress.
Adam, I think most anything Freddy chooses is by definition pretty wise. I was so competitive I wanted to be the boss even though the reality of the job was that it was less enjoyable than some of the jobs I had on the way there. The biggest problem with leading people, is the people. Usually technical work is straight forward and follows the laws of science. People just do the craziest things, us included! In my post career phase I’m making a more conscious effort to only accept work that I enjoy, so maybe I’ve learned something finally?
Hi Steve – I see it in my own workplace that soft skills will move you up quicker in the organization than strong technical knowledge. The people with the soft skills manage the people with the technical knowledge.
Based on my observation, one of the key soft skills that can result in quick advancement within your organization is the ability to develop strong relationships with senior management and to be able to manage those relationships well. Think about the key two or three true decision makers in the organization, build a good relationship with them and the CEO, and then watch your career blossom.
That is great advice, I was never a suck up to the higher ups but I admired their achievements and spent as much time around them as I could and it did pay off for me. Even with the top people at a rival company and when that company bought ours, which was never even a possibility in my mind, the top decision makers were old friends of mine and the fact I had shared a drink or a dinner or two with them in the past really paid off for me because they promoted me to run our company based on the long term friendship we had developed.
Your “parable” is an excellent example that demonstrates the power of EQ versus IQ. EQ demonstrated in Bob’s story offers so much more value for all stakeholders. If readers look back at their own jobs or careers, they’ll now be able to pick out those with a stronger EQ vs IQ ratio. While the IQ’s are very important in technical or scientific positions, they usually peak out in leadership/management positions with a somewhat narrower loyalty factor.
So how does one nurture their own EQ? There are plenty of books on the topic. Daniel Goleman is a good place to start.
That’s very savvy advice. I was a fortunate nerd in that my dad was a gregarious salesman. He lacked any technical skills and wasn’t brilliant at all but he absolutely loved everyone he met and was hopelessly optimistic. He had me read “How to win friends and influence people” in middle school and I fell in love with the concepts of how to sell. I inherited my genius mom’s IQ and my super friendly dad’s positive world view and had a big advantage over most of my engineering competition who tended to be quite introverted and less positive. I was very good at the technical but also volunteered to do all the public speaking for the company, which nobody wanted to do, and ended up advancing because I gained a reputation of having a solid EQ to go along with a strong IQ and that’s almost a rarity in engineering circles. I agree Francis, that EQ wins but if you can manage a strong showing in both intellect and emotional talent then the sky is the limit.
Steve,
I agree with your premise that leadership is valued in an organization where long term employment opportunities are available. Case in point, the military or large industrial plants such as Eastman Chemical plant in Johnson, TN. When I was a GE field engineer, I did a couple of projects at the EC plant and a couple of the managers wanted to hire me.
Instead, I went to B-school and then commence working in the M&A world. From my experiences, Walls Street and the M&A world in the energy sector always talked so much about the importance of leadership but the adherence of senior management to the same was ephemeral. Unlike the military and industrial world, the tenure in these industries is rather short for most personnel.
Look forward to your next post.
Semper Fi
I have two dear friends, both chemical engineers, that work at that Eastman complex. That was one of the few places that would not interview me in college, my GPA wasn’t high enough! I think the energy sector has some good people but the larger Fortune 500 energy companies have migrated to a “use people as tools and then toss them away when a better tool comes along to replace them” model. And that loss of loyalty to employees has created a loss of loyalty toward employers and the whole thing has lost the feel of a family and become more like a pro sports team. The players and the owners are loyal to the team, not to the players. You lose a step and you are off the team and it is kind of like you never existed. It does have some efficiencies but it isn’t nearly as much fun! Always love hearing from you Luis.
Completely concur.
Hi Steve, I discovered your blog a year ago and I have been reading all your articles. This is an excellent one. I liked the way you explained about two people of similar background but ended up so differently. I am a chemical engineer, but chose to work in IT field since graduation, just like 90% of my classmates did. The rest 10% chose to work in chemical industry and I lost contacts. It would be interesting to compare to the journey of the 90% versus the 10%.
Sandy, that would be interesting. I’ve noticed over the years how the “place to go” has changed drastically. When I got out of college I had eight firm offers with one aluminum company, three petrochemical companies and four oil refining companies. The vast majority of my classmates went into oil or oil related industries and those were the highest paying jobs. But over time the oil industry has become less attractive to graduate engineers and has been seen as part of the climate change issue, linked with pollution in everybodies’ minds and just generally less popular. Nobody even considered IT when I got out. If I had to guess biomedical and pharma industries may become the next “place to go” as genome decoding, biochemistry and nanotech lead to some massive breakthroughs in reducing the frequency and severity of today’s diseases.
In medicine we do not face too many situations like the parable you gave. Our biggest choice out of medical school is what residency specialty to pick (sometimes out of our hands depending on how competitive it is) and after that if you want to leave residency right away as a general attending in that specialty or do you want to stay 1-3 more years to get a fellowship (which does not automatically mean you get a bigger salary later).
It is not an insignificant decision as you could leave residency and start making over $200k/yr or only get paid $50-60k for each yr of fellowship.
Indeed, for your and to a lesser extent my areas of training this is a hypothetical. My son is in residency right now, I suppose in four years he’ll have to decide on whether a fellowship makes sense. I’m not sure what the pro’s and con’s are in his specialty but he loves education, he was a chemical engineer like me, and worked for six years before deciding to be a doctor so he is already older than most residents.
One of the lessons I try to teach my 3 kids is the value of soft skills and self-awareness. A key to this story was that decision NOT to go back to school. It took courage to choose to forgo additional schooling – and then not to “settle in” to a mediocre career. I’ve had a similar story arc myself. I don’t have a technical degree but work in support roles around those who do. I could have chosen to go back to school and get a technical degree (I have a masters so am on my way) but that achievement didn’t “light me up” so i’ve stayed in the more-or-less “hourly” role. This decision combined with an avocation of developing my soft skills and self-awareness have helped me achieve success within the field without a technical degree. In some ways – more success than if I’d obtained that degree. Thank you for this story – it’s one i’ll be sharing with those close to me (they learn better from outside sources – not from my lecturing 🙂 .
I glad you liked it, it sounds like you are living it! I chose a very conventional path and did much better than average at it but my friends who are worth multiples of my net worth mostly took unconventional roads to their success.